HERBALIFE LTD.

Previous wording

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with other information, including our condensed consolidated financial statements and related notes included in Part I, Item 1, Financial Statements, of this Quarterly Report on Form 10-Q, and Part I, Item 1A, Risk Factors, and our consolidated financial statements appearing in our Annual Report on Form 10-K for the year ended December 31, 2024, or the 2024 10-K. Unless the context otherwise requires, all references herein to the “Company,” “we,” “us” or “our,” or similar terms, refer to Herbalife Ltd., a Cayman Islands exempted company with limited liability, and its consolidated subsidiaries.

Current wording

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with other information, including Part II, Item 1A, Risk Factors and our condensed consolidated financial statements and related notes included in Part I, Item 1, Financial Statements, of this Quarterly Report on Form 10-Q, and Part I, Item 1A, Risk Factors, and our consolidated financial statements appearing in our Annual Report on Form 10-K for the year ended December 31, 2024, or the 2024 10-K. Unless the context otherwise requires, all references herein to the “Company,” “we,” “us” or “our,” or similar terms, refer to Herbalife Ltd., a Cayman Islands exempted company with limited liability, and its consolidated subsidiaries.

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 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.

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 nine months ended September 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

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.

Current wording

Net income attributable to Herbalife was $43.2 million, or $0.42 per diluted share, and $142.9 million, or $1.38 per diluted share, for the three and nine months ended September 30, 2025, respectively. Net income attributable to Herbalife decreased $4.2 million, or 8.9%, and increased $66.5 million, or 87.0%, for the three and nine months ended September 30, 2025, respectively, as compared to the same periods in 2024. The decrease in net income attributable to Herbalife for the three months ended September 30, 2025 was mainly due to $10.6 million higher royalty overrides driven by higher net sales and $8.5 million higher income taxes; partially offset by $17.9 million higher gross profit driven by higher net sales. The increase in net income attributable to Herbalife for the nine months ended September 30, 2025 was mainly due to $111.1 million lower selling, general, and administrative expenses driven by lower labor and benefits costs (see Selling, General, and Administrative Expenses below for further discussion), $11.6 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 $41.5 million higher income taxes and $20.7 million lower gross profit driven by lower net sales.

Previous 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.

Current wording

Net income attributable to Herbalife for the three months ended September 30, 2025 included $6.3 million favorable deferred income tax impacts relating to the changes in the Company’s corporate entity structure in 2024, a $0.8 million pre-tax unfavorable impact ($1.0 million post-tax) of Restructuring Program expenses, primarily relating to employee retention and separation costs, a $0.6 million pre-tax unfavorable impact ($0.8 million post-tax) of Technology Realignment Program expenses, primarily relating to employee retention and separation costs, and a $0.2 million post-tax unfavorable impact 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 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 wording

Net income attributable to Herbalife for the nine months ended September 30, 2025 included $19.2 million favorable deferred income tax impacts relating to the changes in the Company’s corporate entity structure in 2024, a $4.8 million pre-tax unfavorable impact ($3.9 million post-tax) of Restructuring Program expenses, primarily relating to employee retention and separation costs, a $4.2 million pre-tax unfavorable impact ($3.4 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 ($2.5 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 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.

Current wording

Net income attributable to Herbalife for the three months ended September 30, 2024 included a $5.1 million pre-tax unfavorable impact ($4.6 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, $4.0 million pre-tax favorable impact ($3.1 million post-tax) of gain on sale of the Company’s land, building, and related building improvements of its office building in Torrance, California, a $2.7 million pre-tax unfavorable impact ($8.0 million post-tax) of Restructuring Program expenses, primarily relating to employee retention and separation costs, a $0.6 million post-tax unfavorable impact of Transformation Program expenses, primarily relating to employee retention and separation costs, and a $0.5 million post-tax unfavorable impact of loss on extinguishment of debt related to the April 2024 debt refinancing transactions.

Previous wording

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 wording

Net income attributable to Herbalife for the nine months ended September 30, 2024 included a $68.2 million pre-tax unfavorable impact ($53.3 million post-tax) of Restructuring Program expenses, primarily relating to employee retention and separation costs; $22.1 million pre-tax unfavorable impact ($19.6 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; $10.5 million pre-tax unfavorable impact ($8.4 million post-tax) of loss on extinguishment of debt related to the April 2024 debt refinancing transactions, a $9.4 million pre-tax unfavorable impact ($7.5 million post-tax) of Transformation Program expenses, primarily relating to employee retention and separation costs, and $4.0 million pre-tax favorable impact ($3.1 million post-tax) of gain on sale of the Company’s land, building, and related building improvements of its office building in Torrance, California.

