HERBALIFE LTD.

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, 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.

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, 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

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.

Current wording

Our“selling expenses”primarily consist 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

Net loss attributable to Herbalife was $26.3 million, or $0.25 per diluted share, and net income attributable to Herbalife was $35.6 million, or $0.33 per diluted share, for the three and six months ended June 30, 2026, respectively. Net income attributable to Herbalife decreased $75.6 million, or 153.3%, and $64.1 million, or 64.3%, for the three and six months ended June 30, 2026, respectively, as compared to the same periods in 2025. The decrease in net income attributable to Herbalife for the three months ended June 30, 2026 was mainly due to $94.6 million of loss on extinguishment of debt related to our April 2026 debt refinancing, $27.7 million higher general and administrative expenses driven by higher labor and benefits costs and higher non-income tax expenses mainly from India GST (see General and Administrative Expenses below for further discussion), $20.1 million higher selling expenses driven by higher net sales, and $7.0 million higher income taxes; partially offset by $48.3 million higher gross profit driven by higher net sales, and $16.2 million lower interest expense, net, partially as a result of our April 2026 debt refinancing. The decrease in net income attributable to Herbalife for the six months ended June 30, 2026 was mainly due to $94.6 million of loss on extinguishment of debt related to our April 2026 debt refinancing, $58.8 million higher general and administrative expenses driven by higher labor and benefits costs, and higher non-income tax expenses mainly from India GST (see General and Administrative Expenses below for further discussion), and $48.5 million higher selling expenses driven by higher net sales; partially offset by $117.9 million higher gross profit driven by higher net sales, and $21.4 million lower interest expense, net, partially as a result of our April 2026 debt refinancing.

Current wording

Net income attributable to Herbalife was $58.8 million, or $0.55 per diluted share, and $94.4 million, or $0.88 per diluted share, for the three and nine months ended September 30, 2026, respectively. Net income attributable to Herbalife increased $15.6 million, or 36.1%, and decreased $48.5 million, or 33.9%, for the three and nine months ended September 30, 2026, respectively, as compared to the same periods in 2025. The increase in net income attributable to Herbalife for the three months ended September 30, 2026 was mainly due to $54.6 million higher gross profit driven by higher net sales and $19.1 million lower interest expense, net, as a result of our April 2026 debt refinancing; partially offset by $22.8 million higher selling expenses driven by higher net sales, $19.1 million higher general and administrative expenses driven by higher labor and benefits costs and higher non-income tax expenses mainly from India GST (see General and Administrative Expenses below for further discussion), and $17.8 million higher income taxes. The decrease in net income attributable to Herbalife for the nine months ended September 30, 2026 was mainly due to $94.6 million of loss on extinguishment of debt related to our April 2026 debt refinancing, $77.9 million higher general and administrative expenses driven by higher labor and benefits costs and higher non-income tax expenses mainly from India GST (see General and Administrative Expenses below for further discussion), $71.3 million higher selling expenses driven by higher net sales, and $20.8 million of higher income taxes; partially offset by $172.5 million higher gross profit driven by higher net sales and $40.5 million lower interest expense, net, as a result of our April 2026 debt refinancing.

Previous wording

Net income attributable to Herbalife for the six months ended June 30, 2026 included a $94.6 million pre-tax unfavorable impact ($74.6 million post-tax) of loss on debt extinguishment from our April 2026 debt refinancing, $8.7 million favorable deferred income tax impacts relating to the changes in the Company’s corporate entity structure in 2024, a $3.5 million pre-tax unfavorable impact ($2.4 million post-tax) of Technology Realignment Program expenses, primarily relating to employee retention and separation costs and a $1.3 million pre-tax unfavorable impact ($0.9 million post-tax) of Optimization Program expenses.

Current wording

Net income attributable to Herbalife for the three months ended September 30, 2026 included $4.1 million favorable deferred income tax impacts relating to the changes in the Company’s corporate entity structure in 2024, a $5.6 million pre-tax unfavorable impact ($3.9 million post-tax) of Optimization Program expenses, a $1.2 million pre-tax unfavorable impact ($0.9 million post-tax) related to Russia-Ukraine conflict charges, and a $0.8 million pre-tax unfavorable impact ($0.9 million post-tax) of Technology Realignment Program expenses, primarily relating to employee retention and separation costs.

