Herbalife Ltd. 2026 Q2 Earnings Call

You may begin. Thank you, and welcome to everyone joining us.

With us today are Stephan Gratziani, our Chief Executive Officer, and John DeSimone, our Chief Financial Officer. Before we begin today's call, I would like to direct you to the cautionary statement regarding forward-looking statements on page two of our presentation and in our earnings release issued earlier today, which are both available under the Investor Relations section of our website. The presentation and earnings release include a discussion of some of the more important factors that could cause results to differ from those expressed in any forward-looking statement within the meaning of the Private Securities Litigation Reform Act of 1995. As is customary, the content of today's call and presentation will be governed by this language. In addition, during today's call, we will be discussing certain non-GAAP financial measures.

These non-GAAP financial measures exclude certain unusual or non-recurring items that management believes impact the comparability of the periods referenced. Please refer to our earnings release and presentation materials for additional information regarding these non-GAAP financial measures and the reconciliations to the most directly comparable GAAP measure. With that, I will now turn the call over to our CEO, Stephan Gratziani.

Thank you, Sam. Thank you all for joining us today. Before we begin, I'd like to welcome Samantha Holloway, our new Vice President of Investor Relations. Sam brings more than a decade of experience across finance, strategy, and most recently as the Head of Sales of North America at Herbalife, and we're excited to have her in this role. Over the past year, we've made strategic investments to build capabilities that will drive Herbalife's next phase of growth. This quarter marks an important milestone as those investments began translating into tangible execution, bringing new innovations to market, expanding our addressable audience, and creating new opportunities for our distributors. Today, I'd like to share how those investments are beginning to take shape across our business. First, let's review some financial highlights.

We delivered net sales of $1.3 billion, up 5.4% year-over-year, and at the top end of our guidance range. On a constant currency basis, net sales were up 5.8%, which exceeded guidance. This was our fourth consecutive quarter of year-over-year net sales growth on both a reported and constant currency basis, demonstrating the resilience of our business. Net sales in North America were up 20%, and while nominal, this marks the second quarter of growth in the last four quarters. Adjusted EBITDA was $167 million and near the top end of our guidance range. We entered 2026 with momentum and a clear set of priorities. Throughout the second quarter, we focused on translating our growing capabilities into execution across the business, expanding how we take personalized nutrition to market. Personalized nutrition has evolved into one of the fastest-growing segments in health and wellness.

According to Grand View Research, the category extends well beyond supplements to include personalized recommendations, digital technology, health data, individualized formulations, and ongoing engagement. Today, it represents a $34 billion growing global market. While the category is being defined and given a name, personalization isn't new to Herbalife, and while many companies are focused on individual segments, we believe our unique opportunity comes from combining technology, science, and human connection. For more than 45 years, Herbalife has been at the forefront of personalized nutrition, supported by decades of experience, global scale, and the strength of our distributor community. Every day, our distributors personalize the customer experience, helping them understand what to measure, what to take, what to do, and who to do it with. These four Ws have always been at the heart of our business.

What's evolving is how technology is helping to amplify that experience for both customers and distributors. We are working to bring together AI-assisted technology, biomarker insights, and individualized formulations while strengthening the human connection that has always set Herbalife apart. It's the reason we believe Herbalife is uniquely positioned to lead the next generation of personalized nutrition, beginning with our most recent launch. Bioniq GO is the first product we've brought to market following our acquisition of Bioniq in April. It is a personalized daily supplement that provides a simple, consumer-friendly entry point into personalized nutrition. Customers complete a digital wellness assessment and are matched to one of 40 personalized supplement formulas based on their individual profile and wellness goals. Supplements are the largest segment of the personalized nutrition market, accounting for nearly half of the category, and Bioniq GO represents the next generation of personalized nutrition for Herbalife.

