HERBALIFE LTD.
For the period ended Jun 30, 2025. Filed Aug 6, 2025.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Jun 30, 2025 · Filed Aug 6, 2025
HLF$15.28+2.6%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2025-03-31; filed 2025-04-30.
0000950170-25-061076
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2025-06-30; filed 2025-08-06.
0000950170-25-104051
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 177 previous paragraphs and 185 current paragraphs.
121 unchanged; 52 reworded; 10 added; 4 removed; 0 previous and 2 current paragraphs rearranged.
Tables are not compared: 4 previous and 4 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (10)
Current report
Our “other expense (income), net” consists of non-operating income and expenses such as gains or losses on extinguishment of debt.
Current report
Net sales were $1,259.1 million and $2,480.8 million for the three and six months ended June 30, 2025, respectively. Net sales decreased $22.0 million, or 1.7%, and $64.6 million, or 2.5%, for the three and six months ended June 30, 2025, respectively, as compared to the same periods in 2024. In local currency, net sales was flat and increased 0.7% for the three and six months ended June 30, 2025, respectively, as compared to the same periods in 2024. The 1.7% decrease in net sales for the three months ended June 30, 2025 was primarily driven by a 3.1% decrease in sales volume and a 1.7% unfavorable impact of fluctuations in foreign currency exchange rates, partially offset by a 3.0% favorable impact of price increases. The 2.5% decrease in net sales for the six months ended June 30, 2025 was primarily driven by a 3.2% unfavorable impact of fluctuations in foreign currency exchange rates and a 2.7% decrease in sales volume, partially offset by a 3.3% favorable impact of price increases.
Current report
Net income attributable to Herbalife for the six months ended June 30, 2025 included $12.9 million favorable deferred income tax impacts relating to the changes in the Company’s corporate entity structure in 2024, a $4.0 million pre-tax unfavorable impact ($2.9 million post-tax) of Restructuring Program expenses, primarily relating to employee retention and separation costs, a $3.6 million pre-tax unfavorable impact ($2.6 million post-tax) of Technology Realignment Program expenses, primarily relating to employee retention and separation costs, and a $2.8 million pre-tax unfavorable impact ($2.3 million post-tax) of expenses relating to our new Digital Technology Program focused on enhancing and rebuilding our Member facing technology platform and web-based Member tools.
Current report
Net income attributable to Herbalife for the six months ended June 30, 2024 included a $65.5 million pre-tax unfavorable impact ($45.3 million post-tax) of Restructuring Program expenses, primarily relating to employee retention and separation costs; $17.0 million pre-tax unfavorable impact ($15.0 million post-tax) of expenses relating to our new Digital Technology Program focused on enhancing and rebuilding our Member facing technology platform and web-based Member tools; a $10.5 million pre-tax unfavorable impact ($7.9 million post-tax) of loss on extinguishment of debt related to the April 2024 debt refinancing transactions, and a $9.4 million pre-tax unfavorable impact ($6.9 million post-tax) of Transformation Program expenses, primarily relating to employee retention and separation costs.
Current report
The Primary Reporting Segment reported net sales of $1,179.1 million and $2,336.0 million for the three and six months ended June 30, 2025, respectively, representing a decrease of $20.3 million, or 1.7%, and $52.5 million, or 2.2%, respectively, as compared to the same periods in 2024. In local currency, net sales increased 0.1% and 1.2% for the three and six months ended June 30, 2025, respectively, as compared to the same periods in 2024. The 1.7% decrease in net sales for the three months ended June 30, 2025 was primarily due to a 2.9% decrease in sales volume and a 1.8% unfavorable impact of fluctuations in foreign currency exchange rates, partially offset by a 3.2% favorable impact of price increases. The 2.2% decrease in net sales for the six months ended June 30, 2025 was primarily due to a 3.4% unfavorable impact of fluctuations in foreign currency exchange rates and a 2.4% decrease in sales volume, partially offset by a 3.5% favorable impact of price increases.
Current report
In July 2025, at the North America Extravaganza, we unveiled the beta version of the new Pro2col health and wellness digital platform, that will allow customers in the future to have access to more product offerings in addition to being able to access this health and wellness digital application. The commercial release of the Pro2col technology platform in the U.S. and Puerto Rico is planned for the fourth quarter of 2025, with additional markets to follow beginning in 2026.
Current report
The $4.8 million of other operating income for both the three and six months ended June 30, 2025 consisted of $4.8 million of government grant income for China (See Note 2, Significant Accounting Policies, to the Condensed Consolidated Financial Statements included in Part I, Item 1, Financial Statements, of this Quarterly Report on Form 10-Q).
Current report
Other Expense, Net
Current report
The $10.5 million of other expense, net for both the three and six months ended June 30, 2024 consisted of a loss on the extinguishment of the 2018 Credit Facility and the partial redemption of the 2025 Notes (See Note 4, Long-Term Debt, to the Condensed Consolidated Financial Statements included in Part I, Item 1, Financial Statements, of this Quarterly Report on Form 10-Q for further discussion).
Current report
During 2025, separate from the capital expenditures described above, we entered into certain asset acquisitions for certain assets of Pruvit, Pro2col LLC, and of Link BioSciences Inc. for an aggregate consideration of approximately $25.5 million, which is reflected separately in investing activities within our condensed consolidated statement of cash flows. See Note 2, Significant Accounting Policies, to the Condensed Consolidated Financial Statements included in Part I, Item 1, Financial Statements, of this Quarterly Report on Form 10-Q, for further information relating to our 2025 acquisitions.
Removed paragraphs (4)
Previous report
Net sales were $1,221.7 million for the three months ended March 31, 2025. Net sales decreased $42.6 million, or 3.4%, for the three months ended March 31, 2025, as compared to the same period in 2024. In local currency, net sales increased 1.4% for the three months ended March 31, 2025, as compared to the same period in 2024. The 3.4% decrease in net sales for the three months ended March 31, 2025 was primarily driven by a 4.8% unfavorable impact of fluctuations in foreign currency exchange rates and a 2.3% decrease in sales volume, partially offset by a 3.7% favorable impact of price increases.
Previous report
The Primary Reporting Segment reported net sales of $1,156.9 million for the three months ended March 31, 2025, representing a decrease of $32.2 million, or 2.7%, as compared to the same period in 2024. In local currency, net sales increased 2.3% for the three months ended March 31, 2025, as compared to the same period in 2024. The 2.7% decrease in net sales for the three months ended March 31, 2025 was primarily due to a 5.0% unfavorable impact of fluctuations in foreign currency exchange rates and a 1.9% decrease in sales volume, partially offset by a 3.9% favorable impact of price increases.
Previous report
Subsequent Events
Previous report
See Note 15, Subsequent Events, to the Condensed Consolidated Financial Statements included in Part I, Item 1, Financial Statements, of this Quarterly Report on Form 10-Q, for information relating to certain asset acquisition during April 2025.
Reworded paragraphs (52)
Previous wording
While we continue to monitor the current global financial environment, including the impacts of the inflation, foreign exchange rate fluctuations, and the wars in Ukraine and the Middle East, we remain focused on the opportunities and challenges in retailing our products and enhancing the customer experience, sponsoring and retaining Members, improving Member productivity, further penetrating existing markets, globalizing successful Daily Methods of Operation, or DMOs, such as Nutrition Clubs, Fit Clubs, and Weight Loss Challenges, introducing new products and globalizing existing products, developing niche market segments and further investing in our infrastructure.
