Nature's Sunshine Products, Inc. Stock price
Is Nature's Sunshine Products, Inc. a Top Scorer Stock based on the Dividend, High-Growth-Investing or Leverman Strategy?
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Key metrics
📘 Market Capitalization
📈 What is it?
Market capitalization shows how much a company is currently worth on the stock market.
🧮 How is it calculated?
🏛️ Why is it important?
It helps classify companies by size (Large, Mid, Small Cap) and indicates their market presence and relative stability.
🧮 Calculation
🎯 What does this mean for investors?
- Large-cap companies tend to be more stable, often pay dividends, but may grow more slowly.
- Smaller firms may offer higher growth potential but come with more volatility.
- Market capitalization is a useful indicator of company size — but not a measure of whether a stock is undervalued or overvalued.
📘 Enterprise Value (EV)
📈 What is it?
Enterprise Value represents the total cost to acquire a company — including its debt and excluding its cash reserves.
🧮 How is it calculated?
(= Market Cap + Net Debt)
🏛️ Why is it important?
EV gives a more complete picture of a company's value than market cap alone and is used in key valuation ratios like EV/FCF or EV/Sales.
🧮 Calculation
🎯 What does this mean for investors?
- Enterprise Value shows the true cost of buying a company, including all financial obligations.
- It is more accurate than just looking at market cap, especially when comparing companies with different levels of debt or cash.
- Professional investors prefer EV-based multiples because they better reflect the company’s full financial footprint.
📘 Net Debt
📈 What is it?
Net Debt shows how much debt remains after subtracting a company’s available cash reserves.
🧮 How is it calculated?
🏛️ Why is it important?
It indicates how dependent a company is on borrowed money and how easily it can service its debt in the short term.
🧮 Calculation
🎯 What does this mean for investors?
- Low or negative net debt signals financial strength and flexibility.
- Companies with strong cash positions are better positioned in crises.
- High net debt increases financial risk — especially in environments with rising interest rates or economic downturns.
📘 Cash
📈 What is it?
Cash represents all liquid assets a company can access immediately — including cash, bank deposits, and short-term investments.
🧮 How is it calculated?
🏛️ Why is it important?
It reflects a company’s financial flexibility and resilience — enabling investments, buybacks, or buffer in downturns.
🧮 Calculation
🎯 What does this mean for investors?
- A strong cash position means greater room for maneuver and crisis resistance.
- Cash-rich companies can invest, pay down debt, or repurchase shares.
- But excess idle cash might indicate a lack of growth opportunities.
📘 Shares Outstanding
📈 What is it?
Shares outstanding represent the total number of a company’s shares currently held by investors — excluding treasury stock.
🧮 How is it calculated?
🏛️ Why is it important?
It’s the basis for key metrics like Earnings Per Share (EPS), Market Capitalization, or the Price/Earnings ratio (P/E).
🧮 Calculation
🎯 What does this mean for investors?
- Fewer shares in circulation typically increase earnings per share — making each share more valuable.
- Share buybacks reduce the number of shares and boost per-share metrics.
- Issuing new shares does the opposite — diluting shareholder value and lowering per-share figures.
📘 Price-to-Earnings Ratio (P/E)
📈 What is it?
The P/E ratio shows how many times a company's earnings per share are reflected in its current share price — in other words, how "expensive" the stock appears relative to its profits.
🧮 How is it calculated?
🏛️ Why is it important?
The P/E ratio is one of the most widely used valuation metrics. It helps investors assess whether a stock appears cheap or expensive compared to its earnings power.
🧮 Calculation
📊 P/E (TTM) = Based on earnings from the last 12 months (Trailing Twelve Months):🎯 What does this mean for investors?
- A low P/E may indicate undervaluation — or signal underlying issues.
- A high P/E may reflect strong growth expectations — or an overvalued stock.
📘 Price-to-Sales Ratio (P/S)
📈 What is it?
The P/S ratio shows how much investors are paying for $1 of the company’s revenue – regardless of profitability.
🧮 How is it calculated?
🏛️ Why is it important?
P/S is especially useful for evaluating growth companies or businesses not yet profitable. It reflects how the market values the company’s sales.
🧮 Calculation
Market Cap = $211.50m | Revenue (TTM) = $492.02m
Market Cap = $211.50m | Estimated Revenue = $505.61m
🎯 What does this mean for investors?
- A low P/S may indicate undervaluation — or low profitability.
- A high P/S can reflect strong growth expectations — or excessive optimism.
- Especially helpful when evaluating companies where profits are low, volatile, or negative.
📘 Enterprise Value to Sales (EV/Sales)
📈 What is it?
EV/Sales shows how much investors are paying for $1 of revenue — considering not just equity, but also debt and cash. It’s the capital structure–adjusted version of the P/S ratio.
🧮 How is it calculated?
🏛️ Why is it important?
It’s ideal for comparing companies with different levels of debt. It reflects a company's true cost relative to its revenue.
🧮 Calculation
Enterprise Value = $129.00m | Revenue (TTM) = $492.02m
Enterprise Value = $129.00m | Forward Revenue = $505.61m
🎯 What does this mean for investors?
- EV/Sales allows for capital structure–neutral company comparisons.
- A lower ratio may indicate undervaluation; a higher one may signal strong growth expectations or overvaluation.
- Especially helpful when evaluating high-growth companies with low or negative earnings.
📘 Enterprise Value to Free Cash Flow (EV/FCF) | ex SBC
📈 What is it?
EV/FCF compares a company’s enterprise value with its free cash flow. The metric therefore shows the multiple of current free cash flow at which a company is valued. EV/FCF ex SBC additionally accounts for stock-based compensation (SBC). While SBC does not represent a direct cash outflow, issuing shares as compensation can dilute existing shareholders. Therefore, SBC is deducted from free cash flow in this adjusted version.
🧮 How is it calculated?
EV/FCF ex SBC = Enterprise Value ÷ (Free Cash Flow (TTM) − SBC)
🏛️ Why is it important?
EV/FCF provides a valuation based on free cash flow and therefore complements earnings-based valuation metrics such as the P/E ratio. The ex SBC version additionally accounts for the economic impact of stock-based compensation and provides a more conservative view from a shareholder perspective.
🧮 Calculation
🎯 What does this mean for investors?
- A low EV/FCF means that enterprise value is low relative to current free cash flow. The reasons should always be considered in the context of the company and its industry.
- A high EV/FCF means that enterprise value is high relative to current free cash flow. This can, for example, reflect high growth expectations or temporarily weak cash generation.
- When SBC is positive and adjusted free cash flow remains positive, EV/FCF ex SBC is generally higher than the standard EV/FCF.
- The metric is particularly useful for companies with relatively stable and predictable cash flows.
- If free cash flow is negative or very low, EV/FCF has limited usefulness and should not be interpreted like a standard valuation multiple.
📘 Price-to-Book Ratio (P/B)
📈 What is it?
The P/B ratio compares a company’s market value to its book value — showing how much investors are paying for each dollar of net assets.
🧮 How is it calculated?
🏛️ Why is it important?
P/B is commonly used for asset-heavy industries like banks or industrials. It helps assess whether a stock is trading above or below its net asset value.
🧮 Calculation
🎯 What does this mean for investors?
- A P/B below 1 may signal undervaluation — or weak profitability.
- A P/B above 1 implies the market expects future value creation (e.g., brand, IP, growth).
- Best used for companies with tangible assets and strong balance sheets.