Previous 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.

Current wording

For a discussion of China’s net sales for the three and nine months ended September 30, 2025, see the China section of Sales by Geographic Region below.

Previous 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.

Current wording

The Primary Reporting Segment reported contribution margin of $510.6 million, or 42.5% of net sales, and $1,518.1 million, or 42.9% of net sales for the three and nine months ended September 30, 2025, respectively, representing an increase of $8.4 million, or 1.7%, and $1.0 million, or 0.1%, respectively, as compared to the same periods in 2024. The 1.7% increase in contribution margin for the three months ended September 30, 2025 was primarily the result of a 6.0% favorable impact of price increases and a 0.8% favorable impact of sales volume increases, partially offset by a 2.9% unfavorable impact of foreign currency fluctuations, a 1.5% unfavorable impact of sales mix, and a 0.7% unfavorable impact of cost changes related to self-manufacturing and sourcing. The 0.1% increase in contribution margin for the nine months ended September 30, 2025 was primarily the result of a 5.7% favorable impact of price increases, partially offset by a 3.9% unfavorable impact of foreign currency fluctuations and a 1.3% unfavorable impact of sales volume decreases.

Previous 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.

Current wording

China reported contribution margin of $28.2 million and $80.1 million for the three and nine months ended September 30, 2025, respectively, representing an increase of $2.6 million, or 10.2%, and $0.5 million, or 0.6%, for the three and nine months ended September 30, 2025, respectively, as compared to the same periods in 2024. The 10.2% increase in contribution margin for the three months ended September 30, 2025 was primarily the result of a 20.6% favorable impact of sales mix and a 2.2% favorable impact of cost changes related to self-manufacturing and sourcing, partially offset by an 11.4% unfavorable impact of sales volume decreases and a 2.6% unfavorable impact of higher inventory write-downs. The 0.6% increase in contribution margin for the nine months ended September 30, 2025 was primarily the result of a 10.0% favorable impact of sales mix and a 2.4% favorable impact of cost changes related to self-manufacturing and sourcing, partially offset by a 10.4% unfavorable impact of sales volume decreases and a 1.3% unfavorable impact of higher inventory write-downs.

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 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.

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 nine months ended September 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

We are supporting Members with new product launches, a training and recognition program, targeted communications and sales incentives, as well as modernizing our technological tools including the launch of digital start-up kits and E-commerce tools, in order to enhance our Members’ ability to market and sell our products and promote business opportunities. The majority of the region implemented 2.3% price increases during January 2025. During March 2024, the region implemented 3.0% price increases.

Current wording

We are supporting Members with new product launches, such as our healthy lifespan supplement and our MultiBurn product, an innovative nonpharmaceutical weight loss supplement, a training and recognition program, targeted communications and sales incentives, as well as modernizing our technological tools including the launch of digital start-up kits and E-commerce tools, in order to enhance our Members’ ability to market and sell our products and promote business opportunities. The majority of the region implemented 2.3% price increases during January 2025. During March 2024, the region implemented 3.0% price increases.

Previous 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.

Current wording

The Latin America region reported net sales of $229.6 million and $646.5 million for the three and nine months ended September 30, 2025, respectively. Net sales increased $22.5 million, or 10.9%, and $13.5 million, or 2.1%, for the three and nine months ended September 30, 2025, respectively, as compared to the same periods in 2024. In local currency, net sales increased 10.7% and 10.3% for the three and nine months ended September 30, 2025, respectively, as compared to the same periods in 2024. The 10.9% increase in net sales for the three months ended September 30, 2025 was due to a 5.7% favorable impact of net price increases, a 2.6% favorable impact of sales mix, and a 2.4% increase in sales volume. The 2.1% increase in net sales for the nine months ended September 30, 2025 was due to a 4.6% favorable impact of net price increases, a 3.3% increase in sales volume, and a 2.3% favorable impact of sales mix, partially offset by an 8.2% unfavorable impact of fluctuations in foreign currency exchange rates. Latin America’s sales volume increased for the three months ended September 30, 2025, as compared to the same period in 2024, and the increase was less than the prior year period increase, and saw a sales volume increase for the nine months ended September 30, 2025 as compared to the same period in 2024, after having a decrease for the same period in 2024.

Previous 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.

