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    HLF
    Earnings call· Jun 2026(Q2 FY26)

    HERBALIFE Q2 FY26 earnings call HLF

    Aug 5, 2026 Source

    Executive summary

    Herbalife Q2 FY26 — Strong Sales Growth Driven by Personalized Nutrition Strategy

    Herbalife delivered its fourth consecutive quarter of net sales growth, exceeding guidance on a constant currency basis, driven by strong regional performance in Latin America and Asia Pacific. The company is actively advancing its personalized nutrition strategy through new product launches like Bioniq Go and the Pro2col platform, leveraging technology and its extensive distributor network. Despite a GAAP net loss due to debt extinguishment, the company demonstrated strong cash generation and reduced net interest expense, maintaining a disciplined focus on debt reduction and financial strength.

    Highlights

    5

    • Net sales of $1.3 billion, up 5.4% year-over-year, at the top end of guidance.

    • Constant currency net sales increased 5.8% year-over-year, approximately 80 basis points above the high end of guidance.

    • Fourth consecutive quarter of year-over-year net sales growth on both reported and constant currency bases.

    • Operating cash flow for the first half of 2026 was $147 million, up 52% year-over-year.

    • Net interest expense reduced to $37 million, down from $54 million in Q2 2025, due to successful debt refinancing.

    Concerns

    4

    • GAAP net loss attributable to Herbalife was $26 million, primarily due to a nearly $95 million pretax loss on debt extinguishment.

    • Adjusted diluted EPS of $0.51 included a $0.04 FX headwind and was unfavorably impacted by $0.14 due to a higher adjusted effective tax rate of 43.2% (vs. 27.7% in Q2 2025).

    • EMEA reported net sales declined 3.5% and constant currency net sales declined 5.6%, reflecting a 12% volume decrease.

    • China reported net sales declined 25% and constant currency net sales declined 29%, driven by a 29% decrease in volume.

    Guidance & targets

    12
    CategoryTargetConfidence
    Q3 Net Sales
    increase 0.5% to 4.5% year-over-year
    high materiality
    High
    Q3 Net Sales
    increase 1.5% to 5.5% year-over-year
    high materiality
    High
    Q3 Adjusted EBITDA
    $160 million to $180 million
    high materiality
    High
    Q3 Adjusted EBITDA
    $165 million to $185 million
    high materiality
    High
    Q3 Capital Expenditures
    $15 million to $25 million
    medium materiality
    High
    Full Year Net Sales
    increase 2.5% to 5.5% year-over-year
    high materiality
    High
    Full Year Adjusted EBITDA
    $670 million to $690 million
    high materiality
    High
    Full Year Adjusted EBITDA
    $690 million to $710 million
    high materiality
    High
    Full Year Capital Expenditures
    $50 million to $70 million
    medium materiality
    High
    Full Year Capitalized SaaS Implementation Costs
    $35 million to $55 million
    medium materiality
    High
    Net Leverage Ratio
    below 2x
    high materiality
    High
    Debt Repayment
    more than $600 million
    high materiality
    High

    Segment performance

    5
    SegmentRevenueYoYQoQMargin
    North America
    Returned to slight growth, with higher year-over-year pricing partially offset by volume decline.
    Volume growth: -2%
    		—0.2%——
    Latin America
    Delivered fourth consecutive quarter of double-digit year-over-year growth, driven by favorable pricing, sales mix, and FX tailwind. Mexico reported net sales up 17% YoY.
    Volume growth: 2%FX tailwind: 840 bps
    		—17% (reported), 8% (constant currency)——
    Asia Pacific
    Growth driven by strong volume and favorable pricing, partially offset by unfavorable country mix and FX. India reported net sales up 33% YoY and constant currency up 47%, with 45% volume growth.
    Volume growth: 26%
    		—15% (reported), 23% (constant currency)——
    EMEA
    Declined due to volume decrease, which offset higher pricing, favorable sales mix, and FX tailwinds.
    Volume decline: 12%
    		—-3.5% (reported), -5.6% (constant currency)——
    China
    Smallest region, less than 5% of worldwide net sales. Decline driven primarily by volume decrease.
    Volume decrease: 29%
    		—-25% (reported), -29% (constant currency)——

    Operational metrics

    23
    Net Sales
    $1.3 billionup 5.4% YoY
    Q2 FY26

    Reported net sales, at the top end of guidance range.