📘 Dividend per Share (DPS)
📈 What is it?
Dividend per Share shows how much cash a company pays out to shareholders for each share they own – usually on an annual or quarterly basis.
🧮 How is it calculated?
🏛️ Why is it important?
DPS is the absolute value of the payout per share – crucial for income-focused investors and dividend strategies.
🎯 What does this mean for investors?
- A stable or growing DPS often signals a strong, shareholder-friendly business.
- DPS alone doesn’t tell you how attractive the payout is – the stock price also matters (→ see Dividend Yield).
- Long-term dividend growth is often a hallmark of high-quality companies – like the dividend aristocrats.
📘 Dividend Yield
📈 What is it?
Dividend yield shows how large a company’s dividend is in relation to its current share price.
🧮 How is it calculated?
🏛️ Why is it important?
It allows investors to compare dividend payouts across stocks, regardless of price or payout size.
🧮 Calculation
🎯 What does this mean for investors?
- A stable yield can reflect reliable distributions.
- Comparing 1Y and 5Y yield shows whether dividend growth keeps pace with stock price appreciation.
- A low yield isn’t always negative – it can signal strong past performance or growth focus.
📘 Dividend Growth
📈 What is it?
Dividend growth shows how much a company has increased its dividend per share over time.
🧮 How is it calculated?
5Y: Compound Annual Growth Rate (CAGR)
🏛️ Why is it important?
Consistently rising dividends are often a sign of financial strength and shareholder orientation – especially relevant for long-term investors.
🎯 What does this mean for investors?
- Stable dividend growth is a sign of sustainable earning power.
- High dividend growth can significantly boost your total return:
- If a company pays $1 in dividends and increases it by 15% annually over 5 years, you’ll receive $2 per share in year 5 – twice as much as at the start!
📘 Payout Ratio
📈 What is it?
The payout ratio shows what percentage of a company’s earnings (per share) is distributed to shareholders as dividends.
🧮 How is it calculated?
🏛️ Why is it important?
It helps assess whether the dividend is sustainable – especially in relation to the company’s profitability.
🧮 Calculation
🎯 What does this mean for investors?
- A low payout ratio means the company retains more earnings for reinvestment – typical for growth companies.
- A moderate payout (e.g. 25–50%) indicates a healthy balance between returns and reinvestment.
- High payout ratios may seem attractive but can carry risk if earnings decline.
📘 Consecutive Dividend Increases
📈 What is it?
This metric shows how many consecutive years a company has raised its dividend per share – without any cuts or pauses.
🧮 How is it calculated?
(Special dividends are not considered.)
🏛️ Why is it important?
A long track record of increases reflects financial strength, consistency, and shareholder commitment.
🎯 What does this mean for investors?
- A long dividend increase streak builds confidence – especially in volatile markets.
- Such companies are seen as reliable and income-friendly investments.
- The longer the streak, the stronger the company’s dividend discipline.
📘 Revenue
📈 What is it?
Revenue shows how much a company earns in total from selling its products and services – the gross income before any costs are deducted.
🧮 How is it calculated?
🏛️ Why is it important?
Revenue is one of the key figures to assess a company’s size, market position, and growth potential.
🧮 Calculation
🎯 What does this mean for investors?
- Growing revenue indicates rising demand and can be an early signal of future earnings growth.
- Comparing actual and expected revenue reveals trends in the market environment and analyst sentiment.
- Note: Strong revenue alone isn’t enough – margins and profitability matter just as much.
📘 EBITDA
📈 What is it?
EBITDA stands for “Earnings Before Interest, Taxes, Depreciation, and Amortization.” It reflects a company’s operating profit before the effects of financing, taxes, and accounting depreciation.
🧮 How is it calculated?
🏛️ Why is it important?
EBITDA is widely used to evaluate a company’s operating performance – especially across capital-intensive sectors or international comparisons.
🧮 Calculation
🎯 What does this mean for investors?
- A high or growing EBITDA indicates strong operational profitability – independent of taxes, interest, or accounting methods.
- It’s especially useful for comparing companies across sectors or geographies.
- Important: EBITDA is not a net income figure – it excludes key costs like depreciation and interest.
📘 EBIT
📈 What is it?
EBIT stands for “Earnings Before Interest and Taxes.” It reflects a company’s operating profit after depreciation, but before interest and tax expenses.
🧮 How is it calculated?
🏛️ Why is it important?
EBIT is a core profitability metric that shows how well the company performs in its main business operations – independent of capital structure and tax environment.
🧮 Calculation
🎯 What does this mean for investors?
- A high EBIT indicates strong profitability from the company’s core business – before financial and tax effects.
- It allows better comparison between companies with different debt levels or tax structures.
- Compared to EBITDA, EBIT already accounts for depreciation and reflects capital intensity more clearly.
📘 Net Income
📈 What is it?
Net income is the company’s total profit – the amount left after all expenses, taxes, interest, and depreciation have been deducted.
🧮 How is it calculated?
🏛️ Why is it important?
Net income is the most comprehensive measure of a company’s profitability – showing how much actual profit remains after all business and financing costs.
🧮 Calculation
🎯 What does this mean for investors?
- Growing net income indicates that the company is managing all of its costs efficiently.
- It directly influences valuation metrics like P/E ratio and the company’s dividend capacity.
- Over time, net income trends reveal how resilient and profitable the business model really is.
📘 Free Cash Flow (FCF) | ex SBC
📈 What is it?
Free cash flow shows how much cash remains after a company has covered its operating and capital expenditures. FCF ex SBC additionally deducts stock-based compensation (SBC) to adjust the cash flow for the effect of non-cash SBC.
🧮 How is it calculated?
Free Cash Flow ex SBC = Operating Cash Flow − SBC − Capital Expenditures (CAPEX)
🏛️ Why is it important?
FCF reflects a company’s actual financial strength – independent of reported accounting earnings. It shows how much flexibility a company has for dividends, share buybacks, or debt reduction. FCF ex SBC also deducts stock-based compensation and shows how much cash generation remains after SBC.
🧮 Calculation
🎯 What does this mean for investors?
- High free cash flow indicates that a company has strong financial strength – independent of reported earnings.
- It is often a solid basis for sustainable dividends and share buybacks.
- Declining FCF can be a warning sign, even if reported earnings remain stable.
📘 Revenue Growth
📈 What is it?
Revenue growth shows how much a company’s sales have changed compared to the previous year – both on a trailing basis (TTM) and based on forward projections.
🧮 How is it calculated?
Forward = (Expected revenue ÷ Revenue in prior year − 1) × 100
Forward growth is based on analyst estimates for the current fiscal year.
🏛️ Why is it important?
Rising revenue signals growing demand, business expansion, and market share gains – especially important for growth-oriented companies.
🧮 Calculation
🎯 What does this mean for investors?
- Growth is the engine of long-term value creation – especially in tech and growth sectors.
- What matters is not just current growth, but its sustainability.
- Forward projections reflect whether analysts expect continued momentum – or a slowdown.
📘 EBITDA Growth
📈 What is it?
EBITDA growth shows how much a company’s operating profit (before interest, taxes, depreciation, and amortization) has increased or decreased compared to the previous year.
🧮 How is it calculated?
Forward = (Expected EBITDA ÷ EBITDA from prior year − 1) × 100
The forward estimate is based on analyst projections for the current fiscal year.
🏛️ Why is it important?
Growing EBITDA indicates improving operational profitability – regardless of financing or accounting effects.
