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Segment Information | 9 Months Ended
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Sep. 30, 2025
Segment Reporting [Abstract] |
Segment Information | 6. Segment Information The Company is a nutrition company that sells a wide range of weight management; targeted nutrition; energy, sports, and fitness; and outer nutrition products. The Company’s products are manufactured by the Company in its Changsha, Hunan, China extraction facility; Suzhou, China facility; Lake Forest, California facility; and Winston-Salem, North Carolina facility, as well as by third-party providers, and then are sold to Members who consume and sell Herbalife products to retail consumers or other Members. Revenues reflect sales of products by the Company to its Members and are categorized based on geographic location. As of September 30, 2025, the Company sold products in 95 markets throughout the world and was organized and managed by five geographic regions: North America, Latin America, EMEA, Asia Pacific, and China. The Company defines its operating segments as those geographical operations. The Company aggregates its operating segments, excluding China, into a reporting segment, or the Primary Reporting Segment, as management believes that the Company’s operating segments have similar operating characteristics and similar long-term operating performance. In making this determination, management believes that the operating segments are similar in the nature of the products sold, the product acquisition process, the types of customers to whom products are sold, the methods used to distribute the products, the nature of the regulatory environment, and their economic characteristics. China has been identified as a separate reporting segment as it does not meet the criteria for aggregation. The Company determined the Chief Operating Decision Maker (CODM) as its Chief Executive Officer. The CODM reviews financial information, including net sales and contribution margin by operating segment, in order to determine how to allocate the Company’s resources across its operating segments, and reviews its assets and capital expenditures o n a consolidated basis and not by operating segment. Therefore, net sales and contribution margin are presented by reportable segment and assets and capital expenditures by segment are not presented. Operating information for the two reportable segments is as follows:
|  | Three Months Ended |  |  | Nine Months Ended |
|  | September 30, 2025 |  |  | September 30, 2024 |  |  | September 30, 2025 |  |  | September 30, 2024 |
|  | (in millions) |
Net sales: |  |  |  |  |  |  |  |  |  |  |  |
Primary Reporting Segment |  | $ | 1,202.4 |  |  | $ | 1,165.5 |  |  | $ | 3,538.4 |  |  | $ | 3,554.0 |
China |  |  | 71.3 |  |  |  | 74.8 |  |  |  | 216.1 |  |  |  | 231.7 |
Total net sales |  | $ | 1,273.7 |  |  | $ | 1,240.3 |  |  | $ | 3,754.5 |  |  | $ | 3,785.7 |
Significant segment expenses |  |  |  |  |  |  |  |  |  |  |  |
Cost of Sales (3)(4): |  |  |  |  |  |  |  |  |  |  |  |
Primary Reporting Segment |  | $ | 276.1 |  |  | $ | 258.6 |  |  | $ | 797.5 |  |  | $ | 802.9 |
China |  |  | 8.1 |  |  |  | 10.1 |  |  |  | 28.8 |  |  |  | 33.9 |
Total cost of sales |  | $ | 284.2 |  |  | $ | 268.7 |  |  | $ | 826.3 |  |  | $ | 836.8 |
Royalty Overrides and service fees to China independent service providers(1)(3)(4): |  |  |  |  |  |  |  |  |  |  |  |
Primary Reporting Segment |  | $ | 415.7 |  |  | $ | 404.7 |  |  | $ | 1,222.8 |  |  | $ | 1,234.0 |
China |  |  | 35.0 |  |  |  | 39.1 |  |  |  | 107.2 |  |  |  | 118.2 |
Total royalty overrides and service fees to China independent service providers |  | $ | 450.7 |  |  | $ | 443.8 |  |  | $ | 1,330.0 |  |  | $ | 1,352.2 |
Contribution margin(1): |  |  |  |  |  |  |  |  |  |  |  |
Primary Reporting Segment |  | $ | 510.6 |  |  | $ | 502.2 |  |  | $ | 1,518.1 |  |  | $ | 1,517.1 |
China |  |  | 28.2 |  |  |  | 25.6 |  |  |  | 80.1 |  |  |  | 79.6 |
Total contribution margin |  | $ | 538.8 |  |  | $ | 527.8 |  |  | $ | 1,598.2 |  |  | $ | 1,596.7 |