Previous wording

Net loss attributable to Herbalife for the three months ended June 30, 2026 included a $94.6 million pre-tax unfavorable impact ($74.6 million post-tax) of loss on debt extinguishment from our April 2026 debt refinancing, $3.3 million favorable deferred income tax impacts relating to the changes in the Company’s corporate entity structure in 2024, a $1.3 million pre-tax unfavorable impact ($0.9 million post-tax) of Optimization Program expenses, and a $1.1 million pre-tax unfavorable impact ($0.7 million post-tax) of Technology Realignment Program expenses, primarily relating to employee retention and separation costs.

Current wording

Net income attributable to Herbalife for the nine months ended September 30, 2026 included a $94.6 million pre-tax unfavorable impact ($74.6 million post-tax) of loss on debt extinguishment from our April 2026 debt refinancing, $12.8 million favorable deferred income tax impacts relating to the changes in the Company’s corporate entity structure in 2024, a $6.9 million pre-tax unfavorable impact ($4.8 million post-tax) of Optimization Program expenses, a $4.3 million pre-tax unfavorable impact ($3.3 million post-tax) of Technology Realignment Program expenses, primarily relating to employee retention and separation costs, and a $1.2 million pre-tax unfavorable impact ($0.9 million post-tax) related to Russia-Ukraine conflict charges.

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

The Primary Reporting Segment reported net sales of $1,266.4 million and $2,526.6 million for the three and six months ended June 30, 2026, respectively, representing an increase of $87.3 million, or 7.4%, and $190.6 million, or 8.2%, respectively, as compared to the same periods in 2025. In local currency, net sales increased 8.2% and 7.4% for the three and six months ended June 30, 2026, respectively, as compared to the same periods in 2025. The 7.4% increase in net sales for the three months ended June 30, 2026 was primarily due to a 7.3% increase in sales volume and a 3.2% favorable impact of price increases, partially offset by a 2.3% unfavorable impact of sales mix and a 0.8% unfavorable impact of fluctuations in foreign currency exchange rates. The 8.2% increase in net sales for the six months ended June 30, 2026 was primarily due to a 6.1% increase in sales volume, a 3.3% favorable impact of price increases, and a 0.8% favorable impact of fluctuations in foreign currency exchange rates, partially offset by a 2.0% unfavorable impact of sales mix.

Current wording

The Primary Reporting Segment reported net sales of $1,294.6 million and $3,821.2 million for the three and nine months ended September 30, 2026, respectively, representing an increase of $92.2 million, or 7.7%, and $282.8 million, or 8.0%, respectively, as compared to the same periods in 2025. In local currency, net sales increased 9.7% and 8.2% for the three and nine months ended September 30, 2026, respectively, as compared to the same periods in 2025. The 7.7% increase in net sales for the three months ended September 30, 2026 was primarily due to a 9.9% increase in sales volume and a 3.0% favorable impact of price increases, partially offset by a 3.2% unfavorable impact of sales mix and a 2.0% unfavorable impact of fluctuations in foreign currency exchange rates. The 8.0% increase in net sales for the nine months ended September 30, 2026 was primarily due to a 7.4% increase in sales volume and a 3.2% favorable impact of price increases, partially offset by a 2.4% unfavorable impact of sales mix.

Previous wording

For a discussion of China’s net sales for the three and six months ended June 30, 2026 as compared to the same periods in 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, 2026 as compared to the same periods in 2025, see the China section of Sales by Geographic Region below.

Previous wording

The Primary Reporting Segment reported contribution margin of $543.3 million, or 42.9% of net sales, and $1,087.2 million, or 43.0% of net sales for the three and six months ended June 30, 2026, respectively, representing an increase of $35.6 million, or 7.0%, and $79.7 million, or 7.9%, respectively, as compared to the same periods in 2025. The 7.0% increase in contribution margin for the three months ended June 30, 2026 was primarily the result of a 7.3% favorable impact of sales volume increases and a 5.2% favorable impact of price increases, partially offset by a 3.5% unfavorable impact of sales mix and a 1.1% unfavorable impact of foreign currency fluctuations. The 7.9% increase in contribution margin for the six months ended June 30, 2026 was primarily the result of a 6.1% favorable impact of sales volume increases and a 5.3% favorable impact of price increases, partially offset by a 3.0% unfavorable impact of sales mix.