🧮 Calculation
🎯 What does this mean for investors?
- Strong EBITDA growth signals operational efficiency and scalability – especially during growth phases.
- EBITDA growth can be an early indicator of margin and earnings expansion – but should be assessed alongside revenue and EBIT.
📘 EBIT Growth
📈 What is it?
EBIT growth shows how much a company’s operating profit (after depreciation, but before interest and taxes) has increased compared to the previous year.
🧮 How is it calculated?
Forward = (Expected EBIT ÷ EBIT from prior year − 1) × 100
The forward estimate is based on analyst projections for the current fiscal year.
🏛️ Why is it important?
EBIT growth is a direct indicator of a company’s business performance – taking into account capital intensity through depreciation.
🧮 Calculation
🎯 What does this mean for investors?
- Rising EBIT signals improving operating profitability – even after accounting for depreciation.
- It’s especially important for evaluating companies with significant capital expenditures.
- Combined with revenue and EBITDA growth, EBIT growth provides a well-rounded view of operational progress.
📘 Net Income Growth
📈 What is it?
Net income growth shows how much a company’s bottom-line profit has increased or decreased compared to the previous year – both on a trailing basis (TTM) and based on analyst projections.
🧮 How is it calculated?
Forward = (Expected net income ÷ Net income from prior year − 1) × 100
The forward estimate reflects analysts’ expectations for the current fiscal year.
🏛️ Why is it important?
Net income is the ultimate measure of profitability. Growing net income signals stronger efficiency, cost control, and sustainable earnings power.
🧮 Calculation
🎯 What does this mean for investors?
- Stronger net income boosts valuation, dividend potential, and investor confidence.
- If profits stall while revenue grows, it may signal margin pressure.
📘 Free Cash Flow Growth
📈 What is it?
Free cash flow (FCF) growth shows how a company’s available cash – after covering operating expenses and capital expenditures – has changed compared to the previous year.
🧮 How is it calculated?
🏛️ Why is it important?
Free cash flow reflects real financial strength. Growing FCF indicates more flexibility for dividends, share buybacks, and reinvestment.
🧮 Calculation
🎯 What does this mean for investors?
- Declining FCF may point to rising investments, increasing costs, or weaker operating performance.
- Especially for dividend investors, FCF growth is critical – since dividends are paid from actual available cash.
- A negative trend isn't always bad, but it deserves closer attention.
📘 Gross Margin
📈 What is it?
Gross margin shows how much of a company’s revenue remains after deducting the direct costs of goods sold (like materials and production). It represents the company’s “raw profit” before fixed costs, taxes, and interest.
🧮 How is it calculated?
Or simply: Gross Margin = Gross Profit ÷ Revenue × 100
🏛️ Why is it important?
Gross margin indicates how efficiently a company can produce or procure what it sells. It is a key measure of product-level profitability and pricing power.
🧮 Calculation
🎯 What does this mean for investors?
- A high gross margin suggests strong pricing power and efficient production.
- Falling margins may signal rising input costs or competitive pressure.
- Compared to peers, gross margin offers insights into the quality of a business model.
📘 EBITDA Margin
📈 What is it?
The EBITDA margin shows how much of a company’s revenue remains as operating profit before interest, taxes, depreciation, and amortization.It reflects operating efficiency without being distorted by financing or accounting factors.
🧮 How is it calculated?
🏛️ Why is it important?
The EBITDA margin reveals how much operating income a company generates per dollar of revenue – independent of capital structure and tax effects.
🧮 Calculation
🎯 What does this mean for investors?
- A high EBITDA margin reflects strong core profitability – before accounting distortions.
- It allows for effective comparisons across companies and sectors.
- A stable or growing margin signals efficient cost control and business scalability.
📘 EBIT Margin
📈 What is it?
The EBIT margin shows what percentage of revenue remains as operating profit after depreciation but before interest and taxes.
🧮 How is it calculated?
🏛️ Why is it important?
The EBIT margin reflects a company’s core profitability while accounting for capital intensity (e.g. machinery, infrastructure). It’s especially useful for comparing businesses with different levels of depreciation.
🧮 Calculation
🎯 What does this mean for investors?
- A high EBIT margin shows that the company remains efficient even after factoring in depreciation.
- It’s especially relevant for capital-intensive industries.
- Stable or rising EBIT margins over time are a strong indicator of pricing power and business quality.
📘 Net Margin
📈 What is it?
Net margin shows how much of a company’s revenue remains as bottom-line profit after deducting all costs, interest, taxes, and depreciation.
🧮 How is it calculated?
🏛️ Why is it important?
Net margin reflects a company’s overall efficiency – across operations, financing, and taxation. It shows how much actual profit is generated from each dollar of revenue.
🧮 Calculation
🎯 What does this mean for investors?
- A high net margin means the company is not only strong operationally but also manages financing and taxes efficiently.
- Peer comparisons reveal business quality and competitiveness.
- Declining margins despite revenue growth can be a red flag for rising costs or inefficiencies.
📘 Free Cash Flow Margin | ex SBC
📈 What is it?
The Free Cash Flow Margin shows how much free cash flow a company generates relative to its revenue. In simplified terms, free cash flow is calculated as operating cash flow minus capital expenditures. The Free Cash Flow Margin ex SBC additionally accounts for stock-based compensation (SBC). While SBC does not represent a direct cash outflow, issuing shares as compensation can dilute existing shareholders. Therefore, SBC is deducted from free cash flow in this adjusted metric.
🧮 How is it calculated?
Free Cash Flow Margin ex SBC = (Free Cash Flow − SBC) ÷ Revenue × 100
🏛️ Why is it important?
The Free Cash Flow Margin shows how efficiently a company converts its revenue into free cash flow. Strong free cash flow can provide financial flexibility for dividends, share buybacks, debt repayment, or further investments. The ex SBC version additionally accounts for the economic impact of stock-based compensation and therefore provides a more conservative view of cash generation from a shareholder perspective.
🧮 Calculation
🎯 What does this mean for investors?
- A high Free Cash Flow Margin shows that a company converts a high proportion of its revenue into free cash flow.
- This can provide greater financial flexibility for dividends, share buybacks, debt repayment, or investments.
- The Free Cash Flow Margin ex SBC additionally accounts for potential shareholder dilution from stock-based compensation.
- The long-term trend is particularly important. Declining margins can, for example, result from higher investments, changes in working capital, or weaker operating performance.
📘 Equity Ratio
📈 What is it?
The equity ratio indicates what portion of a company’s total assets is financed by shareholders’ equity – in other words, how much it relies on its own capital.
🧮 How is it calculated?
🏛️ Why is it important?
A high equity ratio reflects financial strength and stability, especially during downturns. It’s a key indicator of a company’s solvency and long-term risk profile.
🧮 Calculation
🎯 What does this mean for investors?
- Companies with high equity ratios are generally more resilient and less dependent on external debt.
- Low equity ratios can signal higher risk or aggressive financial strategies.
- Important: Always assess the equity ratio in combination with the return on equity (ROE). This shows not just how stable the company is – but also how efficiently it uses shareholder capital.
📘 Return on Equity (ROE)
📈 What is it?
Return on equity (ROE) shows how efficiently a company uses its shareholders’ equity to generate profit. In other words: how much net income is earned per dollar of equity.
🧮 How is it calculated?
🏛️ Why is it important?