Current wording

Net sales in Mexico were $146.8 million and $410.5 million for the three and nine months ended September 30, 2025, respectively. Net sales increased $15.3 million, or 11.6%, and decreased $4.6 million, or 1.1%, for the three and nine months ended September 30, 2025, respectively, as compared to the same periods in 2024. In local currency, net sales increased 10.1% and 9.0% for the three and nine months ended September 30, 2025, respectively, as compared to the same periods in 2024. The fluctuation of foreign currency exchange rates had a favorable impact of $1.9 million and an unfavorable impact of $41.9 million on net sales for the three and nine months ended September 30, 2025, respectively. Mexico’s sales volume increased 3.0% and 2.5% for the three and nine months ended September 30, 2025, respectively, as compared to the same periods in 2024. We believe, recent localized initiatives, new product launches, 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

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.

Current wording

Across other markets, net sales increased and were greatest for Peru, Bolivia, and Ecuador for the three months ended September 30, 2025, compared to the same period in 2024, and Peru, Bolivia, and Guatemala markets for the nine months ended September 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 nine months ended September 30, 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 and new product launches, may have been a contributing factor for the increases in sales volume for certain markets in the region during the nine months ended September 30, 2025.

Previous 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.

Current wording

The EMEA region reported net sales of $272.3 million and $833.5 million for the three and nine months ended September 30, 2025, respectively. Net sales increased $10.4 million, or 4.0%, and $5.9 million, or 0.7%, for the three and nine months ended September 30, 2025, respectively, as compared to the same periods in 2024. In local currency, net sales increased 2.3% and 1.5% for the three and nine months ended September 30, 2025, respectively, as compared to the same periods in 2024. The 4.0% increase in net sales for the three months ended September 30, 2025 was primarily due to a 5.3% favorable impact of price increases and a 1.7% favorable impact of fluctuations in foreign currency exchange rates, partially offset by a 1.9% decrease in sales volume and a 1.2% unfavorable impact of sales mix. The 0.7% increase in net sales for the nine months ended September 30, 2025 was primarily due to a 4.6% favorable impact of price increases and a 1.0% favorable impact of sales mix, partially offset by a 4.1% decrease in sales volume and a 0.8% unfavorable impact of fluctuations in foreign currency exchange rates. EMEA region’s sales volume decreased for the three and nine months ended September 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

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.

Current wording

In the majority of our markets across the region net sales increased for both the three and nine months ended September 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 nine months of 2025, as compared the same periods in 2024, with the greatest declines occurring in Spain. Our Russia entity had no sales during the nine months ended September 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 net sales for Kazakhstan during the three and nine months ended September 30, 2025, as compared to the same periods during 2024.

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 six months ended June 30, 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 nine months ended September 30, 2025 and 2024.

Previous 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.

Current wording

The Asia Pacific region, which excludes China, reported net sales of $437.4 million and $1,268.5 million for the three and nine months ended September 30, 2025, respectively. Net sales increased $1.3 million, or 0.3%, and decreased $15.5 million, or 1.2%, for the three and nine months ended September 30, 2025, respectively, as compared to the same periods in 2024. In local currency, net sales increased 2.8% and 1.1% for the three and nine months ended September 30, 2025, respectively, as compared to the same periods in 2024. The 0.3% increase in net sales for the three months ended September 30, 2025 was primarily due to a 2.7% favorable impact of price increases and a 1.8% increase in sales volume, partially offset by a 2.5% unfavorable impact of fluctuations in foreign currency exchange rates and a 1.6% unfavorable impact of sales mix. The 1.2% decrease in net sales for the nine months ended September 30, 2025 was primarily due to a 2.3% unfavorable impact of fluctuations in foreign currency exchange rates, a 1.1% unfavorable impact of sales mix, and a 0.5% decrease in sales volume, partially offset by a 2.7% favorable impact of price increases. The Asia Pacific region saw a sales volume increase for the third quarter of 2025, compared to the same period in 2024, after having a decrease for the same period in 2024, and saw a sales volume decrease for the nine months ended September 30, 2025, compared to the same period in 2024, after having an increase for the same period in 2024.

Previous 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.