Current wording
While we continue to monitor the current global financial environment, including the impacts of the inflation, foreign exchange rate fluctuations, the wars in Ukraine and the Middle East, rising trade tensions, including U.S. tariffs and retaliatory tariffs from foreign countries and other factors, we remain focused on the opportunities and challenges in retailing our products and enhancing the customer experience, sponsoring and retaining Members, improving Member productivity, further penetrating existing markets, globalizing successful Daily Methods of Operation, or DMOs, such as Nutrition Clubs, Fit Clubs, and Weight Loss Challenges, introducing new products and globalizing existing products, developing niche market segments and further investing in our infrastructure.
Previous wording
Global inflationary pressures and other macroeconomic factors such as foreign exchange rate fluctuations and geopolitical conflicts can impact our financial condition, results of operations and liquidity. For example, inflationary pressure impacts both our cost structures and our pricing. During the three months ended March 31, 2025, we instituted price increases in certain markets to address region or market-specific conditions. We also instituted localized pricing actions in 2024. These actions are discussed further in the Sales by Geographic Region discussion further below. We continue to examine our cost structure and assess additional potential incremental pricing actions in response to ongoing inflationary pressures and any tariffs and retaliatory tariffs imposed by the U.S. or foreign governments which could have a significant adverse impact to our business, which includes our Mexico market where our U.S. manufacturing operations provides a significant amount of finished goods inventory to our Mexico operations.
Current wording
Global inflationary pressures and other macroeconomic factors such as foreign exchange rate fluctuations and geopolitical conflicts can impact our financial condition, results of operations and liquidity. For example, inflationary pressure impacts both our cost structures and our pricing. During the six months ended June 30, 2025, we instituted pricing actions in certain markets to address region or market-specific conditions. We also instituted localized pricing actions in 2024. These actions are discussed further in the Sales by Geographic Region discussion further below. We continue to examine our cost structure and assess additional potential incremental pricing actions in response to ongoing inflationary pressures and any tariffs and retaliatory tariffs imposed by the U.S. or foreign governments which could have a significant adverse impact to our business, which includes our Mexico market where our U.S. manufacturing operations provide a significant amount of finished goods inventory to our Mexico operations.
Previous wording
Our “contribution margins” consist of net sales less cost of sales, Royalty overrides, and service fees to our independent service providers in China, for the purposes of segment reporting specifically, as discussed further below and described in our Note 6, Segment Information, to the Condensed Consolidated Financial Statements included in Part I, Item 1, Financial Statements, of this Quarterly Report on Form 10-Q.
Current wording
Our “contribution margins” consist of net sales less cost of sales, Royalty overrides, and service fees to our independent service providers in China, for the purposes of segment reporting specifically.
Previous wording
Net income was $50.4 million, or $0.49 per diluted share, for the three months ended March 31, 2025. Net income increased $26.1 million, or 107.4%, for the three months ended March 31, 2025 as compared to the same period in 2024. The increase in net income for the three months ended March 31, 2025 was mainly due to $60.3 million lower selling, general, and administrative expenses driven by lower labor and benefits costs (see Selling, General, and Administrative Expenses below for further discussion), and $13.4 million lower royalty overrides driven by lower net sales, partially offset by $22.8 million lower gross profit driven by lower net sales, $14.1 million higher interest expense, net, and $10.7 million higher income taxes.
Current wording
Net income attributable to Herbalife was $49.3 million, or $0.48 per diluted share, and $99.7 million, or $0.97 per diluted share, for the three and six months ended June 30, 2025, respectively. Net income attributable to Herbalife increased $44.6 million, or 948.9%, and $70.7 million, or 243.8%, for the three and six months ended June 30, 2025, respectively, as compared to the same periods in 2024. The increase in net income attributable to Herbalife for the three months ended June 30, 2025 was mainly due to $54.4 million lower selling, general, and administrative expenses driven by lower labor and benefits costs (see Selling, General, and Administrative Expenses below for further discussion), $10.5 million loss on extinguishment of debt in 2024 related to the April 2024 debt refinancing transactions (see Liquidity and Capital Resources below for further discussion), and $8.8 million lower royalty overrides driven by lower net sales, partially offset by $15.8 million lower gross profit driven by lower net sales, and $22.3 million higher income taxes. The increase in net income attributable to Herbalife for the six months ended June 30, 2025 was mainly due to $114.7 million lower selling, general, and administrative expenses driven by lower labor and benefits costs (see Selling, General, and Administrative Expenses below for further discussion), $22.2 million lower royalty overrides driven by lower net sales, and $10.5 million loss on extinguishment of debt in 2024 related to the April 2024 debt refinancing transactions (see Liquidity and Capital Resources below for further discussion), partially offset by $38.6 million lower gross profit driven by lower net sales, $10.0 million higher interest expense, net, and $33.0 million higher income taxes.
Previous wording
Net income for the three months ended March 31, 2025 included $5.1 million favorable deferred income tax impacts relating to the changes in the Company's corporate entity structure in 2024, a $3.3 million pre-tax unfavorable impact ($2.4 million post-tax) of Restructuring Program expenses, primarily relating to employee retention and separation costs, and a $2.4 million pre-tax unfavorable impact ($2.0 million post-tax) of expenses relating to our new Digital Technology Program focused on enhancing and rebuilding our Member facing technology platform and web-based Member tools.
Current wording
Net income attributable to Herbalife for the three months ended June 30, 2025 included $7.8 million favorable deferred income tax impacts relating to the changes in the Company’s corporate entity structure in 2024, a $3.6 million pre-tax unfavorable impact ($2.6 million post-tax) of Technology Realignment Program expenses, primarily relating to employee retention and separation costs, a $0.7 million pre-tax unfavorable impact ($0.5 million post-tax) of Restructuring Program expenses, primarily relating to employee retention and separation costs, and a $0.4 million pre-tax unfavorable impact ($0.3 million post-tax) of expenses relating to our new Digital Technology Program focused on enhancing and rebuilding our Member facing technology platform and web-based Member tools.
Previous wording
Net income for the three months ended March 31, 2024 included a $16.7 million pre-tax unfavorable impact ($12.2 million post-tax) of Restructuring Program expenses, primarily relating to employee retention and separation costs; $11.0 million pre-tax unfavorable impact ($8.9 million post-tax) of expenses relating to our new Digital Technology Program focused on enhancing and rebuilding our Member facing technology platform and web-based Member tools, and a $5.9 million pre-tax unfavorable impact ($3.9 million post-tax) of Transformation Program expenses, primarily relating to employee retention and separation costs.
Current wording
Net income attributable to Herbalife for the three months ended June 30, 2024 included a $48.8 million pre-tax unfavorable impact ($33.1 million post-tax) of Restructuring Program expenses, primarily relating to employee retention and separation costs; a $10.5 million pre-tax unfavorable impact ($7.9 million post-tax) of loss on extinguishment of debt related to the April 2024 debt refinancing transactions; $6.0 million pre-tax unfavorable impact ($6.1 million post-tax) of expenses relating to our new Digital Technology Program focused on enhancing and rebuilding our Member facing technology platform and web-based Member tools, and a $3.5 million pre-tax unfavorable impact ($3.0 million post-tax) of Transformation Program expenses, primarily relating to employee retention and separation costs.
Previous wording
For a discussion of China’s net sales for the three months ended March 31, 2025 as compared to the same period in 2024, see the China section of Sales by Geographic Region below.
Current wording
For a discussion of China’s net sales for the three and six months ended June 30, 2025, see the China section of Sales by Geographic Region below.
