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 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.

Current 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, 2025, or the 2025 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

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.

Current wording

While we continue to monitor the current global financial environment, including the impacts of 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 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.

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 three months ended March 31, 2026, we instituted pricing increases in certain markets to address region or market-specific conditions. We also instituted localized pricing actions in 2025. 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, including due to rising energy prices, 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

The war in Ukraine has also impacted our results there as well as in Russia and certain neighboring markets; we do not have any manufacturing operations in Russia and Ukraine and our combined total assets in Russia and Ukraine, which primarily consists of short-term assets, was less than 1% of our consolidated total assets as of September 30, 2025.

Current wording

The war in Ukraine has also impacted our results there as well as in Russia and certain neighboring markets; we do not have any manufacturing operations in Russia and Ukraine and our combined total assets in Russia and Ukraine, which primarily consists of short-term assets, was approximately 1% of our consolidated total assets as of March 31, 2026.

Previous wording

While certain Members may profit from their activities by reselling our products for amounts greater than the prices they pay us, Members that develop, retain, and manage other Members may earn additional compensation for those activities, which we refer to as“Royalty overrides.” Royalty overrides are a significant operating expense and consist of:

Current wording

Our“selling expenses”primarily consists of certain compensation to our Members. Our sales leader Members may also earn sales commissions and bonuses, which are also considered Member compensation. Globally, excluding China, while certain Members may profit from their activities by reselling our products for amounts greater than the prices they pay us, Members that develop, retain, and manage other Members may earn Member compensation for those activities, which is paid based on retail sales volume of certain other Members who are sponsored directly or indirectly by the Member. This Member compensation is a significant operating expense. In China, our independent service providers are compensated for marketing, sales support, and other services; the majority of these service fees to China independent service providers are also recognized as operating expenses. Member compensation, excluding China, also includes the Mark Hughes bonus payable to some of our most senior Members and other discretionary incentive payments to qualifying Members. Collectively, all of these Member compensation operating expenses are within selling expenses. 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 additional details regarding prior period selling expense amounts being reclassified to conform to current period presentation.

Previous wording

Because of local country regulatory constraints, we may be required to modify our Member incentive plans as described above. We also pay reduced royalty overrides with respect to certain products worldwide. Consequently, the total Royalty override percentage may vary over time.

Current wording

Because of local country regulatory constraints, we may be required to modify our Member incentive plans as described above. We also pay reduced Member compensation with respect to certain products worldwide. Consequently, the total Member compensation percentage may vary over time.

Previous wording

“Selling, general, and administrative expenses”represent our operating expenses, which include labor and benefits, service fees to China independent service providers, sales events, professional fees, travel and entertainment, Member promotions, occupancy costs, communication costs, bank fees, depreciation and amortization, foreign exchange gains and losses, and other miscellaneous operating expenses.

Current wording

“General and administrative expenses”represent our operating expenses, which include labor and benefits, sales events, professional fees, travel and entertainment, Member promotions, occupancy costs, communication costs, bank fees, depreciation and amortization, foreign exchange gains and losses, and other miscellaneous operating expenses.

Previous 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.

Current wording

Net income attributable to Herbalife was $61.9 million, or $0.57 per diluted share, for the three months ended March 31, 2026. Net income attributable to Herbalife increased $11.5 million, or 22.8%, for the three months ended March 31, 2026 as compared to the same period in 2025. The increase in net income attributable to Herbalife for the three months ended March 31, 2026 was mainly due to $69.6 million higher gross profit driven by higher net sales, $5.5 million of China grant income in 2026, and $5.2 million lower interest expense, net; partially offset by $31.1 million higher general and administrative expenses driven by higher labor and benefits costs (see General and Administrative Expenses below for further discussion), $28.4 million higher selling expenses driven by higher net sales, and $10.0 million higher income taxes.

Previous 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.

Current wording

Net income attributable to Herbalife for the three months ended March 31, 2026 included $5.4 million favorable deferred income tax impacts relating to the changes in the Company’s corporate entity structure in 2024, and a $2.4 million pre-tax unfavorable impact ($1.7 million post-tax) of Technology Realignment Program expenses, primarily relating to employee retention and separation costs.

Previous 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.

Current wording

Net income attributable to Herbalife 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.

Previous 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.

Current wording

For a discussion of China’s net sales for the three months ended March 31, 2026 as compared to the same period in 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.

Current wording

As discussed above under “Presentation,” contribution margin consists of net sales less cost of sales and selling expenses.

Previous 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.