Current wording

Net sales in India were $226.4 million and $639.3 million for the three and nine months ended September 30, 2025, respectively. Net sales increased $8.1 million, or 3.7%, and $12.9 million, or 2.1%, for the three and nine months ended September 30, 2025, respectively, as compared to the same periods in 2024. In local currency, net sales increased 8.1% and 5.8% for the three and nine months ended September 30, 2025, respectively, as compared to the same periods in 2024. The fluctuation of foreign currency exchange rates had an unfavorable impact of $9.6 million and $23.7 million on net sales for the three and nine months ended September 30, 2025, respectively. The sales volume in India increased 4.8% and 2.9% for the three and nine months ended September 30, 2025, respectively, as compared to the same periods in 2024. Our growth rate in the India market for the nine months ended September 30, 2025 was less than the growth rate experienced during the same period in 2024. To stimulate consumer spending, the India government announced a reduction in Goods and Services Tax (“GST”) rates across multiple sectors, effective on September 22, 2025, which resulted in a tax rate reduction from 18% to 5% for the majority of our products being sold to our Members. This reduction on the GST rate may have had a favorable impact on our net sales for the third quarter of 2025. We continue to promote our brand, such as through sports sponsorships and in-person events. The India market had no price increase during the nine months ended September 30, 2025. During November 2024, the India market implemented a 3.0% price increase.

Previous 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.

Current wording

Net sales in Vietnam were $71.5 million and $207.1 million for the three and nine months ended September 30, 2025, respectively. Net sales increased $1.8 million, or 2.6%, and decreased $1.1 million, or 0.5%, for the three and nine months ended September 30, 2025, respectively, as compared to the same periods in 2024. In local currency, net sales increased 7.7% and 3.2% for the three and nine months ended September 30, 2025, respectively, as compared to the same periods in 2024. The fluctuation of foreign currency exchange rates had an unfavorable impact of $3.6 million and $7.7 million on net sales for the three and nine months ended September 30, 2025, respectively. The sales volume in Vietnam increased 4.8% and was flat for the three and nine months ended September 30, 2025, respectively, as compared to the same periods in 2024. Focus areas for the Vietnam market include sports sponsorships, 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 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.

Current wording

Across several other markets, net sales were down for both the three and nine months ended September 30, 2025 as compared to the same periods in 2024, with the greatest declines in 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. Most markets in the region instituted price increases to address market-specific conditions during the nine months ended September 30, 2025 and 2024.

Previous 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.

Current wording

The China region reported net sales of $71.3 million and $216.1 million for the three and nine months ended September 30, 2025, respectively. Net sales decreased $3.5 million, or 4.7%, and $15.6 million, or 6.7%, for the three and nine months ended September 30, 2025, respectively, as compared to the same periods in 2024. In local currency, net sales decreased 4.8% and 6.5% for the three and nine months ended September 30, 2025, respectively, as compared to the same periods in 2024. The 4.7% decrease in net sales for the three months ended September 30, 2025 was primarily due to a 11.5% decrease in sales volume, partially offset by a 6.7% favorable impact of sales mix. The 6.7% decrease in net sales for the nine months ended September 30, 2025 was primarily due to a 10.4% decrease in sales volume, partially offset by a 3.9% favorable impact of sales mix. China saw a sales volume decrease for the third quarter of 2025, compared to the same period in 2024, and the decrease was less than the prior year period decrease, and saw a sales volume decrease for the nine months ended September 30, 2025, compared to the same period in 2024, after having flat sales volume for the same period in 2024. The China region had no price increase during the nine months ended September 30, 2025 and during the twelve months ended December 31, 2024.

Previous 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.

Current wording

Gross profit was $989.5 million and $971.6 million for the three months ended September 30, 2025 and 2024, respectively, and $2,928.2 million and $2,948.9 million for the nine months ended September 30, 2025 and 2024, respectively. Gross profit as a percentage of net sales was 77.7% and 78.3% for the three months ended September 30, 2025 and 2024, respectively, or an unfavorable net decrease of 65 basis points, and 78.0% and 77.9% for the nine months ended September 30, 2025 and 2024, respectively, or a favorable net increase of 10 basis points.

Previous wording

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 wording

The decrease in gross profit as a percentage of net sales for the three months ended September 30, 2025 as compared to the same period in 2024 included the unfavorable impact of foreign currency fluctuations of 94 basis points; unfavorable cost changes related to self-manufacturing and sourcing of 25 basis points; unfavorable other cost changes of 13 basis points; the unfavorable impact of higher inventory write-downs of 8 basis points; and unfavorable changes in sales mix of 6 basis points; partially offset by the favorable impact of price increases of 81 basis points.

Previous 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.

Current wording

The increase in gross profit as a percentage of net sales for the nine months ended September 30, 2025 as compared to the same period in 2024 included the favorable impact of price increases of 77 basis points; and favorable cost changes related to self-manufacturing and sourcing of 5 basis points; partially offset by the unfavorable impact of foreign currency fluctuations of 55 basis points; the unfavorable impact of higher inventory write-downs of 12 basis points; and unfavorable changes in sales mix of 5 basis points.