    Net Sales Growth
    5.8%YoY
    Q2 FY26

    Exceeded guidance by approximately 80 basis points.

    Adjusted EBITDA
    $167 million
    Q2 FY26

    Near the top end of guidance range of $150 million to $170 million.

    Gross Profit Margin
    77.7%down 30 bps YoY
    Q2 FY26

    Reflected various cost and pricing impacts.

    Net Loss Attributable to Herbalife
    $26 million
    Q2 FY26

    GAAP net loss, primarily driven by a $95 million pretax loss on debt extinguishment.

    Adjusted Net Income
    $53 million
    Q2 FY26

    Non-GAAP measure.

    Diluted Loss Per Share
    $0.25
    Q2 FY26

    GAAP measure, due to debt extinguishment.

    Adjusted Diluted EPS
    $0.51
    Q2 FY26

    Included FX headwind and impact from higher adjusted tax rate.

    Adjusted Effective Tax Rate
    43.2%up from 27.7% for Q2 FY25
    Q2 FY26

    Drove an approximately $0.14 unfavorable impact to adjusted diluted EPS.

    Credit Agreement EBITDA
    $191 million
    Q2 FY26

    Used for leverage ratio calculation.

    Total Leverage Ratio
    2.7x
    Q2 FY26

    As of June 30.

    Net Leverage Ratio
    2.2x
    Q2 FY26

    As of June 30.

    Cash Balance
    $370 million
    Q2 FY26

    Cash at quarter end.

    Revolving Credit Facility Outstanding
    $135 million
    Q2 FY26

    Amount outstanding under the facility at quarter end.

    Net Interest Expense
    $37 milliondown from $54 million in Q2 FY25
    Q2 FY26

    Positive impact from April debt refinancing.

    Volume Growth
    5.8%YoY
    Q2 FY26

    Fourth consecutive quarter of year-over-year volume growth.

    Pricing Benefit to Net Sales
    $37 million
    Q2 FY26

    Provided a benefit in the quarter.

    Country Mix Headwind to Net Sales
    $38 million
    Q2 FY26

    An approximately $38 million headwind.

    FX Headwind to Net Sales
    $5 million
    Q2 FY26

    An approximately $5 million or 40 basis point headwind.

    FX Headwind to Adjusted EBITDA
    $8 million
    Q2 FY26

    An approximately $8 million headwind and 53 basis point headwind to adjusted EBITDA margin.

    Capital Expenditures
    $11 million
    Q2 FY26

    Below guidance range of $15 million to $25 million, primarily due to timing.

    Capitalized SaaS Implementation Costs
    $8 million
    Q2 FY26

    Costs incurred in the quarter.

    Free Cash Flow Yield
    23%
    TTM

    Calculated on a trailing 12-month basis, indicating underlying value.

    Industry KPIs

    5
    MetricValueDetails
    Channel mix—
    Portfolio rotation—
    Underlying sales growth5.8%%
    Brand marketing investment—
    Developed vs emerging market split—

    Product announcements

    5
    ProductTypeDetails
    Bioniq Golaunch
    Pro2colmilestone
    Life I/O (Helio)launch
    Life I/O (Activate Energy)launch
    Blood Testing and Platform Integration (Pro2col)milestone

    Deals & partnerships

    2
    BioniqAcquisition of personalized nutrition company

    Acquisition completed in April, leading to the launch of Bioniq Go. The agreement includes a call option for Bioniq Lab, a peptide distribution business, allowing flexibility to evaluate that category over time.

    PruvitAcquisition of exogenous ketone product company

    Acquisition completed last year, leading to the launch of Activate Energy as part of the Life I/O brand.

    Risks & headwinds

    5
    Foreign Exchange (FX) RatesQ2 FY26

    40 basis point year-over-year headwind to net sales; $8 million headwind to adjusted EBITDA and 53 basis point headwind to adjusted EBITDA margin.

    Higher Adjusted Effective Tax RateQ2 FY26

    43.2% in Q2 FY26, up from 27.7% in Q2 FY25, resulting in an approximately $0.14 unfavorable impact to adjusted diluted EPS.

