Annual report [Section 13 and 15(d), not S-K Item 405]

Segment Information

v3.25.4
Segment Information
 12 Months Ended
Dec. 31, 2025
Segment Reporting [Abstract]  
Segment Information

10. 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 December 31, 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 on 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, sales by product line, and sales by geographic area are as follows:

 

 

 

Year Ended December 31,

 

 

 

2025

 

 

2024

 

 

2023

 

 

 

(in millions)

 

Net sales:

 

 

 

 

 

 

 

 

 

Primary Reporting Segment

 

$

4,758.4

 

 

$

4,695.5

 

 

$

4,735.0

 

China

 

 

279.1

 

 

 

297.6

 

 

 

327.4

 

Total net sales

 

$

5,037.5

 

 

$

4,993.1

 

 

$

5,062.4

 

Significant segment expenses

 

 

 

 

 

 

 

 

 

Cost of Sales:

 

 

 

 

 

 

 

 

 

Primary Reporting Segment

 

$

1,077.0

 

 

$

1,060.9

 

 

$

1,141.0

 

China

 

 

37.6

 

 

 

43.4

 

 

 

50.0

 

Total cost of sales

 

$

1,114.6

 

 

$

1,104.3

 

 

$

1,191.0

 

Selling expenses:

 

 

 

 

 

 

 

 

 

Primary Reporting Segment (2)

 

$

1,644.2

 

 

$

1,630.3

 

 

$

1,656.2

 

China (3)

 

 

138.2

 

 

 

152.5

 

 

 

168.0

 

Total selling expenses

 

$

1,782.4

 

 

$

1,782.8

 

 

$

1,824.2

 

Contribution margin(1):

 

 

 

 

 

 

 

 

 

Primary Reporting Segment

 

$

2,037.2

 

 

$

2,004.3

 

 

$

1,937.8

 

China

 

 

103.3

 

 

 

101.7

 

 

 

109.4

 

Total contribution margin

 

$

2,140.5

 

 

$

2,106.0

 

 

$

2,047.2

 

General and administrative expenses

 

 

1,664.3

 

 

 

1,725.6

 

 

 

1,701.0

 

Other operating income

 

 

(4.8

)

 

 

(5.5

)

 

 

(10.2

)

Interest expense

 

 

214.4

 

 

 

218.3

 

 

 

165.9

 

Interest income

 

 

8.5

 

 

 

12.3

 

 

 

11.5

 

Other expense (income), net

 

 

—

 

 

 

10.5

 

 

 

(1.0

)

Income before income taxes

 

 

275.1

 

 

 

169.4

 

 

 

203.0

 

Income taxes

 

 

47.3

 

 

 

(84.9

)

 

 

60.8

 

Net income

 

$

227.8

 

 

$

254.3

 

 

$

142.2

 

Net sales by product line:

 

 

 

 

 

 

 

 

 

Weight Management

 

$

2,746.7

 

 

$

2,768.1

 

 

$

2,851.7

 

Targeted Nutrition

 

 

1,509.6

 

 

 

1,484.3

 

 

 

1,480.0

 

Energy, Sports, and Fitness

 

 

617.1

 

 

 

572.2

 

 

 

560.3

 

Outer Nutrition

 

 

85.0

 

 

 

83.6

 

 

 

82.5

 

Literature, Promotional, and Other

 

 

79.1

 

 

 

84.9

 

 

 

87.9

 

Total net sales

 

$

5,037.5

 

 

$

4,993.1

 

 

$

5,062.4

 

Net sales by geographic area:

 

 

 

 

 

 

 

 

 

United States

 

$

1,006.4

 

 

$

1,026.0

 

 

$

1,100.5

 

China

 

 

279.1

 

 

 

297.6

 

 

 

327.4

 

India

 

 

889.6

 

 

 

844.8

 

 

 

796.6

 

Mexico

 

 

557.7

 

 

 

538.6

 

 

 

525.0

 

Vietnam

 

 

278.2

 

 

 

283.7

 

 

 

279.0

 

Others

 

 

2,026.5

 

 

 

2,002.4

 

 

 

2,033.9

 

Total net sales

 

$

5,037.5

 

 

$

4,993.1

 

 

$

5,062.4

 

 

(1)
Contribution margin consists of net sales less cost of sales and selling expenses.
(2)
For the Primary Reporting Segment, selling expenses consists of Member compensation, which was previously presented as Royalty Overrides, as described further in Note 2, Basis of Presentation. Prior period amounts have been revised to reflect the current period presentation.
(3)
In China, selling expenses primarily consists of service fees to China independent service providers, which totaled $135.8 million, $149.8 million, and $165.0 million for the years ended December 31, 2025, 2024, and 2023, respectively, as described further in Note 2, Basis of Presentation.
(4)
The significant expense categories and amounts align with the segment-level information that is regularly provided to the CODM.

As of December 31, 2025 and 2024, goodwill allocated to the Company’s reporting units included in the Company’s Primary Reporting Segment was $97.5 million and $84.8 million, respectively, and goodwill allocated to the China segment was $3.0 million and $2.9 million, respectively.

The following table sets forth property, plant, and equipment and deferred income tax assets by geographic area:

 

 

 

December 31,

 

 

 

2025

 

 

2024

 

 

2023

 

 

 

(in millions)

 

Property, plant, and equipment, net:

 

 

 

 

 

 

 

 

 

United States

 

$

399.7

 

 

$

409.9

 

 

$

437.6

 

Foreign

 

 

48.0

 

 

 

50.3

 

 

 

68.9

 

Total property, plant, and equipment, net

 

$

447.7

 

 

$

460.2

 

 

$

506.5

 

Deferred income tax assets:

 

 

 

 

 

 

 

 

 

United States

 

$

297.5

 

 

$

273.2

 

 

$

209.1

 

Foreign

 

 

271.3

 

 

 

228.6

 

 

 

78.7

 

Total deferred income tax assets

 

$

568.8

 

 

$

501.8

 

 

$

287.8