ROE is a core profitability metric. It helps investors understand whether a company delivers attractive returns on the capital provided by its shareholders.
🧮 Calculation
🎯 What does this mean for investors?
- A high ROE indicates that the company is using its capital efficiently and profitably.
- It’s especially meaningful for capital-intensive businesses or firms with high equity bases.
- Important: A very high ROE can also result from high debt levels – always interpret it alongside the equity ratio to assess financial health.
📘 Return on Capital Employed (ROCE)
📈 What is it?
ROCE measures how efficiently a company generates profits from its total capital – including both equity and interest-bearing debt.
🧮 How is it calculated?
It evaluates the return on all capital employed, regardless of how it’s financed.
🏛️ Why is it important?
ROCE is ideal for comparing companies with different financing structures. It shows how well management uses capital to create value for both shareholders and creditors.
🧮 Calculation
🎯 What does this mean for investors?
- A high ROCE means the company uses its capital efficiently – regardless of whether it's funded by debt or equity.
- The higher the ROCE compared to peers, the more value the company creates with its invested capital.
- Especially relevant for capital-intensive sectors like industrials, energy, or infrastructure.
📘 Return on Invested Capital (ROIC)
📈 What is it?
ROIC measures how efficiently a company generates returns from the capital invested in its core operations – regardless of whether the capital comes from equity or debt.
🧮 How is it calculated?
- NOPAT = Net Operating Profit After Taxes
- Invested Capital = Operating assets minus non-interest-bearing liabilities
🏛️ Why is it important?
ROIC is one of the most accurate indicators of capital efficiency. Unlike return on equity, it is not distorted by leverage and shows how much value is created for all capital providers.
🧮 Calculation
🎯 What does this mean for investors?
- A high ROIC shows how effectively a company uses the capital that is truly invested in its core operations.
- Unlike ROCE, ROIC focuses only on the capital that is actively used to run the business – and that requires a return (i.e. interest-bearing).
- Especially useful when comparing companies with large amounts of excess cash or non-interest-bearing liabilities – giving a more realistic picture of capital efficiency.
📘 Leverage Ratio (Debt-to-Equity)
📈 What is it?
The leverage ratio indicates how much a company relies on interest-bearing debt (such as loans and bonds) relative to its shareholders’ equity.
🧮 How is it calculated?
🏛️ Why is it important?
This ratio helps assess a company’s financial structure and risk profile. High leverage can enhance returns – but also increases exposure to interest rate changes and financial stress.
🧮 Calculation
🎯 What does this mean for investors?
- A low leverage ratio signals financial strength and independence.
- A higher ratio can improve returns in good times but increases risk during downturns or rising interest rate periods.
- 👉 Always interpret in the context of industry, capital intensity, and interest rate environment.
📘 SBC | in % Revenue
📈 What is it?
SBC (Stock-Based Compensation) refers to equity-based compensation granted by a company to its employees and executives. The percentage shows SBC relative to revenue.
🧮 How is it calculated?
SBC as % of Revenue = (SBC ÷ Revenue) × 100
🏛️ Why is it important?
Stock-based compensation is a real cost factor for shareholders. It can increase the number of shares outstanding and therefore dilute existing shareholders. The percentage of revenue shows how heavily a company relies on equity-based compensation and how significant this form of compensation is relative to the size of the business.
🧮 Calculation
🎯 What does this mean for investors?
- A lower figure is generally positive: Stock-based compensation is relatively small compared with the company's revenue.
- A high figure can indicate greater reliance on stock-based compensation and a higher potential risk of dilution. However, it is also important to consider whether the company offsets dilution through share buybacks.
- The trend over time should also be considered. A high but declining percentage presents a different picture from a persistently high or increasing percentage.
- A single-digit SBC-to-revenue ratio is not unusual among many growth-oriented and technology companies.
📘 SBC as % of FCF
📈 What is it?
SBC (Stock-Based Compensation) refers to equity-based compensation granted by a company to its employees and executives. The percentage shows SBC relative to free cash flow (FCF).
🧮 How is it calculated?
SBC as % of FCF = (SBC ÷ Free Cash Flow) × 100
🏛️ Why is it important?
Stock-based compensation is a real cost factor for shareholders. It can increase the number of shares outstanding and therefore dilute existing shareholders. The percentage of free cash flow shows how significant SBC is relative to the cash generated by the company. Since SBC is non-cash compensation, it is typically not deducted as a cash outflow when calculating FCF.
🧮 Calculation
🎯 What does this mean for investors?
- A lower value is generally favorable. Stock-based compensation is relatively small compared with the company's cash generation.
- A high value means that SBC represents a significant portion of the company's reported free cash flow, even though SBC itself is non-cash.
- The higher the value, the more significant SBC can be as an economic cost to shareholders, particularly when it results in share dilution.
📘 SBC Growth 1Y
📈 What is it?
SBC Growth 1Y shows how much a company's stock-based compensation has changed compared to the previous year.
🧮 How is it calculated?
🏛️ Why is it important?
SBC Growth shows whether stock-based compensation is becoming more or less significant for shareholders. If SBC increases significantly, it can lead to greater shareholder dilution over time. At the same time, SBC is a non-cash expense that reduces earnings on the income statement but is added back in the cash flow statement.
🧮 Calculation
🎯 What does this mean for investors?
- A high positive value is generally negative, as rising SBC can increase the burden on shareholders, particularly through potential dilution.
- What matters is whether the development of SBC is sustainable over the long term. Some level of SBC is common among many growth and technology companies.
📘 Share Count Growth 1Y
📈 What is it?
Share Count Growth 1Y shows how much the number of shares outstanding has increased or decreased over a one-year period.
🧮 How is it calculated?
🏛️ Why is it important?
The number of shares determines how many shares the company's earnings and assets are distributed across. If the share count decreases, existing shareholders' relative ownership increases. If it increases, existing shareholders are diluted. The metric therefore makes dilution and share buybacks directly visible.
🧮 Calculation
🎯 What does this mean for investors?
- A negative value is generally positive, as the number of shares outstanding is decreasing.
- A positive value indicates dilution of existing shareholders.
- A declining share count is not automatically positive: It also matters at what price the shares are repurchased and how the buybacks are financed.
📘 Shareholder Yield
📈 What is it?
Shareholder Yield measures how much capital a company returns to shareholders or uses to reduce debt relative to its market capitalization. It goes beyond dividend yield by also including share buybacks and debt reduction.
🧮 How is it calculated?
🏛️ Why is it important?
Dividend yield only tells part of the story. Companies can also return capital through share buybacks, while reducing debt can strengthen the balance sheet. Shareholder Yield combines all three components into one metric, giving investors a broader view of how a company uses its capital.
🧮 Calculation
🎯 What does this mean for investors?
- A higher Shareholder Yield generally indicates more capital being returned to shareholders or used to reduce debt.
- The mix matters: dividends, buybacks, and debt reduction can affect shareholders in different ways.
- Share buybacks are most beneficial when shares are repurchased at attractive valuations.
- Investors should also consider whether dividends, buybacks, and debt reduction are sustainable over time.
📘 Earnings per share (EPS)
📈 What is it?
Earnings per Share (EPS) shows how much profit is attributable to a single share – and is one of the most important metrics for evaluating a company's performance.
🧮 How is it calculated?
The diluted share count reflects potential new shares that could be issued through options, convertible bonds, or other rights.
🏛️ Why is it important?
EPS is the basis for many key valuation metrics like P/E ratio, PEG ratio, or payout ratio. It enables comparisons of profitability across companies, regardless of their size.