Current wording

The Primary Reporting Segment reported contribution margin of $550.2 million, or 42.5% of net sales, and $1,637.4 million, or 42.9% of net sales for the three and nine months ended September 30, 2026, respectively, representing an increase of $39.6 million, or 7.8%, and $119.3 million, or 7.9%, respectively, as compared to the same periods in 2025. The 7.8% increase in contribution margin for the three months ended September 30, 2026 was primarily the result of a 9.9% favorable impact of sales volume increases and a 4.9% favorable impact of price increases, partially offset by a 4.9% unfavorable impact of sales mix and a 1.8% unfavorable impact of foreign currency fluctuations. The 7.9% increase in contribution margin for the nine months ended September 30, 2026 was primarily the result of a 7.4% favorable impact of sales volume increases and a 5.2% favorable impact of price increases, partially offset by a 3.7% unfavorable impact of sales mix, a 0.8% unfavorable impact of cost changes related to self-manufacturing and sourcing, and a 0.7% unfavorable impact of foreign currency fluctuations.

Previous wording

China reported contribution margin of $21.2 million and $41.6 million for the three and six months ended June 30, 2026, respectively, representing a decrease of $7.4 million, or 25.9%, and of $10.3 million, or 19.8%, for the three and six months ended June 30, 2026, respectively, as compared to the same periods in 2025. The 25.9% decrease in contribution margin for the three months ended June 30, 2026 was primarily the result of a 28.7% unfavorable impact of sales volume decreases, and a 2.3% unfavorable impact of cost changes related to self-manufacturing and sourcing, partially offset by a 7.7% favorable impact of foreign currency fluctuations. The 19.8% decrease in contribution margin for the six months ended June 30, 2026 was primarily the result of a 23.7% unfavorable impact of sales volume decreases, and a 1.7% unfavorable impact of cost changes related to self-manufacturing and sourcing, partially offset by an 8.0% favorable impact of foreign currency fluctuations.

Current wording

China reported contribution margin of $20.4 million and $62.0 million for the three and nine months ended September 30, 2026, respectively, representing a decrease of $7.8 million, or 27.7%, and of $18.1 million, or 22.6%, for the three and nine months ended September 30, 2026, respectively, as compared to the same periods in 2025. The 27.7% decrease in contribution margin for the three months ended September 30, 2026 was primarily the result of a 25.9% unfavorable impact of sales volume decreases and a 4.3% unfavorable impact of cost changes related to self-manufacturing and sourcing, partially offset by a 4.2% favorable impact of foreign currency fluctuations. The 22.6% decrease in contribution margin for the nine months ended September 30, 2026 was primarily the result of a 24.4% unfavorable impact of sales volume decreases and a 2.0% unfavorable impact of cost changes related to self-manufacturing and sourcing, partially offset by a 4.2% favorable impact of foreign currency fluctuations and a 1.4% favorable impact of lower inventory write-downs.

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 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 include 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 six months ended June 30, 2026, as compared to the same periods 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.

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, 2026, as compared to the same periods 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 $266.3 million and $507.6 million for the three and six months ended June 30, 2026, respectively. Net sales increased $1.0 million, or 0.4%, and decreased $5.4 million, or 1.1%, for the three and six months ended June 30, 2026, respectively, as compared to the same periods in 2025.

Current wording

Net sales in the U.S. were $261.8 million and $769.4 million for the three and nine months ended September 30, 2026, respectively. Net sales increased $5.4 million, or 2.1%, and were flat, for the three and nine months ended September 30, 2026, respectively, as compared to the same periods in 2025.

Previous wording

Net sales in Mexico were $161.0 million and $315.1 million for the three and six months ended June 30, 2026, respectively. Net sales increased $23.8 million, or 17.3%, and $51.4 million, or 19.5%, for the three and six months ended June 30, 2026, respectively, as compared to the same periods in 2025. In local currency, net sales increased 4.7% and 4.7% for the three and six months ended June 30, 2026, respectively, as compared to the same periods in 2025. The fluctuation of foreign currency exchange rates had a favorable impact of $17.5 million and $39.0 million on net sales for the three and six months ended June 30, 2026, respectively. Mexico’s sales volume was flat for the three and six months ended June 30, 2026, as compared to the same periods 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. 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.

Current wording

Net sales in Mexico were $160.3 million and $475.4 million for the three and nine months ended September 30, 2026, respectively. Net sales increased $13.5 million, or 9.2%, and $64.9 million, or 15.8%, for the three and nine months ended September 30, 2026, respectively, as compared to the same periods in 2025. In local currency, net sales increased 1.1% and 3.4% for the three and nine months ended September 30, 2026, respectively, as compared to the same periods in 2025. The fluctuation of foreign currency exchange rates had a favorable impact of $11.9 million and $50.8 million on net sales for the three and nine months ended September 30, 2026, respectively. The sales volume in Mexico decreased 2.5% and 1.2% for the three and nine months ended September 30, 2026, respectively, as compared to the same periods 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. 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 several other markets, net sales increased and were greatest for Peru and Colombia for the three and six months ended June 30, 2026, compared to the same periods in 2025. The majority of markets in the region instituted price increases to address market-specific conditions during the first half 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 six months ended June 30, 2026.