Previous 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.

Current wording

Royalty overrides were $416.1 million and $405.5 million for the three months ended September 30, 2025 and 2024, respectively, and $1,224.4 million and $1,236.0 million for the nine months ended September 30, 2025 and 2024, respectively. Royalty overrides as a percentage of net sales were 32.7% for both the three months ended September 30, 2025 and 2024, and 32.6% for both the nine months ended September 30, 2025 and 2024.

Previous 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.

Current wording

Royalty overrides as a percentage of net sales remained flat for the three and nine months ended September 30, 2025, as compared to the same periods 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.

Previous 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.

Current wording

Selling, general, and administrative expenses were $447.6 million and $444.0 million for the three months ended September 30, 2025 and 2024, respectively, and $1,327.4 million and $1,438.5 million for the nine months ended September 30, 2025 and 2024, respectively. Selling, general, and administrative expenses as a percentage of net sales were 35.1% and 35.8% for the three months ended September 30, 2025 and 2024, respectively, and 35.4% and 38.0% for the nine months ended September 30, 2025 and 2024, respectively.

Previous wording

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.

Current wording

The $3.6 million slight increase in selling, general, and administrative expenses for the three months ended September 30, 2025 as compared to the same period in 2024 was primarily driven by $6.1 million in higher Member events and promotions.

Previous 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.

Current wording

The $111.1 million decrease in selling, general, and administrative expenses for the nine months ended September 30, 2025 as compared to the same period in 2024 was primarily driven by $106.4 million in lower labor and benefits costs and $15.3 million in lower professional fees primarily from lower expenses related to the Digital Transformation Program. 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 and six months ended June 30, 2024.

Current wording

We did not recognize any government grant income related to our regional headquarters and distribution centers within China during the three months ended September 30, 2025. The $5.0 million of other operating income for the three months ended September 30, 2024 consisted of $5.0 million of government grant income for China.

Previous wording

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 wording

The $4.8 million of other operating income for the nine months ended September 30, 2025 consisted of $4.8 million of government grant income for China. The $5.0 million of other operating income for the nine months ended September 30, 2024 consisted of $5.0 million of government grant income for China.

Previous 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.

Current wording

The decrease in interest expense, net for the three months ended September 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 nine months ended September 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 and lower interest income earned as a result of a lower average balance on interest-bearing cash and cash equivalents, 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

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 wording

The $10.5 million of other expense, net for the nine months ended September 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).

Previous 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.

Current wording

Income taxes were $31.7 million and $23.2 million for the three months ended September 30, 2025 and 2024, respectively, and $81.9 million and $40.4 million for the nine months ended September 30, 2025 and 2024, respectively. The effective income tax rate was 42.4% and 32.9% for the three months ended September 30, 2025 and 2024, respectively, and 36.5% and 34.6% for the nine months ended September 30, 2025 and 2024, respectively. The increase in the effective tax rate for the three months ended September 30, 2025, as compared to the same period in 2024, was primarily due to changes in the geographic mix of our income partially offset by an increase in tax benefits from discrete events. The increase in the effective tax rate for the nine months ended September 30, 2025, as compared to the same period in 2024, was primarily due to a decrease in tax benefits from discrete events partially offset by changes in the geographic mix of our income.

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 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.

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 nine months ended September 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 $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.

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 $305.5 million cash and cash equivalents as of September 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 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).

Current wording

For the nine months ended September 30, 2025, we generated $235.0 million of operating cash flow as compared to $215.8 million of operating cash flow generated for the same period in 2024. The increase in our operating cash flow was the result of $101.8 million of higher net income excluding non-cash and reconciling items disclosed within our condensed consolidated statement of cash flows, partially offset by $82.6 million of unfavorable changes in operating assets and liabilities. The $101.8 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, and higher income taxes (See Summary Financial Results above for further discussion). The $82.6 million of unfavorable changes in operating assets and liabilities was primarily the result of unfavorable changes in other current liabilities driven by higher employee bonus payments as well as lower employee bonus accruals, and unfavorable changes in receivables.

Previous 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.

Current wording

Capital expenditures, including accrued capital expenditures, were $61.0 million and $83.6 million for the nine months ended September 30, 2025 and 2024, respectively. The majority of these expenditures during the nine months ended September 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 $80 million to $90 million for the full year 2025, which includes Herbalife One. We have incurred approximately $352.7 million of implementation costs relating to Herbalife One as of September 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.