🧮 Calculation
🎯 What does this mean for investors?
- EPS captures per-share profitability and is especially useful for comparisons over time or with analyst estimates.
- Rising EPS may signal consistent growth or share buybacks.
- Important: Always use diluted EPS for more realistic valuations – especially in companies with stock-based compensation.
📘 Free cash flow per share (FCF per share)
📈 What is it?
Free Cash Flow per Share shows how much free cash flow a company generates per outstanding share – after investments, but before dividends or debt repayments.
🧮 How is it calculated?
Free cash flow is calculated as operating cash flow minus capital expenditures (CapEx).
🏛️ Why is it important?
FCF per Share reveals how much real cash is available per share – useful for dividends, buybacks, or reducing debt. Unlike net income, free cash flow is harder to manipulate and often seen as a more reliable metric.
🧮 Calculation
🎯 What does this mean for investors?
- High FCF per share signals strong financial flexibility.
- It shows how much capital the company can effectively reinvest or return to shareholders.
- Particularly relevant for dividend payers and capital-efficient businesses.
📘 Short interest
📈 What is it?
Short interest indicates how many shares of a company are currently sold short – that is, borrowed and sold by investors who expect the price to decline.
🧮 How is it calculated?
It reflects the percentage of a company’s shares that are being shorted relative to the total shares available.
🏛️ Why is it important?
Short interest serves as a sentiment indicator: A high value may signal skepticism or bearish expectations – but also increases the potential for a short squeeze if prices rise unexpectedly.
🧮 Calculation
🎯 What does this mean for investors?
- Low short interest usually indicates market confidence in the company.
- High short interest can be a warning sign – or an opportunity if sentiment shifts.
- Especially relevant in volatile markets or ahead of key earnings releases.
📘 Employees
📈 What is it?
The employee count shows how many people a company employs worldwide – offering insights into its size, structure, and business model.
🧮 How is it calculated?
🏛️ Why is it important?
It helps assess operational scale, labor intensity, and cost structure. Combined with revenue and profit, it enables key metrics like revenue per employee or productivity.
🧮 Calculation
🎯 What does this mean for investors?
- A high headcount can signal operational complexity – but also significant growth capacity.
- Revenue per employee is a key indicator of efficiency.
- Especially useful for comparing tech, industrial, or service-heavy companies.
📘 Revenue per employee
📈 What is it?
Revenue per employee indicates how much revenue a company generates on average per employee – a key measure of efficiency and productivity.
🧮 How is it calculated?
The employee count is typically taken from the most recent annual report.
🏛️ Why is it important?
This metric helps compare business models – especially between labor-intensive and technology-driven companies. A high value suggests automation, operational efficiency, or strong value creation per head.
🧮 Calculation
🎯 What does this mean for investors?
- A high revenue per employee indicates a scalable and margin-strong business model.
- A low figure may reflect labor-intensive operations or lower value-add.
- Especially helpful when comparing tech companies to industrial or service sectors.
Nature's Sunshine Products, Inc. Stock Analysis
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Nature's Sunshine Products, Inc. — Q2 2026 Earnings Call
1. Management Discussion
Good afternoon everyone and thank you for participating in today's conference call that for Nature's Sunshine financial results for the second quarter ended June 30, 2026. Joining us today are Nature's Sunshine's Chief Executive Officer; Ken Romanzi, Chief Accounting Officer, Jon Lanoy and General Counsel, Nate Brower. Following their remarks, we'll open the call for analyst questions. Before we go further, I would like to turn the call over to Mr. Brower as he reads the company's safe harbor statement within the meaning of the Private Securities Litigation Reform Act of 1995 and that provides important cautions regarding forward-looking statements. Nate, please go ahead.
Thank you, Ludy. Good afternoon, and thanks for joining our conference call to discuss our second quarter 2026 financial results. I'd like to remind everyone that this call is available for replay via telephonic dial-in through August 20 and via a live webcast that will be posted in the Investor Relations portion of our website at ir.naturesunshine.com. The information on this call contains forward-looking statements.
These statements are often characterized by terminologies such as believe, hope, may, anticipate, expect, will and other similar expressions. Forward-looking statements are not guarantees of future performance, and the actual results may be materially different from the results implied by forward-looking statements.
Factors that could cause the results to differ materially from those implied herein include, but are not limited to, those factors disclosed in the company's annual report on Form 10-K quarterly reports on Form 10-Q, our earnings release issued today and other reports filed with the Securities and Exchange Commission.
The information on this call speaks only as of today's date. And the company disclaims any duty to update the information provided herein. Now I would like to turn the call over to the CEO of Nature's Sunshine, Ken Romanzi. Ken?
Thank you, Nate, and good afternoon, everyone. Thank you for joining our second quarter earnings call. I'm pleased to report that we delivered a solid second quarter, growing sales 4% in constant currency reflecting continued momentum across our key strategic initiatives. Our sales growth was driven by nearly all our geographic regions, led by 5% growth in Asia Pacific, driven by strong consultant engagement. And in North America, where digital sales increased 26%, fueled by continued momentum with new and returning customers.
Growth was supported by continued customer acquisition expansion of our digital capabilities, increased adoption of our Autoship subscription programs and solid consultant growth. Strong execution, disciplined cost management and ongoing productivity initiatives also drove further gross margin expansion. The second quarter marked the beginning of our investments and our vision for growth. That's our name for our strategic plan to accelerate our longer-term growth rates.
These investments include continued expansion of our digital business, enhanced digital tools for our consultant base, deeper penetration of existing markets and expansion into new markets. We believe these investments, combined with our strong business model and disciplined execution, will lead to sustainable accelerated long-term growth.
I will update you on the progress we have made in developing our vision for growth a bit later in the call, after our Chief Accounting Officer, Jon Lanoy, provides the details of our Q2 performance. Jon?
Thank you, Ken. Net sales in the second quarter were $117 million, representing our strongest second quarter in company history, this represents a 2% increase versus the year ago quarter or a 4% increase, excluding the impact of foreign exchange rates. We experienced growth in all key regions across the globe. Total Asia Pacific sales grew 1% year-over-year to $30 -- to $53 million or 5% growth on a constant currency basis.
While strong, our growth in APAC was lower than we expected. On the one hand, we saw outstanding growth in Japan of 50%. On the other hand, we experienced weakness in China, down 20%, a reversal from its recent growth trend of over 30% over the past year due to a few operational issues.
We believe these issues are short term in nature that we will work through in the second half of the year, but this does not shake our confidence in China's continued long-term growth potential. Excluding China, where we market the Nature's Sunshine brand, our Synergy Eagle system sales and APAC continued strong momentum, growing 11% versus last year.
In North America, Q2 sales grew 3% year-over-year to $36 million bringing sales growth to 6% through the first half of the year. During the quarter, we continued to see strong growth in our digital business, increasing 26% year-over-year. Within digital, new customers were up 26% in the quarter with Autoship accounting for 36% of total orders coming through our website. In addition, our social commerce business within digital continued to show strong growth up 177% with subscription auto shipment this channel making up 60% of total social commerce revenue.
Continued improvement in this metric is a leading indicator for future growth and profitability since the lifetime value of customers that utilize subscription autoship is more than 3x higher than other customers. We are also pleased with the continued strength in our European business, where Q2 sales increased 4%, versus the prior year to $26.7 million. These solid results were driven by 12% growth in Eastern Europe. This strength has been fueled by improved product availability as we work to ensure appropriate in-stock levels for our key products where we see high demand despite the continued unrest in the region.
