HLFNYSEThe short version
Herbalife Ltd.
Herbalife sells nutrition products through 6.4 million independent members in 95 markets. Revenue grew in 2025 for the first time since 2021, and about $2.0 billion of debt sits ahead of a $1.3 billion equity.
The shares closed at $61.47 in February 2019 and $5.11 in February 2025; at $12.18 they are 2.4 times that low and 80% below the peak.
Mkt cap $2.1BNet debt $1.5BEV $3.6BP/E FY27E 3.9×ND/EBITDA FY27E 2.1×
$12.18
Share price, 27 July 2026
$5,037.5M
FY2025 net sales, up 0.9%
6.4M
Members across 95 markets
20.9%
India share of 1Q26 net sales
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Snapshot
Herbalife Ltd. in numbers
Price
$12.18as of 2026-07-27
Mkt cap
$2.1B
Net debt
$1.5B
EV
$3.6B
12m perf
+24.9%
3m ADV
$20.3M
| Year to Dec (USD) | 2023 | 2024 | 2025 | 2026E | 2027E | 2028E |
|---|---|---|---|---|---|---|
| Sales | 5.1B | 5.0B | 5.0B | 5.2B | 5.4B | 5.6B |
| EBITDA | – | – | – | 674.1M | 724.7M | 800.8M |
| EBIT | 356.4M | 385.9M | 481.0M | 532.7M | 574.3M | 666.5M |
| EBIT margin | 7.0% | 7.7% | 9.5% | 10.2% | 10.7% | 11.9% |
| EPS | 1.42 | 2.50 | 2.20 | 2.56 | 3.15 | 3.69 |
| EV/EBITDA | – | – | – | 5.4× | 5.0× | 4.5× |
| EV/EBIT | 10.2× | 9.4× | 7.6× | 6.8× | 6.3× | 5.5× |
| P/E | 8.6× | 4.9× | 5.5× | 4.8× | 3.9× | 3.3× |
| FCF yield | 10.6% | 7.8% | 12.1% | – | – | – |
| Gearing | n/a | n/a | n/a | – | – | – |
Consensus: S&P Capital IQ (CapIQ) · as of 2026-07-28Derived from run data; ratios use the latest price.
The statements
Revenue near its 2019 level, margins below their peak, cash flow steady.
FY2020 → FY2025as reported · $
Revenue$5.0B+1%
Gross margin77.9%flat
Operating margin9.5%+1.8pp
Net income$228M−10%
EPS$2.20−12%
Free cash flow$253M+55%
Open the full statements →As reported in the consolidated statements, FY2020 through FY2025.
- Top line. Net sales peaked at $5,802.8 million in 2021 and were $5,037.5 million in 2025 — a 0.9% rise, the first since 2021, on a 3.2% price effect against a 0.5% fall in volume.
- Margins. Operating margin fell from 12.7% in 2021 to 7.0% in 2023 and recovered to 9.5% in 2025, mostly on a restructuring programme that took about $80 million of annual cost out.
- Cash. Free cash flow was $252.9 million in 2025 against net income of $228.3 million; earnings per share were $2.20, against $4.13 in 2021.
Sales leader retention
The retention rate improved against a bar the company sets and last measured in 2021.
70.3%
Reported retention, January 2026 cycle+2.4 pts since January 2021
8.2 pts
Last disclosed gap, reported against adjusted68.9% against 60.7%, for 2022
580,617
Sales leaders outside China, February 2025582,107 two cycles earlier
Retention rates as disclosed in the FY2025 Form 10-K; the adjusted basis was last published in the FY2021 filing.
- The finding. Reported sales-leader retention has risen 2.4 points since the January 2021 cycle, to 70.3%, while the last time Herbalife quantified the effect of its lowered re-qualification thresholds the gap was 8.2 points — 68.9% reported against 60.7% adjusted — and every filing since FY2021 has said the lower-threshold method was extended to more markets without restating the adjustment.
- The size of it. The 8.2-point adjustment is 3.4 times the 2.4-point reported gain. On the adjusted basis the January 2022 cycle fell 2.2 points while the reported basis rose 1.0 point — one cycle, moving both ways.
- Against that. The ex-China leader count rose 1.6% in the last completed cycle, North American retention reached 77.8%, and Nu Skin lost 19% of its sales leaders over the same year. The February 2026 count settles it.
Which EBITDA counts
One balance sheet, three EBITDAs, half a turn of leverage between them.
Leverage by earnings measure
| Earnings measure | TTM Mar 2026 | Net leverage |
|---|---|---|
| Credit Agreement EBITDA | $744.0M | 2.41x |
| Adjusted EBITDA | $668.4M | 2.68x |
| EBITDA, unadjusted | $617.7M | 2.90x |
Struck on $2,044.6 million of Credit Agreement total debt at 31 March 2026, with cash netting capped at $250.0 million as the documents define it.