Current wording

Across several other markets, net sales increased and were greatest for Peru and Colombia for the three and nine months ended September 30, 2026, compared to the same periods in 2025. The majority of markets in the region instituted price increases to address market-specific conditions during the nine months ended September 30, 2026 and 2025. We also continue to support the region through in-person activities, adding programs, and supporting Nutrition Clubs on a market-by-market basis.

Previous 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.

Current wording

Certain markets in the region continue to see difficult economic conditions, including political and social instability. Inflationary pressures are improving but remain elevated, and foreign exchange rate fluctuations in certain markets in the region have challenged our Members’ operations and customer demand.

Previous wording

The EMEA region reported net sales of $277.8 million and $552.6 million for the three and six months ended June 30, 2026, respectively. Net sales decreased $10.1 million, or 3.5%, and $8.6 million, or 1.5%, for the three and six months ended June 30, 2026, respectively, as compared to the same periods in 2025. In local currency, net sales decreased 5.6% and 6.0% for the three and six months ended June 30, 2026, respectively, as compared to the same periods in 2025. The 3.5% decrease in net sales for the three months ended June 30, 2026 was primarily due to a 12.1% decrease in sales volume, partially offset by a 5.3% favorable impact of price increases, a 2.1% favorable impact of fluctuations in foreign currency exchange rates, and a 1.2% favorable impact of sales mix. The 1.5% decrease in net sales for the six months ended June 30, 2026 was primarily due to a 11.5% decrease in sales volume, partially offset by a 5.1% favorable impact of price increases and a 4.5% favorable impact of fluctuations in foreign currency exchange rates. EMEA region’s sales volume decreased for the three and six months ended June 30, 2026 as compared to the same periods in 2025, and the decreases were more 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 $259.0 million and $811.6 million for the three and nine months ended September 30, 2026, respectively. Net sales decreased $13.3 million, or 4.9%, and $21.9 million, or 2.6%, for the three and nine months ended September 30, 2026, respectively, as compared to the same periods in 2025. In local currency, net sales decreased 5.2% and 5.8% for the three and nine months ended September 30, 2026, respectively, as compared to the same periods in 2025. The 4.9% decrease in net sales for the three months ended September 30, 2026 was primarily due to a 10.2% decrease in sales volume, partially offset by a 5.1% favorable impact of price increases and a 0.3% favorable impact of fluctuations in foreign currency exchange rates. The 2.6% decrease in net sales for the nine months ended September 30, 2026 was primarily due to an 11.1% decrease in sales volume, partially offset by a 5.0% favorable impact of price increases, a 3.2% favorable impact of fluctuations in foreign currency exchange rates, and a 0.3% favorable impact of sales mix. EMEA region’s sales volume decreased for the three and nine months ended September 30, 2026 as compared to the same periods in 2025, and the decreases were more 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

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 2026, as compared to the same periods in 2025. The net sales decrease for the three months ended June 30, 2026 as compared to the same period in 2025, was primarily driven by decreases in net sales in Italy and Germany and the net sales decrease for the six months ended June 30, 2026 as compared to the same period in 2025, was primarily driven by decreases in net sales in Germany and Spain. These decreases in net sales for the three and six months ended June 30, 2026, as compared to the same periods in 2025, were partially offset by increased purchases by Russian Members through Kazakhstan, resulting in increases in net sales for Kazakhstan.

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 and nine months ended September 30, 2026, as compared to the same periods in 2025. The net sales decreases for the three and nine months ended September 30, 2026 as compared to the same periods in 2025, were primarily driven by decreases in net sales in Germany, Italy, Spain, and United Kingdom. These decreases in net sales for the nine months ended September 30, 2026, as compared to the same periods in 2025, were partially offset by increased purchases by Russian Members through Kazakhstan, resulting in increases in net sales for Kazakhstan.

Previous wording

Focus areas for Herbalife and our Members in the region include promotions and events, simplification of the marketing plan, launching new products, enhancing both online and in person training programs and meetings to help distributors improve their business, supporting Members' Nutrition clubs and other DMOs, and other promotional activities in order to grow our sales in the region. During the second quarter of 2026, we launched Bioniq, our next generation of personalized products in certain markets within the region, including a subscription-based offering. The launch did not have a direct material impact to our net sales during the period. The majority of the markets in the region instituted price increases to address market-specific conditions during the six months ended June 30, 2026 and 2025.