Turning to gross margin. We increased nearly 200 basis points to 73.7%, the highest gross margin we've seen in our over 4 years. This improvement represents the benefit of our ongoing initiatives, which includes renegotiating logistics contracts, improved manufacturing efficiency, improved sourcing and more disciplined pricing.
We expect gross margins are likely to average around the mid -- low to mid 73% range through the remainder of 2026. Volume incentives as a percentage of net sales were 30.6% compared to 29.9% versus a year ago, primarily due to changes in market mix. SG&A expenses during the second quarter were $44.9 million compared to $43.7 million a year ago. As a percentage of net sales, SG&A expenses were 38.4% for the second quarter compared to 38.1% a year ago. The growth in SG&A is a result of our investment to fuel our vision for growth. As discussed last quarter, we expect quarterly SG&A to continue in the range of $45 million to $47 million for the remainder of the year as we continue to ramp up these initiatives.
Adjusted EBITDA, as defined in our earnings release, was $11.3 million, up nearly 1% as we begin to implement our strategic our planned strategic initiatives. Our balance sheet remains clean with cash and cash equivalents of $82.5 million and 0 debt. Net cash used by operating activities was $1.1 million compared to cash provided of $6.9 million in the prior year period.
We repurchased 113,000 shares for approximately $2.5 million or $22.55 per share during the 6 months ended June 30, 2026, leaving $14.8 million remaining in our share repurchase program.
Looking beyond share repurchases, our healthy capital allocation structure positions us well to continue our digital transformation and other strategic initiatives.
Turning to our 2026 outlook. Due to recent changes in exchange rates and our slowdown in China, we are lowering our previous guidance to $490 million to $500 million in net sales from $500 million to $515 million or year-over-year growth of 2% to 4%, respectively.
In addition, we are lowering our guidance for EBITDA to $48 million to $52 million from $50 million to $54 million. Overall, we believe the business is well positioned to capitalize on current opportunities in a growing market and remain very optimistic about our ability to continue to unlock substantial growth prospects that we see.
The strategic initiatives we've been implementing are working, we are confident in our ability to continue to growth in sales, profitability and free cash flow. Now I'll turn the time back over to Ken for some further commentary.
Thank you, Jon. I'd like to publicly acknowledge Jon today for his terrific service in Nature Sunshine keeping our financial house in order as we operated this past quarter with out of Chief Financial Officer. Jon's deep experience, leadership and strong relationships throughout our company allowed us to continue seamlessly at the Shane Jones departure in June.
As I hope you saw from our press release earlier today, we have appointed Ruth Perkins as Nature Sunshine's Chief Financial Officer. Ruth brings a wealth of financial leadership experience from blue-chip consumer product companies, such as Ford, Estee Lauder and PepsiCo. As the financial leader of Estee Lauder's entire $10 billion supply chain and head of PepsiCo's $26 billion North American beverage finance organization, ruth will bring a tremendous amount of leadership to Nature's Sunshine as we scale our business to achieve our vision for growth. Ruth will be returning to our home state of Utah to join us effective September 1.
We also announced earlier this week that we appointed Janine Weber as our new President of North America, effective August 10.
Janine is a 25-year veteran of the direct selling industry, most recently as President of North America for LifeWave; and former Vice President of Sales North America and General Manager of Canada for Rodan and Fields. She was a key player in that company to $1 billion in sales, making it at the time though #1 skin care company in the United States.
Janine's leadership will be critical as we plan to reinvent our direct selling system in North America as part of our vision for growth. We have set long-term goals for our vision for growth to double the size of the company to $1 billion in sales and improve our EBITDA margin to 15% from its currently just north of 10%. There are 4 key growth drivers of our vision.
They are: number one, continued digital channel expansion; two, geographic penetration and geographic expansion, three, superior marketing and product innovation; and lastly, for mergers and acquisitions. Now we don't know when that might be, but we are on the lookout for accretive acquisition opportunities that would complement our portfolio and strategic objectives.
Our first growth driver is to continue digital expansion. We could not be happier in the growth of our digital business. which is on track to deliver $50 million in sales by the end of this year, just 5 years after launching it. Our vision for growth includes expanding the digital channels in the U.S. as well as evaluating opportunities outside the U.S.
Our second growth driver is deeper geographic penetration and geographic expansion. What I mean by deeper penetration, I'll give you 2 examples. First, Japan, where we are largely a Tokyo-based business, but have recently opened up a base in the southern Japanese city of Fukuoka, which is driving tremendous growth with plans for another city -- another opening in another city in 2027.
Secondly, in the United States, we are planning a complete revigoration of our direct selling system beginning in early 2027, while we're encouraged by our recent growth in digital channels in the U.S., our direct selling business has been under pressure for quite some time. However, we believe we can have a thriving direct-to-consumer digital business in addition to a growing and thriving direct selling business. We will share more of our plans for Nature's Sunshine in the U.S. in the near future, and we are very fortunate to have Janine Webber on board to help lead this effort. Regarding geographic expansion, our launch in Germany is underway earlier this year, and we have plans to open a new Asian country through our very strong Eagles synergy system that operates in Japan, Taiwan and Korea sometime in 2027 pending government approvals.
And lastly, while we do sell some synergy in the United States, we're really treating it as a brand new country for expansion and the only 1 in the world where we will market both Nature's Sunshine and Synergy. These new countries will not be a significant portion of our business in the first year or 2 of expansion, but they are key components in our vision for growth to $1 billion in sales.
Superior marketing and product innovation is our third key growth driver. This fall, we will be launching our new Nature Sunshine consumer campaign called Live on the Bright Side, which beautifully expresses the brand's unique point of difference in this crowded marketplace of nutritional supplements. And our new product pipeline is full with several new product launches planned for this fall and early 2027. We will share these with you as we get closer to their launch dates. And last but not least, we plan to have M&A help us drive to our $1 billion goal. But as I mentioned earlier, we cannot predict when we will execute an acquisition, opportunities a crossing our desk daily, and we will make sure we evaluate and make the right choice.
In summary, I could not be happier with the leadership team we have built at Nature's Sunshine and with all the opportunities to accelerate our growth. We believe the sun has never shined brighter for Nature Sunshine. We have our sights firmly set on $1 billion in sales. And with our vision for Growth strategic plan, we believe we can achieve it.
Thank you for your time and attention today and your continued support of Nature's Sunshine. I'd now like the call to turn back to the operator for questions. Operator?
Thank you. Ladies and gentlemen, we will now begin the question-and-answer session. [Operator Instructions]
Your first question comes from the line of Susan Anderson with Canaccord Genuity.
2. Question Answer
Nice job in the quarter. I wanted to ask maybe just how -- it sounds like the e-commerce business in North America continued to be strong. I guess -- maybe if you could give some more color just around the core business as well and how it performed. And then I think you guys also had a new launch in Germany. Just curious how that's going?
You want to talk about core in North America -- just to North America -- in total, North America was up -- which we have 2 numbers in constant dollars, FX dollars about 3% in total North America. And our base direct selling business actually has been soft for several years. And so our digital business continues to perform really well. And a major juncture going forward is early next year, we'll be doing a whole new reinvigoration of our direct selling program, including new product, new compensation plan, new incentives and to really get what is still a very large core business growing as well. So continued digital expansion in the U.S. as well as a reinvigorated direct selling business and 1 of our largest countries is a big factor in improving our growth rates going forward.