Current wording

The Primary Reporting Segment reported contribution margin of $543.9 million, or 43.2% of net sales, for the three months ended March 31, 2026, representing an increase of $44.1 million, or 8.8%, as compared to the same period in 2025. The 8.8% increase in contribution margin for the three months ended March 31, 2026 was primarily the result of a 5.5% favorable impact of price increases, a 4.9% favorable impact of sales volume increases and a 1.3% favorable impact of lower inventory write downs, partially offset by a 3.7% unfavorable impact of sales mix and a 1.0% unfavorable impact of cost changes related to self-manufacturing and sourcing.

Previous wording

Management’s role, in-country and at the region and corporate level, is to provide Members with a competitive, broad, and innovative product line, offer leading-edge business tools and technology services, and encourage strong teamwork and Member leadership to make doing business with Herbalife simple. We continue to provide our Members with enhanced technology tools, which includes updated brand sites, for ordering, business performance, and customer retailing to make it easier for them to do business with us and to optimize their customers’ experiences. Management uses the Marketing Plan, which reflects the rules for our global network marketing organization that specify the qualification requirements and general compensation structure for Members, coupled with educational, training, and motivational programs and promotions to encourage Members to increase retailing, retention, and recruiting, which in turn affect net sales. Such programs include sales events such as Extravaganzas, Leadership Development Weekends and World Team Schools where large groups of Members network with other Members, learn retailing, retention, and recruiting techniques from our leading Members, and become more familiar with how to market and sell our products and business opportunities. Accordingly, management believes that these development and motivation programs increase the productivity of the sales leader network. The expenses for such programs are included in selling, general, and administrative expenses. We also use event and non-event product promotions to motivate Members to increase retailing, retention, and recruiting activities. These promotions have prizes ranging from qualifying for events to product prizes and vacations. In a number of markets, we have segmented our Member base into “preferred members” and “distributors” for more targeted and efficient communication and promotions for these two differently motivated types of Members. In certain other markets that have not been segmented, we use Member data to similarly categorize Members for communication and promotion efforts.

Current wording

Management’s role, in-country and at the region and corporate level, is to provide Members with a competitive, broad, and innovative product line, offer leading-edge business tools and technology services, and encourage strong teamwork and Member leadership to make doing business with Herbalife simple. We continue to provide our Members with enhanced technology tools, which includes updated brand sites, for ordering, business performance, and customer retailing to make it easier for them to do business with us and to optimize their customers’ experiences. Management uses the Marketing Plan, which reflects the rules for our global network marketing organization that specify the qualification requirements and general compensation structure for Members, coupled with educational, training, and motivational programs and promotions to encourage Members to increase retailing, retention, and recruiting, which in turn affect net sales. Such programs include sales events such as Extravaganzas, Leadership Development Weekends and World Team Schools where large groups of Members network with other Members, learn retailing, retention, and recruiting techniques from our leading Members, and become more familiar with how to market and sell our products and business opportunities. Accordingly, management believes that these development and motivation programs increase the productivity of the sales leader network. The expenses for such programs are included in general and administrative expenses. We also use event and non-event product promotions to motivate Members to increase retailing, retention, and recruiting activities. These promotions have prizes ranging from qualifying for events to product prizes and vacations. In a number of markets, we have segmented our Member base into “preferred members” and “distributors” for more targeted and efficient communication and promotions for these two differently motivated types of Members. In certain other markets that have not been segmented, we use Member data to similarly categorize Members for communication and promotion efforts.

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 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.

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 months ended March 31, 2026, as compared to the same period in 2025, 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 sales 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

Net sales in the U.S. were $256.4 million and $769.4 million for the three and nine months ended September 30, 2025, respectively. Net sales increased $2.9 million, or 1.1%, and decreased $18.1 million, or 2.3%, for the three and nine months ended September 30, 2025, respectively, as compared to the same periods in 2024.

Current wording

Net sales in the U.S. were $241.3 million for the three months ended March 31, 2026. Net sales decreased $6.4 million, or 2.6%, for the three months ended March 31, 2026 as compared to the same period in 2025.

Previous 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.

Current 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 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. During the first quarter of 2026, our preferred members in the North America region began transitioning to our new E-commerce platform and we implemented updates to our preferred member loyalty program. The majority of the region implemented 3.0% price increases during January 2026. The majority of the region implemented 2.3% price increases during January 2025.

Previous 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.

Current wording

Net sales in Mexico were $154.1 million for the three months ended March 31, 2026. Net sales increased $27.6 million, or 21.8%, for the three months ended March 31, 2026 as compared to the same period in 2025. In local currency, net sales increased 4.8% for the three months ended March 31, 2026 as compared to the same period in 2025. The fluctuation of foreign currency exchange rates had a favorable impact of $21.5 million on net sales for the three months ended March 31, 2026. Mexico’s sales volume decreased 1.1% for the three months ended March 31, 2026 as compared to the same period in 2025. We believe recent localized initiatives, new product launches, and other promotional efforts have provided additional support for members and Members’ Nutrition Club operations, which continue to be an important DMO in the market. While we believe macroeconomic conditions, such as prolonged high interest rates are stabilizing, these continue to create challenges for certain of our Members’ and Members’ Nutrition Club operations. The market saw a 3.7% price increase during February 2026 and smaller price increases on certain products during January 2026. The market saw a 4.2% price increase during February 2025.