Previous wording
As discussed above under “Presentation,” contribution margin consists of net sales less cost of sales, Royalty overrides, and service fees to our independent service providers in China. Also, as discussed in Note 6, Segment Information, to the Condensed Consolidated Financial Statements included in Part I, Item 1, Financial Statements, of this Quarterly Report on Form 10-Q, in the second quarter of 2024, the Company changed its presentation of this segment reporting measure for its China segment. Historical information discussed below has been adjusted to conform with the current period contribution margin. This change had no impact on the Company's accompanying condensed consolidated statements of income and only impacts the China contribution margin amounts discussed below and the operating information table in Note 6, Segment Information, to the Condensed Consolidated Financial Statements included in Part I, Item 1, Financial Statements, of this Quarterly Report on Form 10-Q.
Current wording
As discussed above under “Presentation,” contribution margin consists of net sales less cost of sales, Royalty overrides, and service fees to our independent service providers in China.
Previous wording
The Primary Reporting Segment reported contribution margin of $499.8 million, or 43.2% of net sales, for the three months ended March 31, 2025, representing a decrease of $1.4 million, or 0.3% as compared to the same period in 2024. The 0.3% decrease in contribution margin for the three months ended March 31, 2025 was primarily the result of a 5.3% unfavorable impact of foreign currency fluctuations, a 1.4% unfavorable impact of sales volume decreases, and a 1.1% unfavorable impact of higher inventory write-downs, partially offset by a 6.4% favorable impact of price increases and a 0.9% favorable impact of cost changes related to self-manufacturing and sourcing primarily related to decreased raw material costs.
Current wording
The Primary Reporting Segment reported contribution margin of $507.7 million, or 43.1% of net sales, and $1,007.5 million, or 43.1% of net sales for the three and six months ended June 30, 2025, respectively, representing a decrease of $6.0 million, or 1.2%, and $7.4 million, or 0.7%, respectively, as compared to the same periods in 2024. The 1.2% decrease in contribution margin for the three months ended June 30, 2025 was primarily the result of a 3.4% unfavorable impact of foreign currency fluctuations, and a 2.9% unfavorable impact of sales volume decreases, partially offset by a 5.2% favorable impact of price increases. The 0.7% decrease in contribution margin for the six months ended June 30, 2025 was primarily the result of a 4.3% unfavorable impact of foreign currency fluctuations and a 2.4% unfavorable impact of sales volume decreases, partially offset by a 5.8% favorable impact of price increases.
Previous wording
China reported contribution margin of $23.3 million for the three months ended March 31, 2025, representing a decrease of $2.8 million, or 10.7%, for the three months ended March 31, 2025, as compared to the same period in 2024. The 10.7% decrease in contribution margin for the three months ended March 31, 2025 was primarily the result of a 13.8% unfavorable impact of sales volume decreases, a 1.9% unfavorable impact of foreign currency fluctuations, and a 1.4% unfavorable impact of higher inventory write-downs, partially offset by a 4.9% favorable impact of cost changes related to self-manufacturing and sourcing primarily related to decreased raw material costs.
Current wording
China reported contribution margin of $28.6 million and $51.9 million for the three and six months ended June 30, 2025, respectively, representing an increase of $0.7 million, or 2.5%, and a decrease of $2.1 million, or 3.9%, for the three and six months ended June 30, 2025, respectively, as compared to the same periods in 2024. The 2.5% increase in contribution margin for the three months ended June 30, 2025 was primarily the result of a 6.4% favorable impact of sales mix and a 0.8% favorable impact of foreign currency fluctuations, partially offset by a 5.9% unfavorable impact of sales volume decreases. The 3.9% decrease in contribution margin for the six months ended June 30, 2025 was primarily the result of a 9.9% unfavorable impact of sales volume decreases, partially offset by a 2.8% favorable impact of sales mix and a 2.5% favorable impact of cost changes related to self-manufacturing and sourcing.
Previous wording
The factors described above help Members increase their business, which in turn helps drive sales volume growth in our business, and thus, net sales growth. The discussion below of net sales details some of the specific drivers of changes in our business and causes of sales fluctuations during the three months ended March 31, 2025, as compared to the same period in 2024, as well as the unique growth or contraction factors specific to certain geographic regions or significant markets within a region during these periods. Net sales fluctuations, both Company-wide and within a particular geographic region or market, are primarily the result of changes in volume, changes in prices, or changes in foreign currency translation rates. The discussion of changes in net sales quantifies the impact of those drivers that are quantifiable such as changes in foreign currency translation rates, and cites the estimated impact of any significant price changes. The remaining drivers, which management believes are the primary drivers of changes in volume, are typically qualitative factors whose impact cannot be quantified.
Current wording
The factors described above help Members increase their business, which in turn helps drive sales volume growth in our business, and thus, net sales growth. The discussion below of net sales details some of the specific drivers of changes in our business and causes of sales fluctuations during the three and six months ended June 30, 2025, as compared to the same periods in 2024, as well as the unique growth or contraction factors specific to certain geographic regions or significant markets within a region during these periods. Net sales fluctuations, both Company-wide and within a particular geographic region or market, are primarily the result of changes in volume, changes in prices, or changes in foreign currency translation rates. The discussion of changes in net sales quantifies the impact of those drivers that are quantifiable such as changes in foreign currency translation rates, and cites the estimated impact of any significant price changes. The remaining drivers, which management believes are the primary drivers of changes in volume, are typically qualitative factors whose impact cannot be quantified.
Previous wording
The North America region reported net sales of $254.4 million for the three months ended March 31, 2025. Net sales decreased $11.4 million, or 4.3%, for the three months ended March 31, 2025 as compared to the same period in 2024. In local currency, net sales decreased 4.2% for the three months ended March 31, 2025 as compared to the same period in 2024. The 4.3% decrease in net sales for the three months ended March 31, 2025 was primarily due to an 8.0% decrease in sales volume, partially offset by a 4.2% favorable impact of price increases. North America’s sales volume decreased for the three months ended March 31, 2025 as compared to the same period in 2024, and the decrease was less than the prior year period decrease.
Current wording
The North America region reported net sales of $272.4 million and $526.8 million for the three and six months ended June 30, 2025, respectively. Net sales decreased $10.8 million, or 3.8%, and $22.2 million, or 4.0%, for the three and six months ended June 30, 2025, respectively, as compared to the same periods in 2024. In local currency, net sales decreased 3.8% and 3.9% for the three and six months ended June 30, 2025, respectively, as compared to the same periods in 2024. The 3.8% decrease in net sales for the three months ended June 30, 2025 was primarily due to a 5.7% decrease in sales volume, partially offset by a 2.1% favorable impact of price increases. The 4.0% decrease in net sales for the six months ended June 30, 2025 was primarily due to a 6.7% decrease in sales volume, partially offset by a 3.1% favorable impact of price increases. North America’s sales volume decreased for the three and six months ended June 30, 2025 as compared to the same periods in 2024, and the decreases were less than the prior year period decreases.
Previous wording
Net sales in the U.S. were $247.7 million for the three months ended March 31, 2025. Net sales decreased $11.0 million, or 4.3%, for the three months ended March 31, 2025 as compared to the same period in 2024.
Current wording
Net sales in the U.S. were $265.3 million and $513.0 million for the three and six months ended June 30, 2025, respectively. Net sales decreased $10.0 million, or 3.6%, and $21.0 million, or 3.9%, for the three and six months ended June 30, 2025, respectively, as compared to the same periods in 2024.