- Every leverage ratio in Herbalife's covenant stack is struck on Credit Agreement EBITDA of $744.0 million for the twelve months to March 2026 — $75.6 million above the company's own adjusted EBITDA of $668.4 million, which itself excludes $36.6 million of FY2025 technology cost while the capitalised remainder of the same $357 million programme amortises inside a depreciation line EBITDA removes by construction —
- and the 2.49 times ratio that measure produces is what cleared the 3.00:1.00 gate the ninth amendment installed for the restored $400.0 million restricted-payments basket, on a base whose FY2026 India GST mismatch is now guided to cost $20-25 million.
- Wide headroom. Herbalife reconciles Credit Agreement EBITDA in full each quarter and every technology add-back sits on its own labelled line. The binding 4.00:1.00 test needs that measure to fall 29%, to about $525.5 million, against $670.1 million even at the 2023 trough. The spread is a measurement fact, not a solvency one.
The last four years
Debt came down $796 million; the equity lost $3.1 billion over the same span.
Enterprise value: market value plus net debt
Enterprise value fell from $6,677 million to $2,856 million; the multiple went from 7.6 times to 4.3 times.
- The record. Between 2021 and 2025 Herbalife generated $1,143.8 million of free cash flow and cut Credit Agreement total debt from $2,845.8 million to $2,050.0 million, and over the same four years its equity fell from $4,433 million to $1,335 million, because adjusted EBITDA dropped 24.7% and the enterprise multiple went from 7.6 times to 4.6 times.
- The forward version is smaller. The stated target takes net debt from $1,593.4 million to $1.0 billion — $593 million, or $5.72 a share flat, and $17.90 a share at an unchanged multiple. The transfer that already ran retired $795.8 million.
- What is different now. Adjusted EBITDA has risen two years running, $570.6M to $634.8M to $657.6M, guided $675–705M. Against that, capital expenditure fell from $151.4M to $80.4M and cannot make that contribution again.
Where a dollar goes
Member compensation takes a third of every sales dollar, and it is close to fixed.
A dollar of FY2025 net sales
Member compensation and selling35.4%35%
General and administrative33%33%
Cost of sales22.1%22%
Operating income9.5%10%
FY2025 net sales of $5,037.5 million, as reported.
- The channel is the cost. Herbalife reports a 77.9% gross margin, but distribution sits below that line: selling expenses, almost entirely member commissions, took 35.4% of sales in 2025 and have held between 35% and 38% for five years.
- Overhead did the work. Administrative cost rose from 28.6% of sales in 2021 to 34.6% in 2024, then fell to 33.0% in 2025 as the restructuring completed — about $80 million of annual saving for $76.1 million of cumulative cost.
- The network. Of roughly 6.4 million members, about 580,600 outside China held sales-leader status after the February 2025 re-qualification; the rest are, in the company's words, discount buyers or small retailers.
India
One market carries the top line, and its step-change has a date on it.
India quarterly net sales
The GST rate cut took effect 22 September 2025; the growth-rate benefit annualises in September 2026.
- The concentration. India was 8.9% of net sales in 2021 and 20.9% in the March 2026 quarter, rising from $519.1 million to $889.6 million while the rest of the company fell 21.5%.
- A government-funded price cut. India's tax on most Herbalife products fell from 18% to 5%, cutting shelf prices about 11% without touching what Herbalife realises. India volume rose 36.9% in the March quarter.
- The cost side. The input-credit mismatch is guided at $20–25 million for 2026, up from about $16 million three months earlier, and it grows with India. Outside India, local-currency sales were about 1.5% lower in the quarter.
Weight management
The diet-branded shelf shrank while protein at retail grew.
Net sales change over the two years to fiscal 2025
Fiscal years differ: BellRing ends September, Simply Good Foods August, the others December.
- The controlled test. Quest, positioned on protein, grew 26.5% while Atkins, positioned on dieting, fell 20.1% — same shelves, same buyers, same drugs in the market. GLP-1 appears in none of five years of Herbalife's Form 10-K filings.
- Herbalife's own line. Weight management is the only major line smaller than in 2019, down 8.8%, and it is 54.5% of sales; energy, sports and fitness rose 75.3% over the same seven years.
- Against that. Medifast, the closest structural peer, lost 64% over the two years in which Herbalife's weight-management line fell 3.7%. Something in the network held a base Medifast's did not.
Rules and claims
A $260 million assessment file carries almost no accrual, and the U.S. rules are permanent.
Live assessments and claims, 31 March 2026
| Where | Assessed | Status |
|---|---|---|
| Brazil | $126.4M | Bonds and letters of credit posted |
| India | $109.7M | Two oldest years won, state appealed |
| Mexico | $24.1M | Administrative appeal, Sep 2024 |
| California class action | Unspecified | Pleading stage, nothing accrued |
No loss is accrued on $243.6 million of the assessment file; $150.8 million of letters of credit and surety bonds are outstanding.
- The permission the model runs on. The 2016 FTC consent order permanently governs U.S. compensation: distributors are paid only on documented profitable retail sales, preferred-member purchases and limited personal use. The independent auditor's term ended in May 2024.