Previous 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.

Current wording

Across several other markets, net sales increased and were greatest for Peru for the three months ended March 31, 2026, compared to the same period in 2025. The majority of markets in the region instituted price increases to address market-specific conditions during the first quarter of 2026 and 2025. We believe local 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 three months ended March 31, 2026 and 2025.

Previous 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.

Current wording

Certain markets in the region continue to see difficult economic conditions, including political and social instability. Inflationary pressures are 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 $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.

Current wording

The EMEA region reported net sales of $274.8 million for the three months ended March 31, 2026. Net sales increased $1.5 million, or 0.5%, for the three months ended March 31, 2026 as compared to the same period in 2025. In local currency, net sales decreased 6.5% for the three months ended March 31, 2026 as compared to the same period in 2025. The 0.5% increase in net sales for the three months ended March 31, 2026 was primarily due to a 7.0% favorable impact of fluctuations in foreign currency exchange rates and a 4.9% favorable impact of price increases, partially offset by a 10.9% decrease in sales volume. EMEA region’s sales volume decreased for the three months ended March 31, 2026 as compared to the same period in 2025, and the decrease was more than the prior year period decrease. 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 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.

Current wording

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 three months ended March 31, 2026, as compared to the same period in 2025. The net sales increase for the three months ended March 31, 2026 as compared to the same period in 2025, was primarily driven by increases in net sales in Kazakhstan, partially offset by declines occurring in Germany, Belgium, and Spain. Our Russia entity had no sales during the three months ended March 31, 2026 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 are purchasing products from Kazakhstan, among other neighboring markets.

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 nine months ended September 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 three months ended March 31, 2026 and 2025.

Previous 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.

Current wording

The Asia Pacific region, which excludes China, reported net sales of $495.8 million for the three months ended March 31, 2026. Net sales increased $73.3 million, or 17.3%, for the three months ended March 31, 2026 as compared to the same period in 2025. In local currency, net sales increased 20.8% for the three months ended March 31, 2026 as compared to the same period in 2025. The 17.3% increase in net sales for the three months ended March 31, 2026 was primarily due to a 22.1% increase in sales volume and a 1.2% favorable impact of price increases, partially offset by a 3.5% unfavorable impact of fluctuations in foreign currency exchange rates and a 2.5% unfavorable impact of sales mix. The Asia Pacific region saw a sales volume increase for the three months ended March 31, 2026, compared to the same period in 2025, after having a decrease for the three months ended March 31, 2025.

Previous 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.

Current wording

Net sales in India were $275.4 million for the three months ended March 31, 2026. Net sales increased $66.1 million, or 31.6%, for the three months ended March 31, 2026 as compared to the same period in 2025. In local currency, net sales increased 39.0% for the three months ended March 31, 2026 as compared to the same period in 2025. The fluctuation of foreign currency exchange rates had an unfavorable impact of $15.5 million on net sales for the three months ended March 31, 2026. The sales volume in India increased 36.9% for the three months ended March 31, 2026, as compared to the same period in 2025. Our growth rate in the India market for the three months ended March 31, 2026 was more than the growth rate experienced during the same period in 2025. 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. We believe the continued impact of this GST rate reduction may have contributed to higher net sales and growth in the India market during the three months ended March 31, 2026 as compared to the same period in 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 three months ended March 31, 2026 and twelve months ended December 31, 2025.

Previous 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.

Current wording

Net sales in Vietnam were $77.5 million for the three months ended March 31, 2026. Net sales increased $2.1 million, or 2.8%, for the three months ended March 31, 2026 as compared to the same period in 2025. In local currency, net sales increased 5.7% for the three months ended March 31, 2026, as compared to the same period in 2025. The fluctuation of foreign currency exchange rates had an unfavorable impact of $2.3 million on net sales for the three months ended March 31, 2026. The sales volume in Vietnam increased 3.3% for the three months ended March 31, 2026 as compared to the same period in 2025. 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 both March 2026 and March 2025.

Previous 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.

Current wording

Across several other markets, net sales increased for the three months ended March 31, 2026 as compared to the same period in 2025, with the greatest increases in Malaysia, Taiwan, and South Korea. 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, 2026 and 2025.

Previous 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.