Current wording

Focus areas for Herbalife and our Members in the region include promotions and events, simplification of the marketing plan, launching new products, enhancing both online and in person training programs and meetings to help distributors improve their business, supporting Members' Nutrition clubs and other DMOs, and other promotional activities in order to grow our sales in the region. During the second quarter of 2026, we launched Bioniq, our next generation of personalized products in certain markets within the region, including a subscription-based offering. The launch did not have a direct material impact to our net sales during the three and nine months ended September 30, 2026. The majority of the markets in the region instituted price increases to address market-specific conditions during the nine months ended September 30, 2026 and 2025.

Previous wording

Net sales in India were $270.6 million and $546.0 million for the three and six months ended June 30, 2026, respectively. Net sales increased $67.0 million, or 32.9%, and $133.1 million, or 32.2% for the three and six months ended June 30, 2026 as compared to the same periods in 2025. In local currency, net sales increased 47.0% and 42.9% for the three and six months ended June 30, 2026 as compared to the same periods in 2025, respectively. The fluctuation of foreign currency exchange rates had an unfavorable impact of $28.6 million and $44.1 million on net sales for the three and six months ended June 30, 2026, respectively. The sales volume in India increased 45.1% and 40.9% for the three and six months ended June 30, 2026, respectively, as compared to the same periods in 2025. India’s sales volume increased for the second quarter of 2026, after having a decrease for the same period in 2025 and the sales volume increase in the India market for the first half of 2026 was more than the sales volume increase 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 and six months ended June 30, 2026 as compared to the same periods in 2025. We continue to promote our brand, such as through launching new products, sports sponsorships, and in-person events. The India market had no price increase during the six months ended June 30, 2026 and twelve months ended December 31, 2025.

Current wording

Net sales in India were $313.5 million and $859.5 million for the three and nine months ended September 30, 2026, respectively. Net sales increased $87.1 million, or 38.5%, and $220.2 million, or 34.4% for the three and nine months ended September 30, 2026 as compared to the same periods in 2025. In local currency, net sales increased 51.6% and 46.0% for the three and nine months ended September 30, 2026 as compared to the same periods in 2025, respectively. The fluctuation of foreign currency exchange rates had an unfavorable impact of $29.7 million and $73.8 million on net sales for the three and nine months ended September 30, 2026, respectively. The sales volume in India increased 49.4% and 44.0% for the three and nine months ended September 30, 2026, respectively, as compared to the same periods in 2025. India’s sales volume increased for the three and nine months ended September 30, 2026, and were more than the sales volume increases experienced during the same periods 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 and nine months ended September 30, 2026 as compared to the same periods in 2025. We continue to promote our brand, such as through launching new products, sports sponsorships, and in-person events. The India market had no price increase during the nine months ended September 30, 2026 and twelve months ended December 31, 2025.

Previous wording

Net sales in Vietnam were $64.6 million and $142.1 million for the three and six months ended June 30, 2026, respectively. Net sales increased $4.4 million, or 7.3%, and $6.5 million, or 4.8%, for the three and six months ended June 30, 2026, respectively, as compared to the same periods in 2025. In local currency, net sales increased 8.9% and 7.1% for the three and six months ended June 30, 2026, respectively, as compared to the same periods in 2025. The fluctuation of foreign currency exchange rates had an unfavorable impact of $1.0 million and $3.2 million on net sales for the three and six months ended June 30, 2026, respectively. The sales volume in Vietnam increased 6.1% and 4.5% for the three and six months ended June 30, 2026, respectively, as compared to the same periods in 2025. Further changes to Vietnam's direct-selling regulations became effective on July 1, 2026. While certain provisions required immediate compliance, most provisions do not require compliance and implementation until July 1, 2027. We continue to assess the implementation and interpretation of these regulations and monitor their potential impact on our business in Vietnam. 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. The market implemented a 2.5% price increase in both March 2026 and March 2025.

Current wording

Net sales in Vietnam were $75.5 million and $217.6 million for the three and nine months ended September 30, 2026, respectively. Net sales increased $4.0 million, or 5.6%, and $10.5 million, or 5.1%, for the three and nine months ended September 30, 2026, respectively, as compared to the same periods in 2025. In local currency, net sales increased 5.3% and 6.5% for the three and nine months ended September 30, 2026, respectively, as compared to the same periods in 2025. The fluctuation of foreign currency exchange rates had a favorable impact of $0.3 million and unfavorable impact of $2.9 million on net sales for the three and nine months ended September 30, 2026, respectively. The sales volume in Vietnam increased 2.5% and 3.8% for the three and nine months ended September 30, 2026, respectively, as compared to the same periods in 2025. Further changes to Vietnam's direct-selling regulations became effective on July 1, 2026. While certain provisions required immediate compliance, most provisions do not require compliance and implementation until July 1, 2027. We continue to assess the implementation and interpretation of these regulations and monitor their potential impact on our business in Vietnam. 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. The market implemented a 2.5% price increase in both March 2026 and March 2025.