- An undisclosed trigger. If eligible U.S. sales fall below 80% of total U.S. sales, distributor compensation is capped at 41.75%. Herbalife has never disclosed where that ratio sits, in a market worth $1,006.4 million of 2025 sales.
- Direction of travel. Recognised uncertain tax positions fell from $67.4 million in 2023 to $45.7 million in 2025, the 2020 Justice Department agreement was dismissed in 2024, and Brazil's largest single assessment closed in the company's favour last August.
Debt and interest
Interest took 45 cents of every operating dollar in 2025; April's refinancing cut the coupon.
Operating income and interest expense
The April 2026 refinancing cut the secured coupon from 12.250% to 7.750%, worth about $45 million a year.
- The trade. Herbalife swapped $1,165 million of expensive secured debt for $1,225 million of cheaper secured debt. Gross debt rose about $60 million, cash interest falls roughly $45 million a year, and the cash cost was about $72 million.
- What it did not do. It did not deleverage, and a preliminary $95 million loss on extinguishment lands in the second quarter of 2026 — the second such write-off in three years.
- The claim on cash. Reaching $1.4 billion of gross debt by 2028 means retiring about $280 million a year against a run-rate near $290 million, so on the current plan the equity is paid by debt falling rather than by cash coming out.
Free cash flow
The cash-flow improvement came from the capital line, and that source runs out in 2026.
Operating cash flow, capital expenditure and free cash flow
Free cash flow of $252.9 million is a 20.0% yield on $1,262.7 million of market value.
- The decomposition. Between 2023 and 2025 free cash flow rose $30.4 million while operating cash flow fell $24.2 million. All of the improvement, and more, came from spending $54.6 million less on capital.
- The programme behind it. Herbalife has spent about $357 million of a planned $400 million rebuilding its member technology, and none of it has reduced adjusted EBITDA — $36.6 million sat in the 2025 add-backs alone.
- 2026 guidance. Capital expenditure of $50–80 million plus $35–55 million of capitalised cloud-software cost brackets the $105.4 million of combined spend in 2025, with a midpoint slightly above it.
Capital allocation
The last $2.0 billion of buybacks bought shares now worth $518 million.
$2,006.6M
Spent on buybacks, 2020–2022
42.5M
Shares retired, at an average $47.21
$517.7M
Worth at $12.1825.8% of the cost recovered
$400M
Restricted-payments basket, restored April 2026
Cumulative repurchases since 2007 are about $6.5 billion; the company names them as the source of its debt.
- Where it went. About $1,318 million of the $2,007 million, or 66%, retired the position of a single activist holder rather than shrinking the share count against the open market.
- What management is paid on. The annual bonus and the reinstated performance stock units both run on local-currency net sales and adjusted EBITDA. Neither cash flow, nor leverage, nor debt reduction appears in either plan.
- The stated priority. No open-market repurchases in 2023, 2024, 2025 or the first quarter of 2026, and roughly $400 million of documented capacity sits unused against a $1.26 billion market value.
Valuation
At $12.18 the equity is 44% of the enterprise, so the multiple does most of the work.
Value per share at $670 million of adjusted EBITDA
3.0x — near Nu Skin and USANA
$4.02
4.0x
$10.48
4.3x — today's multiple
$12.42
5.0x
$16.94
6.0x — near the retail names
$23.41
Net debt held at $1,593.4 million; reaching the 2028 target of $1.0 billion adds a flat $5.72 to every row.
- The arithmetic. One turn of the multiple is $6.46 a share, 53% of the price, while a $50 million move in adjusted EBITDA at today's multiple is $2.06. Free cash flow of $252.9 million is a 20.0% yield on market value.
- The identifiable return. If enterprise value holds and net debt falls to $1.0 billion, the residual is $17.90 a share — 47% above today, with no change in the multiple and no growth. Consensus sits at $18.33, from two to three analysts.
- Against it. The identical transfer ran from 2021 to 2025 and the equity still lost 70%, because EBITDA and the multiple moved further than the debt did.
Grid values are per share at the stated multiple on $670 million of adjusted EBITDA, drawn from the report's sensitivity table.
What to watch
A 20% free-cash-flow yield on a leveraged claim, with the growth concentrated in one market.
- 01The February 2026 ex-China sales-leader count in the FY2026 Form 10-K: above roughly 581,000 puts the retention improvement in headcount rather than in the measurement.
- 02India net sales in the December 2026 filing: holding at or above roughly $275 million a quarter through the September GST anniversary means the level stuck.
- 03Net debt falling at about $54 million a quarter, the pace the $1.0 billion 2028 target requires; an acquisition or a repurchase authorisation before then competes directly with it.
- 042026 free cash flow rising on operating cash flow rather than on the capital line, with combined capitalised spend near the bottom of the $85–135 million guided range.
This distils a guided study built chapter by chapter from the filings, calls and presentations themselves.
Compiled from the full report · 2026-07-28 · For information, not investment advice.