Monday, Nov.
2, 2026 CALL PARTICIPANTS Interim Chief Executive Officer - John DeSimoneChief Financial Officer - Scott SchaeferVice President, Head of Investor Relations - Samantha Holway Net Sales -- $1.4 billion, growing 6% year over year driven by increased sales volume and pricing benefits.Adjusted EBITDA -- $182.4 million, exceeding the previous guidance range provided by management.Adjusted EBITDA Margin -- 13.5%, representing a 70 basis point expansion year over year.Net Income -- $58.8 million, growing 36% compared to the prior year period.Diluted EPS -- $0.55, increasing $0.13 compared to the third quarter of 2025.Adjusted Diluted EPS -- $0.64, including a $0.06 foreign exchange headwind.Worldwide Volume -- increased 8.6% year over year, marking the fifth consecutive quarter of growth.Asia Pacific Constant Currency Sales -- increased 26.1% year over year, led by a 52% local currency sales increase in India.North America Net Sales -- increased 1.7% year over year, representing the second consecutive quarter of growth for the region.Latin America Constant Currency Sales -- increased 5.1% year over year.EMEA Constant Currency Sales -- declined 5.2% year over year.China Constant Currency Sales -- declined 26.4% year over year.Gross Profit Margin -- 77.3%, down 40 basis points year over year due to unfavorable sales mix and manufacturing cost changes.Operating Cash Flow -- $298 million for the first nine months of the year, a 27% increase over the same period in 2025.Net Interest Expense -- $31.9 million, reflecting a $19.1 million reduction year over year following the April refinancing.Net Leverage Ratio -- 2.0x at quarter end, achieving the long-term target objective of 2.0x or below.Share Repurchase Program -- $250 million authorized by the board for execution over a three-year period beginning in the fourth quarter.Reported Net Sales Guidance -- raised to a range of 4.9% to 5.9% growth for the full year 2026.Adjusted EBITDA Guidance -- maintained at a range of $670 million to $690 million on a reported basis for the full year 2026.U.S.
Nutrition Club Volume -- accounted for 42% of U.S.
sales volume, with club productivity increasing over 10% year over year.Bioniq Brand Performance -- reported sales of less than 50,000 units since the initial product launch.Capital Expenditures -- $18.5 million for the quarter, with full-year guidance narrowed to $55 million to $65 million.SaaS Implementation Costs -- $14.5 million in the quarter, with full-year expectations of $35 million to $45 million.Cash and Cash Equivalents -- $409.2 million as of Sept.
Need a quote from a Motley Fool analyst? Email [email protected] Schaefer stated, "Looking ahead, we expect the path to further expansion to be more gradual," noting that the company is monitoring input costs as it plans for 2027.Schaefer warned that fourth quarter guidance reflects a lower margin than the third quarter.
Herbalife Ltd.
(HLF +1.76%) reported its fifth consecutive quarter of net sales growth, supported by a 8.6% increase in global volume and significant outperformance in the Indian market.
Management detailed a strategic roadmap focused on the establishment of a dedicated Nutrition Club vertical and a modular technology platform designed to capture 50% of distributor transactions within three years.
The company attained a net leverage ratio of 2.0x, meeting its long-term leverage objective ahead of schedule while authorizing a new 250 million share repurchase program.
CFO Scott Schaefer reported that the April refinancing resulted in a $19.1 million reduction in interest expense during the quarter.
Interim CEO DeSimone highlighted the GLP-1 opportunity: "I like you think there is a big opportunity for our products to coexist with consumers who take GLP-1 medication."The company is developing a modular technology platform where "distributors can use this platform the way they currently operate the business to drive incremental value," according to DeSimone.Management plans to integrate the Life I/O technology into the Bioniq brand and expand into sports performance and healthy lifespan categories.The company is establishing an internal Nutrition Club organization to support over 64,000 global clubs with tailored products, training, and programs.Herbalife expects to begin introducing new digital capabilities in the first quarter of 2027, starting with the 24 games team-based fitness events.The company reported that India remains its primary growth driver, with local currency sales increasing 52% on nearly 50% volume growth.
