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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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<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

<ul><li>HLF reported 2025 1Q adjusted diluted EPS of $0.59 vs $0.49 in the year ago quarter, up 20.4% and ahead of $0.41 consensus.</li><li>1Q net sales declined 3.4% year-over-year to $1.2B, in the middle of management’s expected range of down 1.5% to down 5.5% year-over-year.</li><li>Ex-currency, net sales increased 1.4% year-over-year in the 1Q, within the guidance range of flat to up 4%, marking the 5th quarter out of the last six with positive organic sales growth.</li></ul>

HLF reported 2025 1Q adjusted diluted EPS of $0.59 vs $0.49 in the year ago quarter, up 20.4% and ahead of $0.41 consensus.1Q net sales declined 3.4% year-over-year to $1.2B, in the middle of management’s expected range of down 1.5% to down 5.5% year-over-year.Ex-currency, net sales increased 1.4% year-over-year in the 1Q, within the guidance range of flat to up 4%, marking the 5th quarter out of the last six with positive organic sales growth.

Herbalife Ltd: 1Q Adj. EBITDA Beat on In-Line Sales; FYE Adj EBITDA Raised

<ul><li>We recently attended the Herbalife Honors event in Los Angeles. This event is held annually for the top distributor leaders from around the world.</li><li>In conjunction with the event, HLF announced three financially small, but strategically important, acquisitions.</li><li>HLF announced it entered into a binding memorandum of understanding to acquire 100% of the assets of Pro2col Health LLC (Pro2col) and Pruvit Ventures, Inc. (Pruvit), as well as a 51% stake in Link BioSciences, Inc. (Link BioSciences). </li></ul>

We recently attended the Herbalife Honors event in Los Angeles. This event is held annually for the top distributor leaders from around the world.In conjunction with the event, HLF announced three financially small, but strategically important, acquisitions.HLF announced it entered into a binding memorandum of understanding to acquire 100% of the assets of Pro2col Health LLC (Pro2col) and Pruvit Ventures, Inc. (Pruvit), as well as a 51% stake in Link BioSciences, Inc. (Link BioSciences). 

Herbalife Ltd. - Three Strategic Acquisitions Announced in Conjunction with Honors Event

<ul><li>HLF recently reported 4Q24 adjusted diluted EPS of $0.36 versus $0.28 in 4Q23, up 28.6%, and above consensus of $0.19.</li><li>Management does not provide EPS guidance.</li><li>4Q24 net sales of $1.21 billion were down 0.6% versus $1.22 billion in 4Q23, in line with management’s expectations for net sales in the range of down 3.0% to up 1.0% Y/Y, and slightly above consensus of $1.19 billion. Excluding currency, net sales increased 2.7% Y/Y.</li></ul>

HLF recently reported 4Q24 adjusted diluted EPS of $0.36 versus $0.28 in 4Q23, up 28.6%, and above consensus of $0.19.Management does not provide EPS guidance.4Q24 net sales of $1.21 billion were down 0.6% versus $1.22 billion in 4Q23, in line with management’s expectations for net sales in the range of down 3.0% to up 1.0% Y/Y, and slightly above consensus of $1.19 billion. Excluding currency, net sales increased 2.7% Y/Y.

Herbalife Ltd: Momentum Accelerating; CEO Change Signals the Dawn of a New Era

<ul><li>The GIG economy has been viewed as a disruptor to the direct selling channel with respect to the business opportunity.</li><li>However, GIG concepts are top-down, have a specific formula, and assign tasks to their independent contractors for a fee, while direct sellers are micro-entrepreneurs who find a way to build their own businesses.</li><li>Herbalife has been successful in taking some of the best business models developed by distributors at a local level, and then globalizing them, such as. the Nutrition Clubs that arose in Mexico in the early 2000s.</li></ul>

The GIG economy has been viewed as a disruptor to the direct selling channel with respect to the business opportunity.However, GIG concepts are top-down, have a specific formula, and assign tasks to their independent contractors for a fee, while direct sellers are micro-entrepreneurs who find a way to build their own businesses.Herbalife has been successful in taking some of the best business models developed by distributors at a local level, and then globalizing them, such as. the Nutrition Clubs that arose in Mexico in the early 2000s.

Herbalife Ltd. - Uniquely Well Positioned Among Direct Sellers

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)

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

Herbalife Ltd: 1Q Adj. EBITDA Beat on In-Line Sales; FYE Adj EBITDA Raised

HLF reported 2025 1Q adjusted diluted EPS of $0.59 vs $0.49 in the year ago quarter, up 20.4% and ahead of $0.41 consensus.

Water Tower Research

Herbalife Ltd. - Three Strategic Acquisitions Announced in Conjunction with Honors Event

We recently attended the Herbalife Honors event in Los Angeles. This event is held annually for the top distributor leaders from around the world.

Water Tower Research

Herbalife Ltd: Momentum Accelerating; CEO Change Signals the Dawn of a New Era

HLF recently reported 4Q24 adjusted diluted EPS of $0.36 versus $0.28 in 4Q23, up 28.6%, and above consensus of $0.19. Management does not provide...

Water Tower Research

Herbalife Ltd. - Uniquely Well Positioned Among Direct Sellers

Herbalife has been successful in taking some of the best business models developed by distributors at a local level, and then globalizing them

Water Tower Research

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