Health and wellness products company Herbalife (NYSE: HLF) reported Q2 CY2026 results beating Wall Street’s revenue expectations, with sales up 5.4% year on year to $1.33 billion. The company expects next quarter’s revenue to be around $1.31 billion, close to analysts’ estimates. Its non-GAAP profit of $0.51 per share was 4.9% below analysts’ consensus estimates.
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Herbalife (HLF) Q2 CY2026 Highlights:
- Revenue: $1.33 billion vs analyst estimates of $1.31 billion (5.4% year-on-year growth, 1.5% beat)
- Adjusted EPS: $0.51 vs analyst expectations of $0.54 (4.9% miss)
- Revenue Guidance for Q3 CY2026 is $1.31 billion at the midpoint, roughly in line with what analysts were expecting
- EBITDA guidance for the full year is $680 million at the midpoint, above analyst estimates of $674.1 million
- Operating Margin: 9.7%, in line with the same quarter last year
- Free Cash Flow Margin: 1.6%, down from 5.8% in the same quarter last year
- Market Capitalization: $1.33 billion
Company Overview
With the first products sold out of the trunk of the founder’s car, Herbalife (NYSE: HLF) today offers a portfolio of shakes, supplements, personal care products, and weight management programs to help customers reach their nutritional and fitness goals.
Revenue Growth
A company’s long-term sales performance can indicate its overall quality. Any business can have short-term success, but a top-tier one grows for years.
With $5.20 billion in revenue over the past 12 months, Herbalife carries some recognizable products but is a mid-sized consumer staples company. Its size could bring disadvantages compared to larger competitors benefiting from better brand awareness and economies of scale.
As you can see below, Herbalife’s sales grew at a weak 1% compounded annual growth rate over the last three years. This shows it failed to generate demand in any major way and is a rough starting point for our analysis.
This quarter, Herbalife reported year-on-year revenue growth of 5.4%, and its $1.33 billion of revenue exceeded Wall Street’s estimates by 1.5%. Company management is currently guiding for a 2.5% year-on-year increase in sales next quarter.
Looking further ahead, sell-side analysts expect revenue to grow 2.1% over the next 12 months, similar to its three-year rate. While this projection indicates its newer products will spur better top-line performance, it is still below average for the sector.
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Cash Is King
Free cash flow isn’t a prominently featured metric in company financials and earnings releases, but we think it’s telling because it accounts for all operating and capital expenses, making it tough to manipulate. Cash is king.
Herbalife has shown mediocre cash profitability relative to peers over the last two years, giving the company fewer opportunities to return capital to shareholders. Its free cash flow margin averaged 4.9%, below what we’d expect for a consumer staples business.
Taking a step back, an encouraging sign is that Herbalife’s margin expanded by 2.7 percentage points over the last year. The company’s improvement shows it’s heading in the right direction, and we can see it became a less capital-intensive business because its free cash flow profitability rose while its operating profitability was flat.
Herbalife’s free cash flow clocked in at $21.6 million in Q2, equivalent to a 1.6% margin. The company’s cash profitability regressed as it was 4.2 percentage points lower than in the same quarter last year, but we wouldn’t read too much into the short term because investment needs can be seasonal, leading to temporary swings. Long-term trends are more important.
Key Takeaways from Herbalife’s Q2 Results
It was good to see Herbalife narrowly top analysts’ revenue expectations this quarter. On the other hand, its EPS missed and its EBITDA guidance for next quarter fell short of Wall Street’s estimates. Overall, this quarter could have been better. The stock traded down 3.4% to $12.16 immediately after reporting.
Is Herbalife an attractive investment opportunity at the current price? The latest quarter does matter, but not nearly as much as longer-term fundamentals and valuation, when deciding if the stock is a buy. We cover that in our actionable full research report which you can read here (it’s free).