And regarding Germany, we just started in Germany. I think we mentioned last time, we'll do maybe $1 million in Germany this year. But that's where we have to start, right? It's -- these are not overnight successes. They grow over time. I know that over a 6-year period of time, Taiwan, we always look at Taiwan, an example, it went from $2 million to over $65 million in like a 5-year time frame. But it had to start at 0, then 1 then 2 and then it ramps up. So we're hoping that Germany can be tens of millions of dollars in size. It's the largest direct selling market in Europe. It's the largest supplement market in Europe. And so we are recruiting leaders as we speak.
I think we're bringing on 150 consultants a month there right now. So it's -- it was just a big summit meeting in Berlin where 400 people paved their own way to learn about opportunities to join Nature's Sunshine as an independent consultant. So we are in the process of ramping up.
Okay. Great. And then also, maybe if you could give some color just on the brands and products that drove the growth in each region. And I guess were there any standouts that you could call out?
So just to make sure everybody knows the detail in our brand makeup. So Nature's Sunshine is our brand in really North America, South America, Latin America as well as in Europe, Central and Eastern Europe, and China. Synergy is our brand in the rest of Asia, so Taiwan, Korea and Japan, as well as a little bit of Western Europe, which is a very, very small market for us. .
So when we talk about APAC growth, most of the growth and most of the business is synergy in those 3 countries, Taiwan, Korea and Japan. And synergy is really I mean it's just been -- the APAC has been on a roll for a long time. That system was up 11% in the second quarter, continued strong growth across the countries. And it's really core products that have been around for a long time. They have a formula and they just keep replicating and duplicating that formula.
And they have recently launched a skin care line, which is contributing to growth. And it's actually one of the product lines that they're really going to try to make a significant portion of their business going forward.
It's right now small single digits as a percentage of total sales. but all of our country managers looking at their long-range plans recently, all of them are going to try to make it a significant piece of their -- so like 10%, 15%, even 20% of their sales over kind of a 3- to 5-year time frame.
In the Nature's Sunshine, I can't really talk about any 1 specific part. We have so many products. So it's just the amalgamation of all of our products growing. Our biggest kind of product category in North America both in our direct selling and our digital direct-to-consumer business, most of our core business has really gut health, so it's really our gut health products and our gut health systems that are still the top sellers in those -- in the Sunshine areas.
Okay. Great. 1 for me, when you mentioned M&A at the end there. I guess when you think about M&A, if you could maybe just give some thoughts around what type of acquisitions you would be looking to tack on? Do you want to stay within wellness supplements, are there certain regions that you're looking at of the world? And then also, are you focused on DTC brands? Or how should we think about that?
Number -- so we're very, very clear. That's why we're going to be very, very selective. Number one, we are going to be in the supplement business. it will be something that we can absorb in our supply chain. That is a very critical factor. We have excess capacity in our manufacturing facility, so we will be looking at something that we can fold into our manufacturing facility so that we can generate all the self-manufacturing margin and the synergies that come along with that.
We would prefer to be diversified in terms of our business mix, whether that be more direct-to-consumer, even retail or geography. While we love our direct selling business, we're not looking to add another one, but that's not out of the question. It really is the product and the product form and a category that we believe, and that have growth potential but first and foremost, 1 that we could easily complementary bring it into our system, and that's where we can make it the most accretive from an earnings standpoint and value creation standpoint.
Supplements, self-manufacture, diversification of business and a product and a category that we think have growth potential.
And I'm showing no further questions at this time. I would like to hand it back to the management for closing remarks.
We just want to thank everybody for their time and attention and continued support in Nature's Sunshine and look forward to reporting on our vision for our vision -- our progress on our vision for growth as we go forward. Thank you, Lindy.
Thank you. And ladies and gentlemen, this concludes today's conference call. Thank you all for joining. You may now disconnect.
Nature's Sunshine Products, Inc. — Q2 2026 Earnings Call
Nature's Sunshine Products, Inc. — Q1 2026 Earnings Call
1. Management Discussion
Thank you, Marissa. Good afternoon, and thanks for joining our conference call to discuss our first quarter 2026 financial results. I'd like to remind everyone that this call is available for replay via telephonic dial-in through May 21 and via a live webcast that will be posted in the Investor Relations portion of our website at ir.naturesunshine.com. .
The information on this call contains forward-looking statements. These statements are often characterized by terminologies such as believe, hope, may, anticipate, expect, will and other similar expressions. Forward-looking statements are not guarantees of future performance, and the actual results may be materially different from the results implied by forward-looking statements.
Factors that could cause the results to differ materially from those implied herein include, but are not limited to, those factors disclosed in the company's annual report on Form 10-K quarterly reports on Form 10-Q, our earnings release issued today and other reports filed with the Securities and Exchange Commission. The information on this call speaks only as of today's date and the company disclaims any duty to update the information provided herein. Now I would like to turn the call over to the CEO of Nature's Sunshine, Ken Romandy. Ken?
Thank you, Nik. And good afternoon, everyone. Thank you for joining our first quarter earnings call. I'm very pleased to report that we delivered a very strong first quarter, growing sales 9% and EBITDA 33% and reflecting continued momentum across our key strategic initiatives.
We generated sales growth across all regions, led by North America with over 9% constant currency growth. driven by our digital channel strategy with strong engagement from both new and returning customers. A healthy increase on our active consultants across the globe also drove solid growth.
Our first quarter performance underscores our focus on disciplined execution, strengthening consultant and customer acquisition, expanding our digital capabilities accelerating adoption of our Autoship subscription programs and improving gross margin.
As we look ahead, we are confident that the key strategies of our vision for growth will drive accelerated, sustainable growth and long-term shareholder value. I will update you on the progress we've made in developing our vision for growth, a bit later in the call. After our CFO, Shane Jones, provides the details of our strong Q1 performance. Shane?
Thank you, Ken. We are very pleased to report another outstanding quarter with growth in constant currency terms across all our business units, North America, Asia, Europe and Latin America. This growth continues to be bolstered by our expansion into new digital channels, strong adoption of our subscription auto ship programs exceptional new customer acquisition and strong partnerships with our independent consultants across the globe.
Our efforts to modernize the business, expand digital capabilities and strengthen engagement with both our customers and our independent consultants continue to drive momentum in the business.
Now diving into specific financial performance. Net sales in the first quarter was $122.9 million, representing our strongest first quarter in company history and our third largest quarter ever. This represents a 9% increase versus the year ago quarter or a 7% increase excluding the impact of foreign exchange rates.
Growth was driven by continued acceleration in North America, combined with strength in Asia Pacific and Europe. We continue to closely monitor the geopolitical tensions in Iran, given the expected impact on inflation and potential short-term impact on consumer buying patterns.
However, as of yet, consumer demand remained strong as reflected in the robust sales growth that we're seeing. Looking at our results in more detail, starting with regional performance. In North America, we are building strong momentum driven by rapid growth in digital, while maintaining our core business across specialty retailers, practitioners, affiliates and independent consultants.
Q1 sales grew 9% and year-over-year to $38.3 million, our best growth in over 5 years. Our digital business continues to produce very robust year-over-year growth, increasing 42% in Q1. This was fueled by continued strength in customer acquisition, coupled with robust adoption of our subscription Autoship program, leading to better retention and frequency from returning customers.