Previous wording
The Latin America region reported net sales of $206.7 million for the three months ended March 31, 2025. Net sales decreased $7.5 million, or 3.5%, for the three months ended March 31, 2025 as compared to the same period in 2024. In local currency, net sales increased 10.6% for the three months ended March 31, 2025, as compared to the same period in 2024. The 3.5% decrease in net sales for the three months ended March 31, 2025 was due to a 14.1% unfavorable impact of fluctuations in foreign currency exchange rates, partially offset by a 4.3% increase in sales volume, a 4.2% favorable impact of net price increases, and a 2.2% favorable impact of sales mix. Latin America’s sales volume favorably increased for the three months ended March 31, 2025 as compared to the same period in 2024, after having a decrease for the three months ended March 31, 2024.
Current wording
The Latin America region reported net sales of $210.2 million and $416.9 million for the three and six months ended June 30, 2025, respectively. Net sales decreased $1.5 million, or 0.7%, and $9.0 million, or 2.1%, for the three and six months ended June 30, 2025, respectively, as compared to the same periods in 2024. In local currency, net sales increased 9.5% and 10.1% for the three and six months ended June 30, 2025, respectively, as compared to the same periods in 2024. The 0.7% decrease in net sales for the three months ended June 30, 2025 was due to a 10.2% unfavorable impact of fluctuations in foreign currency exchange rates, partially offset by a 4.8% favorable impact of net price increases, a 3.3% increase in sales volume, and 1.4% favorable impact of sales mix. The 2.1% decrease in net sales for the six months ended June 30, 2025 was due to a 12.2% unfavorable impact of fluctuations in foreign currency exchange rates, partially offset by a 4.5% favorable impact of net price increases, a 3.8% increase in sales volume, and 1.8% favorable impact of sales mix. Latin America’s sales volume increased for the three and six months ended June 30, 2025 as compared to the same periods in 2024, after having decreases for the same periods in 2024.
Previous wording
Net sales in Mexico were $126.5 million for the three months ended March 31, 2025. Net sales decreased $14.4 million, or 10.2%, for the three months ended March 31, 2025 as compared to the same period in 2024. In local currency, net sales increased 8.1% for the three months ended March 31, 2025 as compared to the same period in 2024. The fluctuation of foreign currency exchange rates had an unfavorable impact of $25.7 million on net sales for the three months ended March 31, 2025. Mexico’s sales volume was flat for the three months ended March 31, 2025 as compared to the same period in 2024. Macroeconomic conditions, such as a slowdown in the economy and prolonged high interest rates, have created challenges for Members’ and Members’ Nutrition Club operations, which continue to be an important DMO in the market. The market saw a 4.2% price increase during February 2025. During March 2024, the Mexico market implemented a 5.25% price increase.
Current wording
Net sales in Mexico were $137.2 million and $263.7 million for the three and six months ended June 30, 2025, respectively. Net sales decreased $5.5 million, or 3.9%, and $19.9 million, or 7.0%, for the three and six months ended June 30, 2025, respectively, as compared to the same periods in 2024. In local currency, net sales increased 8.9% and 8.5% for the three and six months ended June 30, 2025, respectively, as compared to the same periods in 2024. The fluctuation of foreign currency exchange rates had an unfavorable impact of $18.2 million and $43.9 million on net sales for the three and six months ended June 30, 2025, respectively. Mexico’s sales volume increased 3.5% and 2.2% for the three and six months ended June 30, 2025, respectively, as compared to the same periods in 2024. We believe, recent localized initiatives and other promotional efforts have provided additional support for members while macroeconomic conditions, such as a slowdown in the economy and prolonged high interest rates, have created challenges for Members’ and Members’ Nutrition Club operations, which continue to be an important DMO in the market. The market saw a 4.2% price increase during February 2025. During March 2024, the Mexico market implemented a 5.25% price increase.
Previous wording
The net sales increase was greatest for our Peru and Guatemala markets for the three months ended March 31, 2025, compared to the same period in 2024. The majority of markets in the region instituted price increases to address market-specific conditions during the first quarter of 2025 and 2024. During the second quarter of 2024, most markets within the Latin America region, excluding Mexico, implemented a 5% price reduction and Marketing Plan changes to enhance the competitiveness of our product pricing and aiming to stimulate incremental growth in volume. We believe these changes, coupled with other promotional efforts, may have been a contributing factor for the increases in sales volume for certain markets in the region during the first quarter of 2025.
Current wording
Across other markets, net sales increased and were greatest for Peru, Bolivia and Ecuador for the three months ended June 30, 2025, compared to the same period in 2024, and Peru and Guatemala markets for the six months ended June 30, 2025, compared to the same period in 2024. The majority of markets in the region instituted price increases to address market-specific conditions during the first half of 2025 and 2024. During the second quarter of 2024, most markets within the Latin America region, excluding Mexico, implemented a 5% price reduction and Marketing Plan changes to enhance the competitiveness of our product pricing and aiming to stimulate incremental growth in volume. We believe these changes, coupled with other promotional efforts, may have been a contributing factor for the increases in sales volume for certain markets in the region during the six months ended June 30, 2025.
Previous wording
The region has seen difficult economic conditions as well as market-specific factors including political and social instability. Inflationary pressures, improving but remained elevated, and foreign exchange rate fluctuations in certain markets in the region have challenged our Members’ operations and customer demand. Promotional efforts within the region include increasing in-person activities, adding programs, supporting on a market-by-market basis the Nutrition Club DMO, utilizing segmented promotions and sales incentives, and launching new products.
Current wording
Certain markets in the region continue to see difficult economic conditions, including political and social instability. Inflationary pressures, improving but remained elevated, and foreign exchange rate fluctuations in certain markets in the region have challenged our Members’ operations and customer demand. Promotional efforts within the region include increasing in-person activities, adding programs, supporting on a market-by-market basis the Nutrition Club DMO, utilizing segmented promotions and sales incentives, and launching new products.
Previous wording
The EMEA region reported net sales of $273.3 million for the three months ended March 31, 2025. Net sales decreased $4.6 million, or 1.7%, for the three months ended March 31, 2025, as compared to the same period in 2024. In local currency, net sales increased 3.3% for the three months ended March 31, 2025, as compared to the same period in 2024. The 1.7% decrease in net sales for the three months ended March 31, 2025 was primarily due to a 5.0% unfavorable impact of fluctuations in foreign currency exchange rates and a 4.7% decrease in sales volume, partially offset by a 5.1% favorable impact of price increases, and a 2.9% favorable impact of sales mix. EMEA’s sales volume decreased for the three months ended March 31, 2025 as compared to the same period in 2024, and the decrease was slightly lower than the prior year period decrease. The EMEA region has no single market that accounts for a significant portion of our consolidated net sales.
Current wording
The EMEA region reported net sales of $287.9 million and $561.2 million for the three and six months ended June 30, 2025, respectively. Net sales were flat and decreased $4.5 million, or 0.8%, for the three and six months ended June 30, 2025, respectively, as compared to the same periods in 2024. In local currency, net sales decreased 1.0% and increased 1.1% for the three and six months ended June 30, 2025, respectively, as compared to the same periods in 2024. Net sales for the three months ended June 30, 2025 had a 5.4% decrease in sales volume, offset by a 3.9% favorable impact of price increases, a 1.0% favorable impact of fluctuations in foreign currency exchange rates, and a 0.5% favorable impact of sales mix. The 0.8% decrease in net sales for the six months ended June 30, 2025 was primarily due to a 5.0% decrease in sales volume and a 1.9% unfavorable impact of fluctuations in foreign currency exchange rates, partially offset by a 4.5% favorable impact of price increases and a 1.6% favorable impact of sales mix. EMEA region’s sales volume decreased for the three and six months ended June 30, 2025 as compared to the same periods in 2024, and the decreases were less than the prior year period decreases. The EMEA region has no single market that accounts for a significant portion of our consolidated net sales.
