HLF Q2 Deep Dive: Product Innovation and Digital Transformation Take Center Stage

Health and wellness products company Herbalife (NYSE:HLF) fell short of the market’s revenue expectations in Q2 CY2025, with sales falling 1.7% year on year to $1.26 billion. On the other hand, next quarter’s outlook exceeded expectations with revenue guided to $1.27 billion at the midpoint, or 1.6% above analysts’ estimates. Its non-GAAP profit of $0.59 per share was 18.6% above analysts’ consensus estimates.

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StockStory’s Take

Herbalife’s second quarter saw a negative market reaction as the company missed Wall Street’s revenue expectations, with sales declining year over year. Management attributed the results to ongoing transformation efforts, including shifts in product strategy and increasing digital engagement. CEO Stephan Gratziani highlighted the progress in launching new categories, such as the healthy lifespan supplement and MultiBurn, while also emphasizing operational efficiencies. Despite these initiatives, softness in North America and adverse currency impacts weighed on performance. Gratziani described the quarter as showing “clear signs of accelerating momentum,” but acknowledged that bold changes require time to impact sales.

Looking forward, Herbalife’s guidance is underpinned by increasing confidence in its new digital health platform and upcoming product launches. Management is focused on the commercial rollout of the Pro2col app in the U.S., distributor engagement, and subscription-based offerings. CFO John DeSimone noted that these efforts are expected to support sequential improvement in sales and margins, while CEO Gratziani said, “We see a powerful and clear path to sustainable growth and long-term shareholder value.” However, the team also cautioned that a full impact from these initiatives will take time, with international expansion planned for 2026.

Key Insights from Management’s Remarks

Management connected the quarter’s results to a mix of new product releases, regional performance variations, and the early stages of digital transformation. Recent acquisitions and operational changes also played a role in shaping the business trajectory.

• New digital platform beta: The Pro2col app, which combines personalized wellness recommendations with digital tracking and community features, entered beta testing with over 7,000 North American distributors. Management sees Pro2col as a key long-term growth lever, enabling deeper customer engagement and supporting the shift from transactional to transformational business models.
• Healthy lifespan supplement launch: Herbalife’s entry into the healthy lifespan category included a supplement featuring Niagen, targeting cellular health. Distributed alongside the Pro2col beta, the product’s commercial launch is planned for Q4 in the U.S. and Puerto Rico. Early feedback from distributors was positive, and management believes it will attract new customer segments.
• Subscription model expansion: The launch of MultiBurn and select products on an automatic monthly subscription in the U.S. marks a shift to recurring revenue streams. Management acknowledged that prior subscription efforts were limited, but sees significant long-term potential, noting that “adding this element is going to be an important element for the future.”
• Regional performance divergence: Latin America showed notable volume and pricing strength, partially offset by currency headwinds, while North America posted year-over-year volume declines. However, July marked the first month of volume growth in North America since April 2021, signaling possible momentum.
• Integration and M&A focus: The company continued integrating Pruvit and Link Biosciences, with plans to leverage proprietary personalization technology for future product differentiation. Management views these acquisitions as foundational to Herbalife’s transition to a data-driven, personalized wellness platform.

Drivers of Future Performance

Herbalife’s outlook is shaped by the ramp of digital health initiatives, new product launches, and efforts to drive recurring revenue while managing regional volatility and currency pressures.

• Commercial rollout of Pro2col: The upcoming U.S. launch of the Pro2col platform in Q4, and subsequent international expansion, is expected to drive customer engagement, distributor productivity, and incremental sales. Management is cautious about near-term revenue impact, as adoption will scale gradually.
• Subscription and product innovation: Management aims to boost retention and customer lifetime value with new subscription offerings like MultiBurn and the healthy lifespan supplement. These moves are designed to reduce reliance on one-time purchases and are expected to improve revenue quality over time.
• Regional and macroeconomic risks: While management expects sequential improvement in North America and continued momentum in Latin America, they remain mindful of potential consumer headwinds, competitive pricing dynamics, and ongoing foreign exchange volatility that could affect both top-line growth and margins.

Catalysts in Upcoming Quarters

Looking ahead, the StockStory team will be tracking (1) the commercial launch and adoption trajectory of the Pro2col platform in the U.S., (2) the ramp-up of subscription-based product offerings and their impact on retention rates, and (3) sequential improvements in North American sales and volume trends. We will also watch for regulatory progress that could accelerate international expansion of personalized wellness solutions and further integration milestones from recent acquisitions.

Herbalife currently trades at $8.91, down from $9.26 just before the earnings. Is there an opportunity in the stock?The answer lies in our full research report (it’s free).

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