Herbalife Ltd. revealed on September 8 that its board had authorized a $250 million share repurchase program to be executed over the subsequent three years. The company’s chief financial officer characterized the initiative as demonstrating management’s confidence in the business and its ability to simultaneously invest in operations while distributing capital to shareholders.
The company’s second quarter results, released August 5, showed net sales of $1.3 billion, representing a 5.4% year-over-year increase and reaching the upper end of guidance. Excluding currency fluctuations, growth reached 5.8%, marking the fourth consecutive quarter of year-over-year sales growth on both reported and constant currency bases. Latin America delivered the strongest regional performance with net sales rising 16.6%, while Asia Pacific increased 15.2% and 23.1% on a constant currency basis. Adjusted EBITDA reached $166.6 million, near the top of guidance, and $174.4 million on a constant currency basis, exceeding expectations. The company expanded its personalized nutrition offerings, launching Bioniq GO across eleven European markets and the United States, along with new Life I/O branded products and an early-stage blood biomarker diagnostic platform.
However, the same quarter produced a net loss of $26.3 million, substantially driven by a $94.6 million charge related to debt extinguishment following an April refinancing. Gross margin declined to 77.7% from 78.0% year-over-year, while adjusted EBITDA margin contracted 120 basis points to 12.6%. Geographic performance proved uneven, with China sales declining 24.5% as reported and 29.0% on a constant currency basis, and EMEA falling 3.5% or 5.6% adjusting for currency. Management subsequently narrowed full-year 2026 adjusted EBITDA guidance to a range of $670 million to $690 million from the prior $675 million to $705 million range.
Operational challenges persist beyond financial performance. The company carries a shareholders’ deficit of $466.9 million as of June 30 and maintains over $2 billion in long-term debt. Hedge fund ownership declined from 38 funds to 34 in the recent quarter, signaling institutional investor pullback. Short interest reached 9.72% of float, reflecting significant bearish positioning. The stock traded at a forward price-to-earnings multiple of 3.88 as of September 14, suggesting market skepticism regarding earnings sustainability. Leadership transitions loom as CFO John DeSimone is scheduled to retire at year-end, with Scott Schaefer assuming the role January 1, 2027.
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