We launched Bioniq GO at our Europe and Africa Extravaganza in June across 11 markets, followed by the U.S. launch at our North America Extravaganza in July. Additional market launches are planned for the second half of the year. In conjunction with the Bioniq GO launch in the European markets, we introduced new digital commerce and subscription capabilities like those recently made available in the U.S. These capabilities make it even easier for distributors to do business and for customers to incorporate products into their daily routines and maintain consistency. While we're excited about the opportunities Bioniq GO creates today, we're also looking ahead. Our acquisition agreement includes a call option for Bioniq LAB, a peptide distribution business, giving us the flexibility to evaluate that category over time. As always, we'll take a disciplined approach, continuing to assess the science, regulatory landscape, and long-term opportunity before determining the right path for Herbalife.

Bioniq GO advances the what to take element of our personalized nutrition strategy. At the center of that strategy is Pro2col, our personalized health operating system. Through AI-assisted recommendations and connected digital tools, it brings every element of our personalized nutrition approach together in one experience for distributors and customers. AI is one of the most powerful forces transforming personalized nutrition and consumer engagement. According to Grand View Research, the AI-powered personalization nutrition market includes AI-enabled nutrition apps and test-based solutions that deliver individualized recommendations, with nutrition apps representing the largest segment. The market is projected to grow from approximately $1.9 billion in 2026 to more than $10 billion by 2033, a 27% annual growth rate.

Developed in partnership with our distributors, Pro2col is how we'll bring these capabilities together in a single personalized health platform, combining AI-assisted support across what to measure, what to take, what to do, and who to do it with. We believe our distribution model gives us a distinct advantage to extend these capabilities through already established, trusted relationships. Pro2col is currently in expanded beta as we're building it out as a platform rather than a single product launch. Our focus during this phase is on developing capabilities that will make the platform an integral part of our distributors' daily methods of operations. We expect it to be adopted in stages as new modules and capabilities are introduced through next year, creating value incrementally and driving broader adoption over time. At our North America Extravaganza, we introduced a significant update based on distributor feedback.

The update included an overhauled user experience and enhanced features. In the second half of the year, we plan to introduce features like smart device integrations and evolved biomarker support while also building out distributor-specific business model capabilities. We also introduced a beta program for blood testing and platform integration. At this stage, we're focused on validating the end-to-end experience, from ordering and self-administering the blood test to external lab processing and delivery of results through Pro2col. Beyond Pro2col, we're also expanding our personalized health and wellness portfolio in North America through Life I/O, our healthy lifespan brand, giving our distributors the opportunity to serve a broader and growing consumer audience. According to McKinsey, longevity is one of the fastest-growing wellness categories, with more than 60% of consumers globally prioritizing products and services that support long-term health and vitality.

Life I/O is focused on this growing, digitally engaged customer segment that takes a proactive approach to wellness and invests in long-term health. The Life I/O brand portfolio includes Baseline, which was launched last year and features Niagen to increase NAD+ levels and support cellular health. Helio, a daily all-in-one super shake combining foundational nutrition with many of the functional ingredients consumers commonly purchase separately. Each serving delivers 30 grams of protein and beneficial fats for sustained energy, 6 grams of diverse fibers to support the microbiome, 20 plus vitamins and minerals, and a range of premium wellness ingredients like adaptogens and polyphenol blends. These unique ingredients all come together in a single product designed to simplify consumers' daily routine without compromising on taste. Helio launched in July at our North America Extravaganza alongside Activate Energy.

Activate Energy is our channel-exclusive entry into the exogenous ketone category following our acquisition of Pruvit last year. It features D-BHB ketone technology as well as caffeine, B vitamins, and electrolytes to support sustained energy, mental focus, hydration, and metabolic health. Together, Life I/O offerings broaden our product portfolio, strengthen our position in the healthy lifespan market, and extend our reach to a broader consumer audience. While technology and science are essential for personalized nutrition, it's our distributors who have always made it meaningful. AI-assisted technology can provide data, insights, and recommendations to help customers understand what to measure, what to take, and what to do. It's our distributors who turn those recommendations into action through encouragement, accountability, and trusted relationships that foster human connection, build community, and help customers stay motivated to achieve long-lasting results.