Selling, general, and administrative expenses excluding service fees to China independent service providers(1)(2) |  |  | 413.0 |  |  |  | 405.7 |  |  |  | 1,221.8 |  |  |  | 1,322.3 |
Other operating income |  |  | — |  |  |  | (5.0 | ) |  |  | (4.8 | ) |  |  | (5.0 | )
Interest expense, net |  |  | 51.0 |  |  |  | 56.5 |  |  |  | 156.6 |  |  |  | 152.1 |
Other expense, net |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 10.5 |
Income before income taxes |  |  | 74.8 |  |  |  | 70.6 |  |  |  | 224.6 |  |  |  | 116.8 |
Income taxes |  |  | 31.7 |  |  |  | 23.2 |  |  |  | 81.9 |  |  |  | 40.4 |
Net income |  | $ | 43.1 |  |  | $ | 47.4 |  |  | $ | 142.7 |  |  | $ | 76.4 |
(1) Contribution margin consists of net sales less cost of sales, Royalty overrides, and service fees to our independent service providers in China. For the China segment, contribution margin includes the portion of service fees to China independent service providers that are currently recorded in selling, general, and administrative expenses within the Company’s accompanying condensed consolidated statements of income, which totaled $34.6 million and $38.3 million for the three months ended September 30, 2025 and 2024, respectively, and $105.6 million and $116.2 million for the nine months ended September 30, 2025 and 2024, respectively. (2) Selling, general, and administrative expenses exclude the portion of service fees to China independent service providers that are included in selling, general, and administrative expenses within the Company’s accompanying condensed consolidated statements of income as described in footnote (1) above. (3) The significant expense categories and amounts align with the segment-level information that is regularly provided to the CODM. (4) As a result of adopting ASU 2023-07 during the fourth quarter of 2024, the Company has expanded and updated its disclosures for the current year and prior year periods as described in Note 2, Basis of Presentation, to the Consolidated Financial Statements included in the 2024 10-K. The following table sets forth net sales by geographic area:
|  | Three Months Ended |  |  | Nine Months Ended |
|  | September 30, 2025 |  |  | September 30, 2024 |  |  | September 30, 2025 |  |  | September 30, 2024 |
|  | (in millions) |
Net sales: |  |  |  |  |  |  |  |  |  |  |  |
United States |  | $ | 256.4 |  |  | $ | 253.5 |  |  | $ | 769.4 |  |  | $ | 787.5 |
India |  |  | 226.4 |  |  |  | 218.3 |  |  |  | 639.3 |  |  |  | 626.4 |
Mexico |  |  | 146.8 |  |  |  | 131.5 |  |  |  | 410.5 |  |  |  | 415.1 |
China |  |  | 71.3 |  |  |  | 74.8 |  |  |  | 216.1 |  |  |  | 231.7 |
Vietnam |  |  | 71.5 |  |  |  | 69.7 |  |  |  | 207.1 |  |  |  | 208.2 |
Others |  |  | 501.3 |  |  |  | 492.5 |  |  |  | 1,512.1 |  |  |  | 1,516.8 |
Total net sales |  | $ | 1,273.7 |  |  | $ | 1,240.3 |  |  | $ | 3,754.5 |  |  | $ | 3,785.7 |

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- Definition The entire disclosure for reporting segments including data and tables. Reportable segments include those that meet any of the following quantitative thresholds a) it's reported revenue, including sales to external customers and intersegment sales or transfers is 10 percent or more of the combined revenue, internal and external, of all operating segments b) the absolute amount of its reported profit or loss is 10 percent or more of the greater, in absolute amount of 1) the combined reported profit of all operating segments that did not report a loss or 2) the combined reported loss of all operating segments that did report a loss c) its assets are 10 percent or more of the combined assets of all operating segments. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Topic 280 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 21 -Subparagraph (b) -Publisher FASB -URI https://asc.fasb.org/1943274/2147482810/280-10-50-21 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Topic 280 -SubTopic 10 -Name 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