Current wording

The China region reported net sales of $57.0 million for the three months ended March 31, 2026. Net sales decreased $7.8 million, or 12.0%, for the three months ended March 31, 2026, as compared to the same period in 2025. In local currency, net sales decreased 16.2% for the three months ended March 31, 2026 as compared to the same period in 2025. The 12.0% decrease in net sales for the three months ended March 31, 2026 was primarily due to a 17.6% decrease in sales volume, partially offset by a 4.2% favorable impact of fluctuations in foreign currency exchange rates and a 1.4% favorable impact of sales mix. China’s sales volume decreased for the three months ended March 31, 2026 as compared to the same period in 2025, and the decrease was more than the prior year period decrease. The China region had no price increase during the three months ended March 31, 2026 and 2025.

Previous 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.

Current wording

Gross profit was $1,026.1 million and $956.5 million for the three months ended March 31, 2026 and 2025, respectively. Gross profit as a percentage of net sales was 77.9% and 78.3% for the three months ended March 31, 2026 and 2025, respectively, or an unfavorable net decrease of 39 basis points.

Previous 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.

Current wording

The decrease in gross profit as a percentage of net sales for the three months ended March 31, 2026 as compared to the same period in 2025 included unfavorable cost changes related to self-manufacturing and sourcing of 53 basis points primarily related to increased allocated overhead costs; the unfavorable impact of foreign currency fluctuations of 50 basis points; unfavorable changes in sales mix of 28 basis points; and unfavorable other cost changes of 22 basis points; partially offset by the favorable impact of price increases of 71 basis points; and the favorable impact of lower inventory write-downs of 43 basis points.

Previous 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.

Current wording

The decrease in selling expenses as a percentage of net sales for the three months ended March 31, 2026 as compared to the same period in 2025 was primarily due to favorable changes in mix of products and countries. Generally, selling expenses as a percentage of net sales may vary from period to period due to changes in the mix of products and countries.

Previous 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.

Current wording

General and administrative expenses were $431.4 million and $400.3 million for the three months ended March 31, 2026 and 2025, respectively. General and administrative expenses as a percentage of net sales was 32.8% for both the three months ended March 31, 2026 and 2025.

Previous 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.

Current wording

The $31.1 million increase in general and administrative expenses for the three months ended March 31, 2026 as compared to the same period in 2025 was primarily driven by $17.7 million in higher labor and benefits costs and $8.0 million in higher non-income tax expenses mainly from higher India GST expenses.

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 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.

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 March 31, 2025.

Previous 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).

Current wording

The decrease in interest expense, net for the three months ended March 31, 2026 as compared to the same period in 2025 was primarily due to 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 $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.

Current wording

Income taxes were $30.4 million and $20.4 million for the three months ended March 31, 2026 and 2025, respectively. The effective income tax rate was 33.2% and 28.8% for the three months ended March 31, 2026 and 2025, respectively. The increase in the effective tax rate for the three months ended March 31, 2026, as compared to the same period in 2025, was primarily due to a decrease in tax benefits from discrete events and 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 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.

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 three months ended March 31, 2026, 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 $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.

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 $451.2 million cash and cash equivalents as of March 31, 2026 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 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.

Current wording

For the three months ended March 31, 2026, we generated $113.8 million of operating cash flow as compared to $0.2 million of operating cash flow generated for the same period in 2025. The increase in our operating cash flow was the result of $99.0 million of favorable changes in operating assets and liabilities and $14.6 million of higher net income excluding non-cash and reconciling items disclosed within our condensed consolidated statement of cash flows. The $99.0 million of favorable changes in operating assets and liabilities was primarily the result of favorable changes in other current liabilities and inventories; partially offset by an unfavorable change in accounts payable. The favorable change in other current liabilities is mainly driven by the timing of employee bonus payments which were paid in the second quarter in 2026, while in 2025, the employee bonus payments were made in the first quarter. The $14.6 million of higher net income excluding non-cash and reconciling items was primarily driven by higher gross profit driven by higher net sales, partially offset by higher selling expenses, and general and administrative expenses (See Summary Financial Results above for further discussion).

Previous wording

In March 2025, we hosted our annual global honors event where sales leaders from around the world met, shared best practices, and conducted leadership training, and our management awarded Members $74.3 million of Mark Hughes bonus payments related to their 2024 performance. In March 2024, our management awarded Members $74.9 million of Mark Hughes bonus payments related to their 2023 performance.

Current wording

In March 2026, we hosted our annual global honors event where sales leaders from around the world met, shared best practices, and conducted leadership training, and our management awarded Members $74.8 million of Mark Hughes bonus payments related to their 2025 performance. In March 2025, our management awarded Members $74.3 million of Mark Hughes bonus payments related to their 2024 performance.