Previous wording

Across several other markets, net sales decreased for the three months ended June 30, 2026 as compared to the same period in 2025, with the greatest decreases in South Korea and Hong Kong, and net sales also decreased for the six months ended June 30, 2026 as compared to the same period in 2025, with the greatest decreases in South Korea and Hong Kong, partially offset by increases in Malaysia and Taiwan. In addition, macroeconomic conditions across the region improved as inflationary pressures in certain markets generally moderated. 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, 2026 and 2025.

Current wording

Across several other markets, net sales decreased for the three months ended September 30, 2026 as compared to the same period in 2025, with the greatest decreases in Taiwan and South Korea, and net sales also decreased for the nine months ended September 30, 2026 as compared to the same period in 2025, with the greatest decreases in South Korea and Hong Kong, partially offset by increases in Malaysia. In addition, macroeconomic conditions across the region improved as inflationary pressures in certain markets generally moderated. 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, 2026 and 2025.

Previous wording

The China region reported net sales of $60.4 million and $117.4 million for the three and six months ended June 30, 2026, respectively. Net sales decreased $19.6 million, or 24.5%, and $27.4 million, or 18.9%, for the three and six months ended June 30, 2026, respectively, as compared to the same periods in 2025. In local currency, net sales decreased 29.0% and 23.3% for the three and six months ended June 30, 2026, respectively, as compared to the same periods in 2025. The 24.5% decrease in net sales for the three months ended June 30, 2026 was primarily due to a 28.7% decrease in sales volume, partially offset by a 4.5% favorable impact of fluctuations in foreign currency exchange rates. The 18.9% decrease in net sales for the six months ended June 30, 2026 was primarily due to a 23.7% decrease in sales volume, partially offset by a 4.4% favorable impact of fluctuations in foreign currency exchange rates. China’s sales volume decreased for the three and six months ended June 30, 2026 as compared to the same periods in 2025, and the decreases were more than the prior year period decreases. The China region had no price increase during the six months ended June 30, 2026 and 2025.

Current wording

The China region reported net sales of $55.6 million and $173.0 million for the three and nine months ended September 30, 2026, respectively. Net sales decreased $15.7 million, or 22.0%, and $43.1 million, or 19.9%, for the three and nine months ended September 30, 2026, respectively, as compared to the same periods in 2025. In local currency, net sales decreased 26.4% and 24.3% for the three and nine months ended September 30, 2026, respectively, as compared to the same periods in 2025. The 22.0% decrease in net sales for the three months ended September 30, 2026 was primarily due to a 25.9% decrease in sales volume, partially offset by a 4.4% favorable impact of fluctuations in foreign currency exchange rates. The 19.9% decrease in net sales for the nine months ended September 30, 2026 was primarily due to a 24.4% decrease in sales volume, partially offset by a 4.4% favorable impact of fluctuations in foreign currency exchange rates. China’s sales volume decreased for the three and nine months ended September 30, 2026 as compared to the same periods in 2025, and the decreases were more than the prior year period decreases. The China region had no price increase during the nine months ended September 30, 2026 and 2025.

Previous wording

Gross profit was $1,030.5 million and $982.2 million for the three months ended June 30, 2026 and 2025, respectively, and $2,056.6 million and $1,938.7 million for the six months ended June 30, 2026 and 2025, respectively. Gross profit as a percentage of net sales was 77.7% and 78.0% for the three months ended June 30, 2026 and 2025, respectively, or an unfavorable net decrease of 34 basis points, and 77.8% and 78.1% for the six months ended June 30, 2026 and 2025, respectively, or an unfavorable net decrease of 36 basis points.

Current wording

Gross profit was $1,044.1 million and $989.5 million for the three months ended September 30, 2026 and 2025, respectively, and $3,100.7 million and $2,928.2 million for the nine months ended September 30, 2026 and 2025, respectively. Gross profit as a percentage of net sales was 77.3% and 77.7% for the three months ended September 30, 2026 and 2025, respectively, or an unfavorable net decrease of 36 basis points, and 77.6% and 78.0% for the nine months ended September 30, 2026 and 2025, respectively, or an unfavorable net decrease of 36 basis points.

