Herbalife Q1 Earnings Call Highlights

Key Points

• Herbalife beat first-quarter guidance with net sales of $1.3 billion, up 7.8% year over year, and adjusted EBITDA of $176 million. The company also generated $114 million in operating cash flow and posted its third straight quarter of year-over-year sales growth.
• India was the main growth engine, with record net sales of $275 million, up about 32% reported and 39% in local currency. Regional results were mixed, as North America and China declined while Asia Pacific and Latin America posted solid gains.
• Herbalife is advancing its personalized nutrition strategy through acquisitions like Bioniq, Link BioSciences, Pruvit and Pro2col. The company also strengthened its balance sheet with a refinancing that should save about $45 million annually in interest and said it expects to reduce net leverage below 2x by year-end 2026.

Herbalife NYSE: HLF reported first-quarter 2026 results above its prior guidance, citing continued momentum in several international markets and progress on its strategy to expand personalized nutrition offerings through technology and recent acquisitions.

Chief Executive Officer Stephan Gratziani said the company delivered “a strong start to 2026,” with net sales and adjusted EBITDA both exceeding guidance. Herbalife reported net sales of $1.3 billion, up 7.8% year over year and up 5.4% on a constant currency basis. Adjusted EBITDA was $176 million, also above guidance, and the company generated $114 million in cash from operations during the quarter.

Gratziani said the results reflected “the underlying stability” of the business and reinforced confidence in the company’s strategy. He also highlighted that the quarter marked Herbalife’s third consecutive period of year-over-year net sales growth on both a reported and constant currency basis.

India Drives Growth as Regional Results Remain Mixed

Chief Financial Officer John DeSimone said first-quarter net sales exceeded the company’s guidance range of 3% to 7% reported growth, while constant currency sales also came in above expectations. He said the performance was led primarily by India, where net sales reached a record $275 million, up approximately 32% year over year on a reported basis and 39% in local currency.

DeSimone said India’s growth was driven by a 37% increase in volume and favorable sales mix. He said demand in the market remained strong after a September 2025 reduction in the goods and services tax rate on the majority of Herbalife products. The company expects the GST tailwind to continue through September, with momentum extending beyond that point at a more moderate pace.

Regional performance varied across the company:

• Asia Pacific: Reported net sales rose 17% year over year, while local currency net sales increased 21%, helped by approximately 22% volume growth.
• Latin America: Reported net sales increased 17%, with local currency sales up 7%. Mexico reported 22% sales growth on a reported basis and 5% in local currency.
• EMEA: Reported net sales rose 1%, aided by foreign exchange, but constant currency sales fell 6% as volume declined 11%.
• North America: Net sales declined 3%, reflecting a 5% volume decline partially offset by pricing.
• China: Reported net sales fell 12%, while local currency sales declined 16%, primarily due to an 18% volume decrease.

DeSimone said North American sales were hurt by severe weather in January and February that temporarily closed distributor-owned Nutrition Clubs and disrupted daily consumption sales. He also cited higher shipments in transit at quarter-end, which deferred revenue into the second quarter. Excluding those factors, he said North American net sales would have been slightly up year over year on both a reported and constant currency basis.

Margins, Cash Flow and Debt Reduction

Herbalife reported first-quarter net income attributable to the company of $62 million and adjusted net income of $69 million. Adjusted diluted earnings per share were $0.64, including a $0.03 foreign exchange headwind from the prior-year quarter.

Gross profit margin was 77.9%, down 40 basis points year over year. DeSimone attributed the decline to input cost inflation, unfavorable sales mix, other cost changes and foreign exchange headwinds, partially offset by pricing benefits and lower inventory write-downs.

The company ended the quarter with $451 million of cash, up nearly $100 million from the end of 2025. Its total leverage ratio was 2.7x as of March 31, down from 3.9x at the end of 2023. DeSimone also introduced net leverage ratio as an additional metric, saying net leverage stood at 2.1x at quarter-end and that the company is targeting a reduction below 2x by the end of 2026.

In April, Herbalife completed a $1.45 billion senior secured refinancing. The transaction included $800 million of 7.75% senior secured notes due May 2033, a $225 million Term Loan A and a $425 million revolving credit facility, with the Term Loan A and revolver maturing in April 2031. DeSimone said the refinancing is expected to generate approximately $45 million in annualized cash interest savings based on current conditions.

Personalized Nutrition Strategy Advances

Gratziani said Herbalife is building a more connected and personalized approach to health and wellness, supported by its distributor network, data, technology and manufacturing capabilities. He said the company’s strategy centers on four actions: what to measure, what to take, what to do and who to do it with.

The company completed the acquisition of substantially all of the assets of Bioniq’s CORE personalized nutrition business at the end of April. Gratziani said Bioniq’s patented product personalization engine uses health background information and biomarker data to develop personalized nutritional supplement formulas. Herbalife distributors are expected to begin offering Bioniq personalized supplements in 11 European countries in late June, followed by the U.S. in July and additional markets later in 2026.

DeSimone said the Bioniq transaction included $55 million of base consideration payable over five years, including $10 million payable after closing, and up to $95 million in contingent payments tied to future product sales performance. Herbalife also obtained a call option to acquire Bioniq LAB, a separate platform focused on small molecules and peptides.

Gratziani said Bioniq complements other recent acquisitions, including Link BioSciences, Pruvit and Pro2col. Link BioSciences is expected to support personalized supplement formulation and manufacturing in powder format, with products expected in the marketplace in the first quarter of next year. Pruvit expands the company’s exposure to ketones, while Pro2col serves as the digital platform connecting consumer inputs, health data and distributor guidance.

During the question-and-answer session, Gratziani said Pro2col remains in beta and that feedback from distributors is shaping future features. DeSimone added that Herbalife has not included direct revenue from Pro2col in its 2026 forecast.

Updated Outlook for 2026

For the second quarter, Herbalife expects reported net sales to increase 1.5% to 5.5% year over year, including an approximately 50 basis point currency tailwind. Constant currency net sales are expected to rise 1% to 5%. The company expects second-quarter adjusted EBITDA of $150 million to $170 million.

For the full year, Herbalife expects reported net sales growth of 1.5% to 5.5% and constant currency sales growth of 1% to 5%. Full-year adjusted EBITDA is expected to be between $675 million and $705 million on both a reported and constant currency basis. The company also reaffirmed capital expenditure guidance of $50 million to $80 million and expects capitalized SaaS implementation costs of $35 million to $55 million.

DeSimone said the full-year outlook includes an estimated $20 million to $25 million headwind to adjusted EBITDA from India GST-related net incremental costs, as well as a preliminary estimate of the impact of higher oil prices. In response to an analyst question, he said Herbalife is not passing higher oil costs through to consumers and is absorbing them for now.

Gratziani closed the call by saying Herbalife has strengthened its business over the past two years by returning to sales growth, reducing debt, completing the refinancing and making four strategic acquisitions. He said the company is focused on delivering what it believes will be “the next generation of personalized nutrition.”

About Herbalife NYSE: HLF

Herbalife Nutrition Ltd. NYSE: HLF operates as a global multi-level marketing company specializing in weight-management, nutritional supplement, sports nutrition and personal care products. Its portfolio includes protein shakes, vitamins, energy and fitness supplements, hydration products and skin and hair care items, all formulated to support wellness, performance and healthy living. Products are manufactured in GMP-certified facilities to ensure consistent quality and safety standards.

Founded in 1980 by Mark R.

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