Previous wording
Economic conditions across the region, including inflation in certain markets, weakened consumer confidence, and foreign exchange rate fluctuations, as well as political uncertainty in certain markets appear to be further hindering business recovery. The net sales decline across the EMEA markets during the three months ended March 31, 2025, as compared to the same period in 2024, were led by Spain and Italy, partially offset by increases in Mongolia and United Kingdom. Our Russia entity had no sales during the three months ended March 31, 2025 due to the suspension of product shipments to our Russia entity where its inventory had been fully depleted as of September 30, 2023; therefore our Russia entity will not have any product sales in future periods while its inventory remains fully depleted. As a result, Russian Members purchasing products in Kazakhstan, among other neighboring markets, led to increases in net sales in Kazakhstan, despite the recent quarter declining as compared to the first quarter of 2024.
Current wording
In the majority of our markets across the region net sales increased for both the three and six months ended June 30, 2025 as compared to the same periods in 2024. However, certain markets in the region continue to experience adverse economic conditions, such as inflation, weakened consumer confidence, and foreign exchange rate fluctuations, as well as political uncertainty and also experienced declines in net sales for the current quarter and first half of 2025 with the greatest decline occurring in Spain. Our Russia entity had no sales during the six months ended June 30, 2025 due to the suspension of product shipments to our Russia entity where its inventory had been fully depleted as of September 30, 2023; therefore our Russia entity will not have any product sales in future periods while its inventory remains fully depleted. As a result, Russian Members purchasing products from Kazakhstan, among other neighboring markets, led to increases in local currency sales in Kazakhstan, despite net sales declining in Kazakhstan during the recent quarter and first half of 2025 as compared to the same periods during 2024, primarily due to unfavorable impact of fluctuations in foreign currency exchange rates.
Previous wording
Focus areas for Herbalife and our Members in the region include promotions and events, launching new products, enhancing both online and in person training programs and meetings to help distributors improve their business, supporting Nutrition clubs and other DMOs, and other promotional activities in order to grow our sales in the region. The majority of the markets in the region instituted price increases to address market-specific conditions during the three months ended March 31, 2025 and 2024.
Current wording
Focus areas for Herbalife and our Members in the region include promotions and events, launching new products, enhancing both online and in person training programs and meetings to help distributors improve their business, supporting Nutrition clubs and other DMOs, and other promotional activities in order to grow our sales in the region. The majority of the markets in the region instituted price increases to address market-specific conditions during the six months ended June 30, 2025 and 2024.
Previous wording
The Asia Pacific region, which excludes China, reported net sales of $422.5 million for the three months ended March 31, 2025. Net sales decreased $8.7 million, or 2.0%, for the three months ended March 31, 2025, as compared to the same period in 2024. In local currency, net sales increased 1.6% for the three months ended March 31, 2025, as compared to the same period in 2024. The 2.0% decrease in net sales for the three months ended March 31, 2025 was primarily due to a 3.6% unfavorable impact of fluctuations in foreign currency exchange rates, a 1.1% unfavorable impact of sales mix, and a 0.2% decrease in sales volume, partially offset by a 2.8% favorable impact of price increases. Asia Pacific’s sales volume decreased for the three months ended March 31, 2025 as compared to the same period in 2024, after having an increase for the three months ended March 31, 2024.
Current wording
The Asia Pacific region, which excludes China, reported net sales of $408.6 million and $831.1 million for the three and six months ended June 30, 2025, respectively. Net sales decreased $8.1 million, or 1.9%, and $16.8 million, or 2.0%, for the three and six months ended June 30, 2025, respectively, as compared to the same periods in 2024. In local currency, net sales decreased 1.2% and increased 0.2% for the three and six months ended June 30, 2025, respectively, as compared to the same periods in 2024. The 1.9% decrease in net sales for the three months ended June 30, 2025 was primarily due to a 3.1% decrease in sales volume, a 0.7% unfavorable impact of sales mix, and a 0.7% unfavorable impact of fluctuations in foreign currency exchange rates, partially offset by a 2.6% favorable impact of price increases. The 2.0% decrease in net sales for the six months ended June 30, 2025 was primarily due to a 2.2% unfavorable impact of fluctuations in foreign currency exchange rates, a 1.6% decrease in sales volume, and a 0.9% unfavorable impact of sales mix, partially offset by a 2.7% favorable impact of price increases. The Asia Pacific region saw a sales volume decrease for the second quarter of 2025 compared to the same period in 2024, and the decrease was more than the prior year period decrease, and saw a sales volume decrease for the first half of 2025, after having an increase for the same period in 2024.
Previous wording
Net sales in India were $209.3 million for the three months ended March 31, 2025. Net sales increased $5.8 million, or 2.9%, for the three months ended March 31, 2025, as compared to the same period in 2024. In local currency, net sales increased 7.2% for the three months ended March 31, 2025, as compared to the same period in 2024. The fluctuation of foreign currency exchange rates had an unfavorable impact of $8.9 million on net sales for the three months ended March 31, 2025. The sales volume in India increased 4.5% for the three months ended March 31, 2025, as compared to the same period in 2024. Our growth rate in the India market for the three months ended March 31, 2025 was less than the growth rate experienced during the same period in 2024. We continue to promote our brand, such as through sports sponsorships and in-person events. The India market had no price increase during the three months ended March 31, 2025. During November 2024, the India market implemented a 3.0% price increase.
Current wording
Net sales in India were $203.6 million and $412.9 million for the three and six months ended June 30, 2025, respectively. Net sales decreased $1.0 million, or 0.5%, and increased $4.8 million, or 1.2%, for the three and six months ended June 30, 2025, respectively, as compared to the same periods in 2024. In local currency, net sales increased 2.1% and 4.6% for the three and six months ended June 30, 2025, respectively, as compared to the same periods in 2024. The fluctuation of foreign currency exchange rates had an unfavorable impact of $5.2 million and $14.2 million on net sales for the three and six months ended June 30, 2025, respectively. The sales volume in India decreased 0.7% and increased 1.8% for the three and six months ended June 30, 2025, respectively, as compared to the same periods in 2024. Our growth rate in the India market for the six months ended June 30, 2025 was less than the growth rate experienced during the same period in 2024. We continue to promote our brand, such as through sports sponsorships and in-person events. The India market had no price increase during the six months ended June 30, 2025. During November 2024, the India market implemented a 3.0% price increase.
Previous wording
Net sales in Vietnam were $75.4 million for the three months ended March 31, 2025. Net sales decreased $0.2 million, or 0.3%, for the three months ended March 31, 2025, as compared to the same period in 2024. In local currency, net sales increased 3.2% for the three months ended March 31, 2025, as compared to the same period in 2024. The fluctuation of foreign currency exchange rates had an unfavorable impact of $2.6 million on net sales for the three months ended March 31, 2025. The sales volume were flat in Vietnam for the three months ended March 31, 2025, as compared to the 2024 period. Focus areas for Vietnam market include sports sponsorship, promotional initiatives, and sales events. Members’ Nutrition Club operations continue to be an important DMO in the market which management continues to support and monitor. The market implemented a 2.5% price increase in March 2025. During March 2024, the market implemented a 3.5% price increase. Further, changes to direct-selling regulations in the market were approved by the Vietnam government in April 2023; we continue to work closely with the Vietnam government to monitor their interpretations of these regulations, and address them accordingly. In January 2025, the Vietnam government renewed our direct selling license, which will remain valid until January 2030, at which time we will seek its renewal.