Previous wording

The decrease in gross profit as a percentage of net sales for the three months ended June 30, 2026 as compared to the same period in 2025 included unfavorable changes in sales mix of 47 basis points; unfavorable other cost changes of 22 basis points; the unfavorable impact of higher inventory write-downs of 20 basis points; and unfavorable cost changes related to self-manufacturing and sourcing of 9 basis points primarily related to increased allocated overhead costs; partially offset by the favorable impact of price increases of 64 basis points.

Current wording

The decrease in gross profit as a percentage of net sales for the three months ended September 30, 2026 as compared to the same period in 2025 included unfavorable changes in sales mix of 44 basis points; unfavorable cost changes related to self-manufacturing and sourcing of 36 basis points; and unfavorable other cost changes of 26 basis points; partially offset by the favorable impact of price increases of 61 basis points; and the favorable impact of foreign currency fluctuations of 9 basis points.

Previous wording

The decrease in gross profit as a percentage of net sales for the six months ended June 30, 2026 as compared to the same period in 2025 included unfavorable changes in sales mix of 37 basis points; unfavorable cost changes related to self-manufacturing and sourcing of 31 basis points; the unfavorable impact of foreign currency fluctuations of 25 basis points; and unfavorable other cost changes of 21 basis points; partially offset by the favorable impact of price increases of 67 basis points; and the favorable impact of lower inventory write-downs of 11 basis points.

Current wording

The decrease in gross profit as a percentage of net sales for the nine months ended September 30, 2026 as compared to the same period in 2025 included unfavorable changes in sales mix of 46 basis points; unfavorable cost changes related to self-manufacturing and sourcing of 33 basis points; the unfavorable impact of foreign currency fluctuations of 17 basis points; and unfavorable other cost changes of 14 basis points; partially offset by the favorable impact of price increases of 66 basis points; and the favorable impact of lower inventory write-downs of 8 basis points.

Previous wording

Our future gross profit as a percentage of net sales could be negatively impacted if our raw materials and freight costs were to increase as a result of the war and conflict in the Middle East.

Current wording

Our future gross profit as a percentage of net sales could be negatively impacted if our raw materials and freight costs were to increase, including as a result of the war and conflict in the Middle East.

Previous wording

Selling expenses were $466.0 million and $445.9 million for the three months ended June 30, 2026 and 2025, respectively, and $927.8 million and $879.3 million for the six months ended June 30, 2026 and 2025, respectively. Selling expenses as a percentage of net sales were 35.1% and 35.4% for the three months ended June 30, 2026 and 2025, respectively, and 35.1% and 35.4% for the six months ended June 30, 2026 and 2025, respectively.

Current wording

Selling expenses were $473.5 million and $450.7 million for the three months ended September 30, 2026 and 2025, respectively, and $1,401.3 million and $1,330.0 million for the nine months ended September 30, 2026 and 2025, respectively. Selling expenses as a percentage of net sales were 35.0% and 35.4% for the three months ended September 30, 2026 and 2025, respectively, and 35.1% and 35.4% for the nine months ended September 30, 2026 and 2025, respectively.

Previous wording

The decrease in selling expenses as a percentage of net sales for both the three and six months ended June 30, 2026 as compared to the same periods 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.

Current wording

The decrease in selling expenses as a percentage of net sales for both the three and nine months ended September 30, 2026 as compared to the same periods 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

General and administrative expenses were $436.2 million and $408.5 million for the three months ended June 30, 2026 and 2025, respectively, and $867.6 million and $808.8 million for the six months ended June 30, 2026 and 2025, respectively. General and administrative expenses as a percentage of net sales was 32.9% and 32.5% for the three months ended June 30, 2026 and 2025, respectively, and 32.8% and 32.6% for the six months ended June 30, 2026 and 2025, respectively.

Current wording

General and administrative expenses were $432.1 million and $413.0 million for the three months ended September 30, 2026 and 2025, respectively, and $1,299.7 million and $1,221.8 million for the nine months ended September 30, 2026 and 2025, respectively. General and administrative expenses as a percentage of net sales was 32.0% and 32.4% for the three months ended September 30, 2026 and 2025, respectively, and 32.5% and 32.6% for the nine months ended September 30, 2026 and 2025, respectively.

Previous wording

The $27.7 million increase in general and administrative expenses for the three months ended June 30, 2026 as compared to the same period in 2025 was primarily driven by $12.0 million in higher non-income tax expenses mainly from higher India GST expenses and $9.0 million higher labor and benefits costs.

