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Research from Water Tower Research

Water Tower Research is a leading equity research firm that provides research on micro, small and mid cap companies.

Water Tower Research was founded by Wall Street veterans after witnessing a fundamental shift in the investment research industry with the result being a declining knowledge base among investors, a lack of awareness and a shrinking pool of fundamental research being conducted on companies across the small-cap and micro-cap spectrum. The same issues are now increasingly occurring in the mid-cap space. This sea change within the investment community is impacting not only the companies themselves but also current shareholders and potential investors. With significantly less active sell-side sponsorship by Wall Street, a substantial information gap has developed between companies and various constituents in the financial community. The net result is fewer channels for insight and information to flow between companies and investors.

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<div><ul><li>HLF reported accelerating top-line momentum globally and, notably, the first Y/Y net sales growth in the US in more than four years. </li><li>This marks a significant milestone after an ongoing focus on distributor recruitment, training, and technology infrastructure.</li><li>Multiple strategic initiatives converging to drive North America’s recovery.</li></ul></div>

HLF reported accelerating top-line momentum globally and, notably, the first Y/Y net sales growth in the US in more than four years. This marks a significant milestone after an ongoing focus on distributor recruitment, training, and technology infrastructure.Multiple strategic initiatives converging to drive North America’s recovery.

HLF: WTR Small-Cap Spotlight Recap - Momentum Accelerating; Pro2col Launch Imminent

<div><ul><li>HLF delivered 3Q25 net sales growth of 2.7% Y/Y to $1,273.7MM, its first quarterly increase since 1Q24. </li><li>Ex-currency, organic sales increased 3.2% Y/Y, above the 2.5% midpoint of its guidance issued in August and the best organic growth since 2Q21.</li><li> HLF has posted constant currency net sales growth in six of the last eight quarters and this quarter also marked its first quarter of Y/Y worldwide volume growth since 2Q21.</li></ul></div>

HLF delivered 3Q25 net sales growth of 2.7% Y/Y to $1,273.7MM, its first quarterly increase since 1Q24. Ex-currency, organic sales increased 3.2% Y/Y, above the 2.5% midpoint of its guidance issued in August and the best organic growth since 2Q21. HLF has posted constant currency net sales growth in six of the last eight quarters and this quarter also marked its first quarter of Y/Y worldwide volume growth since 2Q21.

HLF: Momentum Accelerating; North America Returns to Growth

<ul><li>HLF has a network of more than 2 million distributors and is unique among direct sellers by having a hybrid model that includes more than 60,000 brick-and-mortar locations worldwide in the form of its distributors’ nutrition clubs.</li><li>This unique infrastructure provides a strong foundation to build a premier, technology-driven health and wellness platform.</li><li><p>Today’s technology-driven platforms interact with customers on one end and service providers on the other, bringing the two together to create a marketplace.</p></li></ul>

HLF has a network of more than 2 million distributors and is unique among direct sellers by having a hybrid model that includes more than 60,000 brick-and-mortar locations worldwide in the form of its distributors’ nutrition clubs.This unique infrastructure provides a strong foundation to build a premier, technology-driven health and wellness platform.Today’s technology-driven platforms interact with customers on one end and service providers on the other, bringing the two together to create a marketplace.

HLF US: Harnessing Technology to Enhance the Strength of Its Global Health & Wellness Infrastructure

<ul><li>HLF reported 2Q adjusted diluted EPS of $0.59 versus $0.54, up 9.3%, and above FactSet consensus of $0.50. Management does not provide an EPS outlook.</li><li>2Q net sales of $1,259.1MM were down 1.7% Y/Y, within guidance of down 3.5% to up 0.5%, but slightly below consensus of $1,271.2MM.</li><li>Ex-currency, sales were flat Y/Y. Net sales included 170 bps of FX headwinds Y/Y, better than the 300-bp headwind expected in 2Q guidance.</li></ul>

HLF reported 2Q adjusted diluted EPS of $0.59 versus $0.54, up 9.3%, and above FactSet consensus of $0.50. Management does not provide an EPS outlook.2Q net sales of $1,259.1MM were down 1.7% Y/Y, within guidance of down 3.5% to up 0.5%, but slightly below consensus of $1,271.2MM.Ex-currency, sales were flat Y/Y. Net sales included 170 bps of FX headwinds Y/Y, better than the 300-bp headwind expected in 2Q guidance.

Herbalife Ltd: 2Q Adjusted EBITDA Upside on In-Line Sales

<ul><li>We attended the Herbalife North America Extravaganza held in late July in Arlington, Texas, which is a large, in-person annual distributor event.</li><li>The highlight of the event was the reveal of the beta version of company’s new Pro2col™ health and wellness digital platform, providing greater insight into HLF’s next evolution into its vision of becoming the world’s premier health and wellness company, community, and platform.</li><li>The launch of Pro2col should be as impactful to Herbalife 3.0 as the launch of the Formula 1 Healthy Meal product line under the weight management category was to Herbalife 1.0 and the expansion into the adjacent active and lifestyle nutrition categories, particularly sports nutrition with the Herbalife24® product line, was to Herbalife 2.0.</li></ul>

We attended the Herbalife North America Extravaganza held in late July in Arlington, Texas, which is a large, in-person annual distributor event.The highlight of the event was the reveal of the beta version of company’s new Pro2col™ health and wellness digital platform, providing greater insight into HLF’s next evolution into its vision of becoming the world’s premier health and wellness company, community, and platform.The launch of Pro2col should be as impactful to Herbalife 3.0 as the launch of the Formula 1 Healthy Meal product line under the weight management category was to Herbalife 1.0 and the expansion into the adjacent active and lifestyle nutrition categories, particularly sports nutrition with the Herbalife24® product line, was to Herbalife 2.0.

Herbalife Ltd: Pro2col Beta Reveal Provides Deeper Insights into Herbalife 3.0

United States

Herbalife Ltd. is a global nutrition company that sells weight management, healthy meals and snacks, sports and fitness, energy and targeted nutritional products as well as personal care products. The Company distributes and sells its products through a network of independent distributors, using the direct selling channel.

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Herbalife Ltd (HLF US)

HLF: WTR Small-Cap Spotlight Recap - Momentum Accelerating; Pro2col Launch Imminent

HLF reported accelerating top-line momentum globally and, notably, the first Y/Y net sales growth in the US in more than four years.

Water Tower Research

HLF: Momentum Accelerating; North America Returns to Growth

HLF has posted constant currency net sales growth in six of the last eight quarters and this quarter also marked its first quarter of Y/Y worldwide...

Water Tower Research

HLF US: Harnessing Technology to Enhance the Strength of Its Global Health & Wellness Infrastructure

Today’s technology-driven platforms interact with customers on one end and service providers on the other, bringing the two together to create a...

Water Tower Research

Herbalife Ltd: 2Q Adjusted EBITDA Upside on In-Line Sales

HLF reported 2Q adjusted diluted EPS of $0.59 versus $0.54, up 9.3%, and above FactSet consensus of $0.50. Management does not provide an EPS outlook.

Water Tower Research

Herbalife Ltd: Pro2col Beta Reveal Provides Deeper Insights into Herbalife 3.0

We attended the Herbalife North America Extravaganza held in late July in Arlington, Texas, which is a large, in-person annual distributor event.

Water Tower Research

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