Current wording
Net sales in Vietnam were $60.2 million and $135.6 million for the three and six months ended June 30, 2025, respectively. Net sales decreased $2.7 million, or 4.3%, and $2.9 million, or 2.1%, for the three and six months ended June 30, 2025, respectively, as compared to the same periods in 2024. In local currency, net sales decreased 2.0% and increased 0.9% for the three and six months ended June 30, 2025, respectively, as compared to the same periods in 2024. The fluctuation of foreign currency exchange rates had an unfavorable impact of $1.4 million and $4.1 million on net sales for the three and six months ended June 30, 2025, respectively. The sales volumes decreased in Vietnam for both the three and six months ended June 30, 2025, as compared to the 2024 periods. Focus areas for the Vietnam market include sports sponsorship, promotional initiatives, and sales events. Members’ Nutrition Club operations continue to be an important DMO in the market which management continues to support and monitor. The market implemented a 2.5% price increase in March 2025. During March 2024, the market implemented a 3.5% price increase. Further, changes to direct-selling regulations in the market were approved by the Vietnam government in April 2023; we continue to work closely with the Vietnam government to monitor their interpretations of these regulations, and address them accordingly. In January 2025, the Vietnam government renewed our direct selling license, which will remain valid until January 2030, at which time we will seek its renewal.
Previous wording
Across several other markets, net sales was down for the three months ended March 31, 2025 as compared to the 2024 period, most significantly for South Korea, Taiwan, and Indonesia. We continued to see a decline of new Members for some markets. In addition, Members’ Nutrition Club operations continue to recover from macroeconomic conditions including inflationary pressure and high interest rates in certain markets that have also challenged some areas of customer demand. Our efforts in the region include programs and promotional initiatives to incentivize sales, and launching new products. Some markets in the region instituted price increases to address market-specific conditions during the three months ended March 31, 2025 and 2024.
Current wording
Across several other markets, net sales were down for the three months ended June 30, 2025 as compared to the same period in 2024, with the greatest declines in Thailand and Indonesia, and net sales were also down for the six months ended June 30, 2025 as compared to the same period in 2024, with the greatest declines in South Korea and Taiwan. We continued to see a decline of new Members for some markets. In addition, Members’ Nutrition Club operations continue to recover from macroeconomic conditions including inflationary pressure and high interest rates in certain markets that have also challenged some areas of customer demand. Our efforts in the region include programs and promotional initiatives to incentivize sales, and launching new products. Most markets in the region instituted price increases to address market-specific conditions during the six months ended June 30, 2025 and 2024.
Previous wording
The China region reported net sales of $64.8 million for the three months ended March 31, 2025. Net sales decreased $10.4 million, or 13.8%, for the three months ended March 31, 2025 as compared to the same period in 2024. In local currency, net sales decreased 12.9% for the three months ended March 31, 2025, as compared to the same period in 2024. The 13.8% decrease in net sales for the three months ended March 31, 2025 was primarily due to a 13.9% decrease in sales volume and a 0.9% unfavorable impact of fluctuations in foreign currency exchange rates, partially offset by a 1.0% favorable impact of sales mix. China’s sales volume decreased for the three months ended March 31, 2025 as compared to the same period in 2024, after having an increase for the three months ended March 31, 2024. The China region had no price increase during the three months ended March 31, 2025 and during the twelve months ended December 31, 2024.
Current wording
The China region reported net sales of $80.0 million and $144.8 million for the three and six months ended June 30, 2025, respectively. Net sales decreased $1.7 million, or 2.1%, and $12.1 million, or 7.7%, for the three and six months ended June 30, 2025, respectively, as compared to the same periods in 2024. In local currency, net sales decreased 2.2% and 7.3% for the three and six months ended June 30, 2025, respectively, as compared to the same periods in 2024. The 2.1% decrease in net sales for the three months ended June 30, 2025 was primarily due to a 5.8% decrease in sales volume, partially offset by a 3.6% favorable impact of sales mix. The 7.7% decrease in net sales for the six months ended June 30, 2025 was primarily due to a 9.9% decrease in sales volume, partially offset by a 2.6% favorable impact of sales mix. China saw a sales volume decrease for the second quarter of 2025 compared to the same period in 2024, and the decrease was more than the prior year period decrease, and saw a sales volume decrease for the first half of 2025, after having an increase for the same period in 2024. The China region had no price increase during the six months ended June 30, 2025 and during the twelve months ended December 31, 2024.
Previous wording
Sales volume was down for the three months ended March 31, 2025 as compared to the 2024 period as our Members adjust to our sales initiatives and they continue rebuilding and optimizing their business process. Other focus areas for China include enhancing our digital capabilities and offerings, such as improving the integration of our technological and enhanced tools to make it easier for our Members to do business, encouraging a customer-based approach through customer loyalty programs which we continue to enhance to engage customers, and supporting Nutrition Clubs. We have expanded our product line for the China market and continue to conduct sales promotions in the region.
Current wording
In China we continue to enhance our digital capabilities and offerings, such as improving the integration of our technological and enhanced tools to make it easier for our Members to do business, encouraging a customer-based approach through customer loyalty programs which we continue to enhance to engage customers, and supporting Nutrition Clubs. We have expanded our product line for the China market and continue to conduct sales promotions in the region.
Previous wording
Gross profit was $956.5 million and $979.3 million for the three months ended March 31, 2025 and 2024, respectively. Gross profit as a percentage of net sales was 78.3% and 77.5% for the three months ended March 31, 2025 and 2024, respectively, or a favorable net increase of 84 basis points.
Current wording
Gross profit was $982.2 million and $998.0 million for the three months ended June 30, 2025 and 2024, respectively, and $1,938.7 million and $1,977.3 million for the six months ended June 30, 2025 and 2024, respectively. Gross profit as a percentage of net sales was 78.0% and 77.9% for the three months ended June 30, 2025 and 2024, respectively, or a favorable net increase of 11 basis points, and 78.1% and 77.7% for the six months ended June 30, 2025 and 2024, respectively, or a favorable net increase of 47 basis points.
Previous wording
The increase in gross profit as a percentage of net sales for the three months ended March 31, 2025 as compared to the same period in 2024 included the favorable impact of price increases of 81 basis points; favorable cost changes related to self-manufacturing and sourcing of 48 basis points primarily related to decreased raw material costs; and favorable other cost changes of 14 basis points; partially offset by the unfavorable impact of higher inventory write-downs of 47 basis points; unfavorable changes in sales mix of 7 basis points; and the unfavorable impact of foreign currency fluctuations of 5 basis points.
Current wording
The increase in gross profit as a percentage of net sales for the three months ended June 30, 2025 as compared to the same period in 2024 included the favorable impact of price increases of 68 basis points; the favorable impact of lower inventory write-downs of 18 basis points; partially offset by the unfavorable impact of foreign currency fluctuations of 62 basis points; unfavorable cost changes related to self-manufacturing and sourcing of 11 basis points; and unfavorable other cost changes of 2 basis points.
Previous wording
Royalty overrides were $401.8 million and $415.2 million for the three months ended March 31, 2025 and 2024, respectively. Royalty overrides as a percentage of net sales were 32.9% and 32.9% for the three months ended March 31, 2025 and 2024, respectively.
Current wording
Royalty overrides were $406.5 million and $415.3 million for the three months ended June 30, 2025 and 2024, respectively, and $808.3 million and $830.5 million for the six months ended June 30, 2025 and 2024, respectively. Royalty overrides as a percentage of net sales were 32.3% and 32.4% for the three months ended June 30, 2025 and 2024, respectively, and 32.5% and 32.6% for the six months ended June 30, 2025 and 2024, respectively.