Current wording

The $19.1 million increase in general and administrative expenses for the three months ended September 30, 2026 as compared to the same period in 2025 was primarily driven by $16.1 million higher non-income tax expenses mainly from higher India GST expenses and $11.4 million higher labor and benefits costs; partially offset by $11.8 million lower Member event and promotion costs.

Previous wording

The $58.8 million increase in general and administrative expenses for the six months ended June 30, 2026 as compared to the same period in 2025 was primarily driven by $26.7 million in higher labor and benefits costs and $20.0 million in higher non-income tax expenses mainly from higher India GST expenses.

Current wording

The $77.9 million increase in general and administrative expenses for the nine months ended September 30, 2026 as compared to the same period in 2025 was primarily driven by $38.1 million higher labor and benefits costs and $36.1 million higher non-income tax expenses mainly from higher India GST expenses; partially offset by $9.4 million lower Member event and promotion costs.

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 June 30, 2026. The $4.8 million of other operating income for the three months ended June 30, 2025 consisted of $4.8 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 September 30, 2026 and 2025.

Previous wording

The $5.5 million of other operating income for six months ended June 30, 2026 consisted of $5.5 million of government grant income for China. The $4.8 million of other operating income for the six months ended June 30, 2025 consisted of $4.8 million of government grant income for China.

Current wording

The $5.5 million of other operating income for the nine months ended September 30, 2026 consisted of $5.5 million of government grant income for China. 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.

Previous wording

The decrease in interest expense, net for the three and six months ended June 30, 2026 as compared to the same periods in 2025 was primarily due to a decrease in our weighted-average interest rate as a result of April 2026 debt refinancing transactions and 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, 2026 as compared to the same period in 2025 was primarily due to a decrease in our weighted-average interest rate as a result of the April 2026 debt refinancing. The decrease in interest expense, net for the nine months ended September 30, 2026 as compared to the same period in 2025 was primarily due to a decrease in our weighted-average interest rate as a result of the April 2026 debt refinancing and 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 $94.6 million of other expense, net for both the three and six months ended June 30, 2026 consisted of a loss on the extinguishment of the 2024 Credit Facility and the 2029 Secured Notes as a result of the April 2026 refinancing (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 $94.6 million of other expense, net for the nine months ended September 30, 2026 consisted of a loss on the extinguishment of the 2024 Credit Facility and the 2029 Secured Notes as a result of the April 2026 debt refinancing (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 $22.8 million and $29.8 million for the three months ended June 30, 2026 and 2025, respectively, and $53.2 million and $50.2 million for the six months ended June 30, 2026 and 2025, respectively. The income tax expense decreased for the three months ended June 30, 2026 as compared to the same period in 2025, primarily due to an increase in the tax benefits from discrete events, which includes the tax impact of the loss on extinguishment of debt, partially offset by changes in the geographic mix of our income. The income tax expense increased for the six months ended June 30, 2026 as compared to the same period in 2025, primarily due to changes in the geographic mix of our income, partially offset by an increase in the tax benefits from discrete events, which includes the tax impact of the loss on extinguishment of debt.

Current wording

Income taxes were $49.5 million and $31.7 million for the three months ended September 30, 2026 and 2025, respectively, and $102.7 million and $81.9 million for the nine months ended September 30, 2026 and 2025, respectively. The effective income tax rate was 46.4% and 42.4% for the three months ended September 30, 2026 and 2025, respectively, and 52.8% and 36.5% for the nine months ended September 30, 2026 and 2025, respectively. The increase in the effective tax rate for the three months ended September 30, 2026 as compared to the same period in 2025, was primarily due to unfavorable changes from discrete events, partially offset by the changes in the geographic mix of our income. The increase in the effective tax rate for the nine months ended September 30, 2026 as compared to the same period in 2025, was primarily due to changes in the geographic mix of our income, partially offset by favorable changes from discrete events.

Previous wording

We have historically met our short- and long-term working capital and capital expenditure requirements, including funding for expansion of operations, through net cash flows provided by operating activities. Variations in sales of our products directly affect the availability of funds. There are no material contractual restrictions on our ability to transfer and remit funds among our international affiliated companies. However, there are foreign currency restrictions in certain countries which could reduce our ability to timely obtain U.S. dollars. Even with these restrictions and the current inflationary environment, which is improving but has remained elevated in certain markets during the six months ended June 30, 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.

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, 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 $370.5 million cash and cash equivalents as of June 30, 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.

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 $409.2 million cash and cash equivalents as of September 30, 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.