INDUSTRY GLOSSARY Adjusted EBITDA: A non-GAAP financial metric that excludes the impact of nonrecurring items such as restructuring costs, technology realignment expenses, and debt extinguishment.Bioniq: A premium health and wellness brand acquired by the company that offers personalized nutrition and sports performance products.Constant Currency: A financial calculation that removes the impact of foreign exchange rate fluctuations to compare underlying business performance across different periods.DMO: Daily Method of Operation; the specific business strategy, such as running a Nutrition Club or wellness challenge, used by a distributor to serve customers.GLP-1: Glucagon-like peptide-1; a class of medications used for weight management and diabetes that management identified as a complementary opportunity for its protein products.GST: Goods and Services Tax; the comprehensive indirect tax system in India that was amended in 2025, impacting year-over-year growth comparisons.Net Leverage Ratio: The ratio of net debt (total debt minus cash) to the trailing 12 months of credit agreement EBITDA.SaaS: Software as a Service; cloud-based software implementation costs that the company reports separately from traditional capital expenditures.
Full Conference Call Transcript Operator: Welcome, and thank you for joining the Third Quarter 2026 Earnings Conference Call for Herbalife Limited.
[Operator Instructions] As a reminder, today's conference call is being recorded.
I would now like to turn the call over to Samantha Holway, Vice President, Head of Investor Relations, to begin today's call.
Samantha Holway: Thank you, and welcome to everyone joining us.
With us today are John DeSimone, our Interim Chief Executive Officer; and Scott Schaefer, our Chief Financial Officer.
Before we begin today's call, I would like to direct you to the cautionary statement regarding forward-looking statements on Page two of our presentation and in our earnings release issued earlier today, which are both available under the Investor Relations section of our website.
The presentation and earnings release include a discussion of some of the more important factors that could cause results to differ from those expressed in any forward-looking statement within the meaning of the Private Securities Litigation Reform Act of 1995.
As is customary, the content of today's call and presentation will be governed by this language.
In addition, during today's call, we will be discussing certain non-GAAP financial measures.
These non-GAAP financial measures exclude certain unusual or nonrecurring items that management believes impact the comparability of the periods referenced.
Please refer to our earnings release and presentation materials for additional information regarding these non-GAAP financial measures and the reconciliations to the most directly comparable GAAP measure.
And with that, I will now turn the call over to our Interim CEO, John DeSimone.
John DeSimone: Thank you, Sam, and thank you, everyone, for joining us today.
Before turning to our results, I want to acknowledge Stephan and thank him for his leadership and contributions to Herbalife.
His success as a distributor and deep understanding of our business brought a unique perspective to the CEO role.
Herbalife has been an important part of my life for many years.
I've had the privilege of working alongside talented people, building relationships with distributors around the world and seeing firsthand the difference Herbalife can make in people's lives.
I have tremendous belief in this company, our people and the entrepreneurial spirit of our distributors, and I have great confidence in our future.
As CEO, I'm excited to lead Herbalife at this important time.
We have much to be proud of, and we have meaningful growth opportunities by strengthening our core business and better supporting our distributors and reaching new entrepreneurs and consumers.
I'm stepping into this role with ownership, energy and a focus on execution and a commitment to results.
I've worked closely with our leadership team and distributors to identify new growth opportunities and sharpen current priorities with a clear path forward.
Today, I'll share some of that thinking along with our third quarter results.
Let me start with the quarter.
We delivered net sales of $1.4 billion, an increase of 6% year-over-year on a reported basis and 7.6% on a constant currency basis, exceeding our guidance.
This marked our fifth consecutive quarter of net sales growth on both a reported and constant currency basis.
Adjusted EBITDA was $182 million, also exceeding guidance, and our adjusted EBITDA margin improved 70 basis points year-over-year to 13.5%.
I'm encouraged by our performance and the progress we're making.
At the same time, we recognize there's more work to do to continue to accelerate growth, improve productivity and build on the momentum we've established.
Scott will provide more details on our financial results and regional performance shortly.
Over the past several years, we've made meaningful investments in our product portfolio, personalized nutrition and technology capabilities.
These investments have strengthened our foundation.
Now we're focused on leveraging that foundation to strengthen our core business and unlock more growth opportunities.
At the center of our strategy is a simple principle.
Herbalife succeeds when our distributors succeed.
Herbalife is a platform that enables entrepreneurs from around the world to deliver wellness and nutrition to millions of people worldwide.