Previous wording
Royalty overrides as a percentage of net sales remained flat for the three months ended March 31, 2025 as compared to the same period in 2024. This was primarily due to favorable changes in mix of products and countries, offset by lower net sales in China as a proportion of our total worldwide net sales. Generally, royalty overrides as a percentage of net sales may vary from period to period due to changes in the mix of products and countries because full royalty overrides are not paid on certain products and in certain countries. The majority of service fees to our independent service providers in China are included in selling, general, and administrative expenses while Member compensation for all other countries is included in Royalty overrides.
Current wording
The slight decrease in royalty overrides as a percentage of net sales for the three months ended June 30, 2025, as compared to the same period in 2024, was primarily due to favorable changes in mix of products and countries. The slight decrease in royalty overrides as a percentage of net sales for the six months ended June 30, 2025, as compared to the same period in 2024, was primarily due to favorable changes in mix of products and countries, partially offset by lower net sales in China as a proportion of our total worldwide net sales. Generally, royalty overrides as a percentage of net sales may vary from period to period due to changes in the mix of products and countries because full royalty overrides are not paid on certain products and in certain countries. The majority of service fees to our independent service providers in China are included in selling, general, and administrative expenses while Member compensation for all other countries is included in Royalty overrides.
Previous wording
Selling, general, and administrative expenses were $431.9 million and $492.2 million for the three months ended March 31, 2025 and 2024, respectively. Selling, general, and administrative expenses as a percentage of net sales were 35.3% and 38.9% for the three months ended March 31, 2025 and 2024, respectively.
Current wording
Selling, general, and administrative expenses were $447.9 million and $502.3 million for the three months ended June 30, 2025 and 2024, respectively, and $879.8 million and $994.5 million for the six months ended June 30, 2025 and 2024, respectively. Selling, general, and administrative expenses as a percentage of net sales were 35.6% and 39.2% for the three months ended June 30, 2025 and 2024, respectively, and 35.5% and 39.1% for the six months ended June 30, 2025 and 2024, respectively.
Previous wording
The $60.3 million decrease in selling, general, and administrative expenses for the three months ended March 31, 2025 as compared to the same period in 2024 was driven by $51.5 million in lower labor and benefits costs, $5.3 million in lower service fees for China independent service providers due to lower sales in China, $5.2 million in lower Member events and promotions, and $5.2 million in lower professional fees. The decrease in labor and benefit costs includes lower employee bonus accruals, lower employee retention and separation costs related to the Restructuring Program and the Transformation Program, and savings on labor cost resulting from the restructuring initiatives.
Current wording
The $114.7 million decrease in selling, general, and administrative expenses for the six months ended June 30, 2025 as compared to the same period in 2024 was driven by $103.6 million in lower labor and benefits costs, $10.8 million in lower professional fees primarily from lower expenses related to the Digital Transformation Program, and $6.9 million in lower service fees for China independent service providers due to lower sales in China. The decrease in labor and benefit costs includes lower employee bonus accruals, lower employee retention and separation costs related to the Restructuring Program and the Transformation Program, and savings on labor cost resulting from the restructuring initiatives.
Previous wording
We did not recognize any government grant income related to our regional headquarters and distribution centers within China during the three months ended March 31, 2025 and 2024.
Current wording
We did not recognize any government grant income related to our regional headquarters and distribution centers within China during the three and six months ended June 30, 2024.
Previous wording
The increase in interest expense, net for the three months ended March 31, 2025 as compared to the same period in 2024 was primarily due to an increase in our weighted-average interest rate as a result of the April 2024 debt refinancing transactions, partially offset by a decrease in our overall weighted-average borrowings. See Note 4, Long-Term Debt, to the Condensed Consolidated Financial Statements included in Part I, Item 1, Financial Statements, of this Quarterly Report on Form 10-Q for further discussion.
Current wording
The decrease in interest expense, net for the three months ended June 30, 2025 as compared to the same period in 2024 was primarily due to a decrease in our overall weighted-average borrowings. The increase in interest expense, net for the six months ended June 30, 2025 as compared to the same period in 2024 was primarily due to an increase in our weighted-average interest rate as a result of the April 2024 debt refinancing transactions, partially offset by a decrease in our overall weighted-average borrowings. See Note 4, Long-Term Debt, to the Condensed Consolidated Financial Statements included in Part I, Item 1, Financial Statements, of this Quarterly Report on Form 10-Q for further discussion.
Previous wording
Income taxes were $20.4 million and $9.7 million for the three months ended March 31, 2025 and 2024, respectively. The effective income tax rate was 28.8% and 28.5% for the three months ended March 31, 2025 and 2024, respectively. The increase in the effective tax rate for the three months ended March 31, 2025, as compared to the same period in 2024, was due to a decrease in tax benefits from discrete events partially offset by changes in the geographic mix of the Company’s income.
Current wording
Income taxes were $29.8 million and $7.5 million for the three months ended June 30, 2025 and 2024, respectively, and $50.2 million and $17.2 million for the six months ended June 30, 2025 and 2024, respectively. The effective income tax rate was 37.7% and 61.5% for the three months ended June 30, 2025 and 2024, respectively, and 33.5% and 37.2% for the six months ended June 30, 2025 and 2024, respectively. The decrease in the effective tax rate for the three months ended June 30, 2025, as compared to the same period in 2024, was primarily due to changes in the geographic mix of the Company’s income and a decrease in tax expense from discrete events. The decrease in the effective tax rate for the six months ended June 30, 2025, as compared to the same period in 2024, was primarily due to changes in the geographic mix of the Company’s income, partially offset by a decrease in tax benefits from discrete events.
Previous wording
We have historically met our short- and long-term working capital and capital expenditure requirements, including funding for expansion of operations, through net cash flows provided by operating activities. Variations in sales of our products directly affect the availability of funds. There are no material contractual restrictions on our ability to transfer and remit funds among our international affiliated companies. However, there are foreign currency restrictions in certain countries which could reduce our ability to timely obtain U.S. dollars. Even with these restrictions and the current inflationary environment, which is improving but has remained elevated in certain markets during the three months ended March 31, 2025, we believe we will have sufficient resources, including cash flow from operating activities and longer-term access to capital markets, to meet debt service obligations in a timely manner and be able to continue to meet our objectives.
Current wording
We have historically met our short- and long-term working capital and capital expenditure requirements, including funding for expansion of operations, through net cash flows provided by operating activities. Variations in sales of our products directly affect the availability of funds. There are no material contractual restrictions on our ability to transfer and remit funds among our international affiliated companies. However, there are foreign currency restrictions in certain countries which could reduce our ability to timely obtain U.S. dollars. Even with these restrictions and the current inflationary environment, which is improving but has remained elevated in certain markets during the six months ended June 30, 2025, we believe we will have sufficient resources, including cash flow from operating activities and longer-term access to capital markets, to meet debt service obligations in a timely manner and be able to continue to meet our objectives.
Previous wording
Historically, our debt has not resulted from the need to fund our normal operations, but instead has resulted primarily from our share repurchase programs. Since inception in 2007, total share repurchases amounted to approximately $6.5 billion. While a significant net sales decline could potentially affect the availability of funds, many of our largest expenses are variable in nature, which we believe protects our funding in all but a dramatic net sales downturn. Our $329.4 million cash and cash equivalents as of March 31, 2025 and our senior secured credit facility, in addition to cash flow from operations, can be used to support general corporate purposes, including any future strategic investment opportunities, share repurchases, and dividends.