    Country Mix Impact on Net SalesQ2 FY26

    Approximately $38 million headwind to net sales.

    Gross Profit Margin DeclineQ2 FY26

    Down 30 basis points year-over-year.

    Mitigation: Partially offset by 60 basis points of pricing benefits.

    Input Cost InflationNear-term

    Pressure from whey, packaging, and freight (due to oil prices).

    Mitigation: Expected to recover costs with normal price increase structure next year; manageable impact compared to other companies.

    What to watch in Q3 FY26

    5

    Life I/O Products Sales Performance

    next quarter
    CurrentJust launched in July
    TargetQuantified sales figures and distributor adoption trends

    Why it matters

    To assess the initial market reception and contribution of new products like Helio and Activate Energy to North America growth and broader consumer reach.

    I think it's really better to hold this question until next quarter and not ask about the Q2 results. It really is -- look, I think you were at the event, lots of excitement. But before we start giving figures out, I think we should get through Q3 and do it on the next call.

    Q&A highlights

    7

    How does Herbalife ensure strong distributor retention during rapid growth phases, especially in Asia Pacific and India?

    Management attributed the growth to strong business models and customer support systems implemented by distributors. They noted India's consistent 18 years of growth, which indicates underlying discipline, and expressed confidence in the systems to support continued growth.

    “India has had 18 straight years of growth. And so they were able to accomplish that because they've been able to build in the discipline underneath that growth. So that also gives us confidence.”

    asked by Nicholas Sherwood · answered by John DeSimone

    2 min read6 chapters

    Detailed Narrative

    01

    Advancing Personalized Nutrition Strategy

    Herbalife is strategically investing in capabilities to drive its next phase of growth, focusing on personalized nutrition, a $34 billion global market. The company aims to combine technology, science, and human connection, leveraging AI-assisted technology, biomarker insights, and individualized formulations to amplify the customer and distributor experience. This approach builds on Herbalife's 45+ years of experience in personalization.

    02

    New Product Launches: Bioniq Go and Life I/O Expansion

    The company launched Bioniq Go, its first product from the Bioniq acquisition, in 11 European markets in June and the U.S. in July. This personalized daily supplement offers 1 of 40 formulas based on individual profiles. Additionally, the Life I/O brand, targeting the healthy lifespan market, expanded in North America with the launch of Helio, a comprehensive supershake, and Activate Energy, an exogenous ketone product from the Pruvit acquisition, broadening the product portfolio and consumer reach.

    03

    Pro2col Personalized Health Operating System Development

    Pro2col, Herbalife's AI-assisted personalized health operating system, is currently in expanded beta. This platform is designed to integrate all elements of personalized nutrition, including what to measure, what to take, what to do, and who to do it with. New modules and capabilities, such as smart device integrations and evolved biomarker support, are expected to be introduced through next year, with a beta program for blood testing and platform integration also underway.

    04

    Strong Regional Performance and Volume Growth

    Herbalife reported its fourth consecutive quarter of year-over-year net sales growth. India delivered a particularly strong quarter with reported net sales up 33% and constant currency net sales up 47%, driven by a 45% increase in volume. Latin America achieved its fourth consecutive quarter of double-digit growth, with reported net sales up 17%. North America also returned to slight growth, increasing 0.2% year-over-year.

    05

    Financial Strength and Capital Allocation Priorities

    The company demonstrated strong financial health, with operating cash flow for the first half of 2026 reaching $147 million, a 52% increase year-over-year. A successful debt refinancing in April significantly reduced net interest expense to $37 million. Herbalife's primary capital allocation priority remains debt reduction, targeting a net leverage ratio below 2x by year-end and committing to repay over $600 million by the end of 2028.

    06

    CFO Transition and Leadership Continuity

    CFO John DeSimone announced his retirement at the end of the year, with Scott Schaefer, Senior Vice President of Finance and Transformation, appointed as his successor. A seamless transition is planned over the next five months, with management emphasizing continuity in financial leadership and strategic direction, particularly regarding capital allocation priorities.

    AI-generated summary of the company’s earnings call. Not investment advice.