More than 3 million entrepreneurs in over 90 markets use our platform to build their own unique businesses; some run a nutrition club, some lead transformation challenges, some build communities through wellness profiles in person and online, while others use social media and social selling or run fit clubs or fit competitions.
No matter the business model, each brings a personal connection to customers that no company could create on its own.
Our focus is making the platform stronger for each of them, because when they serve more customers, more people live healthier lives and Herbalife grows.
Our opportunity is to develop dedicated expertise around their most significant business models while leaving room for new ones to emerge.
This includes products, training, programs and digital tools tailored to how our distributors operate.
It also means giving distributors flexibility to customize these capabilities and allowing regions to adapt products, programs and digital experiences to their local needs.
Three strategic priorities I'll discuss on today's call illustrates how we're putting this approach into practice.
First, establishing a dedicated nutrition club vertical; second, launching adaptable technology that empowers our distributors to grow their businesses in ways that work for them and their customers.
and third, expanding into new entrepreneur and consumer segments through the Bioniq brand.
Let's start with Nutrition Clubs, a key differentiator for Herbalife.
With over 64,000 Nutrition Clubs globally, our distributors have built their businesses around personal relationships, community and helping consumers engage in their health and wellness journeys.
Of those 64,000 clubs, almost 9,000 are in the U.S.
These clubs accounted for 42% of U.S.
volume in the third quarter, with club productivity increasing over 10% year-over-year in each quarter of 2026.
This increase in volume has been driven by a consistent growth of customers coming through the door, which is up more than 7% this quarter, along with increased visit frequency.
This is just the contribution of Nutrition Clubs in one country.
We see an opportunity to build on this foundation and drive even greater productivity and profitability by establishing an internal Nutrition Club organization focused on helping distributors grow their club businesses.
That means better tools, Nutrition Clubs specific products, tailored programs and training and more coordinated support while preserving flexibility for regions and distributors to adapt successful approaches to their local needs.
Our goal is to help more clubs build on what's working, replicate proven practices and unlock potential across this important business model.
This is the first of what we believe will be more specific internal organizations to support other large methods of operations our distributors utilize.
Our second strategic priority is expanding our customer engagement platform.
Earlier, I described Herbalife as a platform supporting many ways to build a business.
Our technology needs to enable that flexibility.
We already have building blocks in market.
In the U.S., our Engage app allows customers to order directly from local Nutrition Clubs prior to arriving.
In Asia Pacific, our Hub app supports distributors running transformation challenges.
Today, these operate as separate tools with separate data.
We're building a common modular technology foundation designed to support different distributor business models and evolve with their needs.
Many distributors currently rely on a patchwork of outside apps, tools and manual processes.
Our expanded platform will bring essential capabilities together and turn proven practices from our most successful distributors into digital programs that are simple to adopt and use.
With a sheer foundation, we can introduce new programs faster, direct investment towards those demonstrating consumer demand and attractive returns.
We're targeting the first quarter of 2027 to begin introducing these new capabilities starting with the 24 games with additional programs to follow.
The platform will give distributors greater flexibility to create customer experiences that fit their businesses while helping us capture consumer transactions that develop insights to improve customer engagement, retention and growth.
Over time, these insights will help us better understand consumer needs, develop more relevant products and services and build a more predictable and sustainable business.
Our goal is to capture at least 50% of our distributors' global consumer transactions within our technology ecosystem over the next three years.
Alongside our efforts to strengthen existing distributor businesses, Bioniq gives us an opportunity to reach new entrepreneur and consumer segments and expand growth.
When we acquired Bioniq, it was primarily a personalized nutrition business.
We're now expanding it into a premium health and wellness brand spanning personalized nutrition, sports performance and healthy lifespan.
Throughout 2027, we plan to offer more convenient formats and premium offerings, including introducing additional personalized nutrition SKUs.
Bioniq also creates another pathway for entrepreneurs to join our platform, giving them greater flexibility to build their businesses around the products, brand and consumers that they're most passionate about.
We believe Bioniq can bring the energy and appeal of an insurgent brand to our platform, attracting new entrepreneurs and consumers.
By leveraging our existing infrastructure, global reach and scale, Bioniq can become a meaningful contributor to our growth and long-term value.
These initiatives are integral to our strategy, but they are not the entirety of our growth agenda.
We're also expanding support for other distributor business models, broadening the global reach of our skin care offerings and....