Current wording
Historically, our debt has not resulted from the need to fund our normal operations, but instead has resulted primarily from our share repurchase programs. Since inception in 2007, total share repurchases amounted to approximately $6.5 billion. While a significant net sales decline could potentially affect the availability of funds, many of our largest expenses are variable in nature, which we believe protects our funding in all but a dramatic net sales downturn. Our $320.9 million cash and cash equivalents as of June 30, 2025 and our senior secured credit facility, in addition to cash flow from operations, can be used to support general corporate purposes, including any future strategic investment opportunities, share repurchases, and dividends.
Previous wording
For the three months ended March 31, 2025, we generated $0.2 million of operating cash flow as compared to $13.8 million of operating cash flow generated for the same period in 2024. The decrease in our operating cash flow was the result of $48.7 million of unfavorable changes in operating assets and liabilities, partially offset by $35.1 million of higher net income excluding non-cash and reconciling items disclosed within our condensed consolidated statement of cash flows. The $48.7 million of unfavorable changes in operating assets and liabilities was primarily the result of unfavorable changes in receivables, inventories, and other current liabilities, partially offset by a favorable change in accounts payable. The $35.1 million of higher net income excluding non-cash and reconciling items was primarily driven by lower selling, general and administrative expense and royalty overrides, partially offset by lower gross profit driven by lower net sales, higher interest expense and higher income taxes (See Summary Financial Results above for further discussion).
Current wording
For the six months ended June 30, 2025, we generated $96.2 million of operating cash flow as compared to $116.3 million of operating cash flow generated for the same period in 2024. The decrease in our operating cash flow was the result of $82.6 million of unfavorable changes in operating assets and liabilities, partially offset by $62.5 million of higher net income excluding non-cash and reconciling items disclosed within our condensed consolidated statement of cash flows. The $82.6 million of unfavorable changes in operating assets and liabilities was primarily the result of unfavorable changes in receivables, inventories, and other current liabilities driven by higher employee bonus payments, partially offset by a favorable change in prepaid expenses and other current assets, and accounts payable. The $62.5 million of higher net income excluding non-cash and reconciling items was primarily driven by lower selling, general and administrative expense and royalty overrides, partially offset by lower gross profit driven by lower net sales, higher interest expense and higher income taxes (See Summary Financial Results above for further discussion).
Previous wording
Capital expenditures, including accrued capital expenditures, for the three months ended March 31, 2025 and 2024 were $20.0 million and $33.6 million, respectively. The majority of these expenditures during the three months ended March 31, 2025 represented investments in management information systems, including initiatives to develop enhanced Member tools which includes our $400 million multi-year Digital Technology Program that is focused on enhancing and rebuilding our Member facing technology platform and web-based Member tools to provide enhanced digital capabilities and experiences to our Members, which we also refer to as Herbalife One. We expect to continue our investments in these areas and expect to incur total capital expenditures of approximately $90 million to $120 million for the full year 2025, which includes Herbalife One. We have incurred approximately $341 million of implementation costs relating to Herbalife One as of March 31, 2025. In addition, based on the Herbalife One implementation costs incurred, we began to recognize non-cash amortization expenses during the first quarter of 2024 and recognized approximately $35 million of these non-cash amortization expenses within our full-year 2024 consolidated statement of income, and we expect to recognize $40 million to $45 million of non-cash amortization expenses for the full-year 2025 and recognize similar amounts of non-cash amortization expenses thereafter, which could vary depending on the total actual future Herbalife One related expenditures and the associated timing of future technology being available for deployment. The capital expenditures relating to Herbalife One, are separate to the Transformation Program described further below.
Current wording
Capital expenditures, including accrued capital expenditures, were $39.8 million and $58.7 million for the six months ended June 30, 2025 and 2024, respectively. The majority of these expenditures during the six months ended June 30, 2025 represented investments in management information systems, including initiatives to develop enhanced Member tools which includes our $400 million multi-year Digital Technology Program that is focused on enhancing and rebuilding our Member facing technology platform and web-based Member tools to provide enhanced digital capabilities and experiences to our Members, which we also refer to as Herbalife One. We expect to continue our investments in these areas and expect to incur total capital expenditures of approximately $75 million to $95 million for the full year 2025, which includes Herbalife One. We have incurred approximately $348.2 million of implementation costs relating to Herbalife One as of June 30, 2025. In addition, based on the Herbalife One implementation costs incurred, we began to recognize non-cash amortization expenses during the first quarter of 2024 and recognized approximately $35 million of these non-cash amortization expenses within our full-year 2024 consolidated statement of income, and we expect to recognize $40 million to $45 million of non-cash amortization expenses for the full-year 2025 and recognize similar amounts of non-cash amortization expenses thereafter, which could vary depending on the total actual future Herbalife One related expenditures and the associated timing of future technology being available for deployment. The capital expenditures relating to Herbalife One, are separate to the Transformation Program described further below.
Previous wording
In 2021, we initiated a global transformation program to optimize global processes for future growth, or the Transformation Program. The Transformation Program involves the investment in certain new technologies and the realignment of infrastructure and the locations of certain functions to better support distributors and customers. The Transformation Program is expected to deliver annual savings of approximately $110 million with approximately $70 million of savings realized in 2023 and approximately $110 million of annual savings realized in 2024 and thereafter. We have incurred total pre-tax expenses of approximately $92.5 million through March 31, 2025, of which zero and $5.9 million were incurred in the three months ended March 31, 2025 and 2024, respectively, and recognized in selling, general, and administrative expenses within our condensed consolidated statements of income. In addition, we have incurred approximately $20 million of related capital expenditures from inception to date, primarily relating to technology, to support the Transformation Program. The Transformation Program was completed as of December 31, 2024.
Current wording
In 2021, we initiated a global transformation program to optimize global processes for future growth, or the Transformation Program. The Transformation Program involves the investment in certain new technologies and the realignment of infrastructure and the locations of certain functions to better support distributors and customers. The Transformation Program is expected to deliver annual savings of approximately $110 million with approximately $70 million of savings realized in 2023 and approximately $110 million of annual savings realized in 2024 and thereafter. We have incurred total pre-tax expenses of approximately $92.5 million through June 30, 2025, of which zero and $3.5 million were incurred in the three months ended June 30, 2025 and 2024, respectively, and zero and $9.4 million were incurred in the six months ended June 30, 2025 and 2024, respectively, and recognized in selling, general, and administrative expenses within our condensed consolidated statements of income. In addition, we have incurred approximately $20 million of related capital expenditures from inception to date, primarily relating to technology, to support the Transformation Program. The Transformation Program was completed as of December 31, 2024.
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Rearranged current paragraphs (2)
Current report — wording carried from elsewhere
The increase in gross profit as a percentage of net sales for the six months ended June 30, 2025 as compared to the same period in 2024 included the favorable impact of price increases of 75 basis points; favorable cost changes related to self-manufacturing and sourcing of 20 basis points; partially offset by the unfavorable impact of foreign currency fluctuations of 34 basis points; and the unfavorable impact of higher inventory write-downs of 14 basis points.
Current report — wording carried from elsewhere
The $54.4 million decrease in selling, general, and administrative expenses for the three months ended June 30, 2025 as compared to the same period in 2024 was driven by $52.0 million in lower labor and benefits costs, and $5.6 million in lower professional fees, primarily from lower expenses related to the Digital Transformation Program; partially offset by $9.1 million in higher Member events and promotions. The decrease in labor and benefit costs includes lower employee retention and separation costs related to the Restructuring Program and lower employee bonus accruals.