Similar to the exceptionally strong growth that we've seen over the last several quarters, new digital customers increased 60% in Q1. We Likewise, subscription auto ship continued to perform very well in Q1, accounting for 48% of the digital sales coming through our website.
As we've highlighted before, continued improvement in this metric is a leading indicator for future growth and profitability since the lifetime value of customers that utilize subscription auto ship is more than 3x higher than other customers.
We're also very excited about the growth of our social commerce business within digital. While still relatively small, in Q1, this business grew triple digits year-over-year. Also, while subscription auto ship in this channel just launched in the second half of last year, it already makes up 23% of total social commerce revenue.
We are excited to see the fundamentals of this business continue to move in the right direction, validating the strategic investments we are making and strengthening our confidence that we will meet and exceed the goals we have set.
As we've said many times, digital momentum is a key component of our broader transformation and represents an important long-term growth lever for our business.
Given the very strong momentum in digital, we expect continued mid- to high single-digit revenue growth in North America throughout 2026.
Moving to our business in Asia Pacific. Sales grew 7% year-over-year to $52.2 million or 6% growth on a constant currency basis. This performance was driven by outstanding execution in China, Japan and Korea, where sales increased 40%, 16% and 14%, respectively, excluding the impact of foreign exchange.
As outlined in our last earnings call, the turnaround in China has been driven by very strong adoption of our subscription Autoship program, which has grown from nothing at this time last year to more than 25% of total revenue today, combined with a double-digit increase in independent consultants.
During Q1, these fundamental drivers were combined with a strong response to our field activation efforts yielding exceptional results. While we continue to be encouraged regarding the fundamentals of the China business, the 40% growth seen in Q1 is unlikely to be repeated in the coming quarter.
The double-digit growth seen in Japan and Korea during Q1 and came as a result of a very successful launch of our Lumara skin care products, along with strong year-over-year increases of independent consultants. We are very pleased with the commitment and strong execution from our independent consultants in these markets and believe that our focused, differentiated products, along with our knowledgeable, passionate consultants position us well for continued growth in the APAC region.
We're also pleased with the continued strength in our European business, where Q1 sales increased 9% and versus the prior year to $26.4 million or 6% growth on a constant currency basis. These outstanding results were driven by 11% growth in Eastern Europe in local currency terms.
The strength in Eastern Europe has been fueled by improved product availability as we have worked to ensure appropriate in-stock levels for our key products where we see high demand. This improvement was combined with outstanding execution from our independent consultants and some economic stabilization in the region.
This remarkable growth is a testament to the perseverance and commitment of our staff in that area, given the continued war in the region. For the remainder of 2026, we expect continued mid-single-digit growth in Europe.
Now turning to gross margin. We continue to build on the progress we've made over the past several quarters as gross margin increased 116 basis points to 73.2% compared to 72.1% a year ago.
This improvement represents the benefit of our ongoing gross margin initiatives and favorable market mix. These initiatives include renegotiating logistics contracts, better conversion costs through improved manufacturing efficiency, improved sourcing, more disciplined pricing and other cost-saving measures.
Despite some uncertainty regarding the short-term impact of the situation in Iran on inflation, we still anticipate continued modest improvement in gross margin. Therefore, during 2026, a gross margins are likely to average around 73%, which represents a significant step up from where we've been historically.
Volume incentives as a percentage of net sales were 30% compared to 30.8% in the year ago quarter. The decrease was primarily due to the strong growth in our digital business as well as changes in market mix. Selling, general and administrative expenses during the first quarter were $43.5 million compared to $40.6 million in the year ago quarter.
As a percentage of net sales, SG&A expenses were 35.4% for the first quarter compared to 35.8% a year ago. The $3 million increase versus prior year was primarily related to variable cost associated with the sales increase and compensation costs.
While Q1 spend was less than the quarterly SG&A range communicated last quarter due to the timing of certain strategic investments, we expect quarterly SG&A of $45 million to $47 million for the remainder of the year as we ramp up these initiatives.
Operating income increased 53% and to $9.5 million or 7.8% of net sales compared to $6.2 million or 5.4% of net sales in the year ago quarter. GAAP net income attributable to common shareholders for the first quarter was $5.1 million or $0.28 per diluted common share compared to $4.7 million or $0.25 per diluted common share in the year ago quarter.
Adjusted EBITDA, as defined in our earnings release, increased 33% to $14.6 million compared to $11 million in the year ago quarter. The increase was primarily driven by the growth in sales and improvement in gross margin.
Our balance sheet remains clean with cash and cash equivalents of $87.6 million at 0 debt. Inventory decreased to $67.1 million at the end of the first quarter, a $1.2 million decrease versus Q4 last year. We expect to see a moderate increase in inventory during 2026 to ensure appropriate in-stock levels and fulfill continued strong demand.
Net cash used by operating activities was $1.8 million compared to cash provided of $2.6 million in the prior year period. We repurchased 20,000 shares for approximately or $24.54 per share during the first quarter ended March 31, 2026, with $16.9 million remaining on our share repurchase program. Looking beyond share repurchases, our healthy capital allocation structure positions us well to continue our digital transformation and other strategic initiatives.
Now turning to our 2026 outlook. We are reiterating the guidance issued last quarter, expecting full year 2026 net sales to range between $500 million and $515 million compared to $480 million for 2025.
This equates to year-over-year growth of 4% to 7%. For adjusted EBITDA, we are guiding to a range of $50 million to $54 million representing year-over-year growth between 1% and 9%. This incorporates a cautious stance regarding the potential impact of the Iran conflict on both demand and cost.
Also, as communicated previously, this guidance includes measured investments to improve our technology infrastructure, drive further customer acquisition, advanced geographic expansion, expand penetration in existing markets and accelerate product innovation.
These investments will ramp in Q2 and Q3 of this year, thereby temporarily reducing the double-digit EBITDA growth rate seen historically and in Q1 2026. We continue to see strong momentum in the business, and believe that now is the time to make these key investments in order to position the company for sustained rapid growth in 2027 and beyond.
Overall, we believe the business is well positioned to capitalize on current opportunities in a growing market and remain very optimistic about our ability to continue to unlock the substantial growth prospects that we see.
The strategic initiatives we've been implementing are working, and we're confident in our ability to continue to accelerate growth in sales, profitability and free cash flow. Now I'll turn it back to Ken for some further commentary.
Thank you, Shane. Well done. As I reviewed on our earnings call last quarter, Nature's Sunshine has a very strong foundation, driving today's results and 1 upon which we can build an accelerated vision for growth. The key pillars of this foundation include 2 very strong brands, steeped and heritage in quality. .
Nature Sunshine and Synergy operating in a large global and rapidly growing category of natural health supplements, a globally diverse business operating in over 40 countries around the world exceptional product development capabilities, sourcing and blending hundreds of nature's best ingredients from around the world and scientifically verifying their effectiveness.
An army of independent consultants, passionately representing our products every day around the world, a rapidly growing digital business, penetrating new channels driven by a subscription model that enables consistent recurring revenue streams, a rock-solid balance sheet with nearly $100 million in cash and no debt.
And last but not least, a passionate, mission-driven organization dedicated to elevating people's lives globally through improving their health and economic well-being while delivering industry-leading results for our shareholders.
To build upon this foundation, we have developed what we call Nature's Sunshine vision for growth. with the goals of doubling our sales to $1 billion and to leverage our infrastructure to achieve a 15% EBITDA margin over time.
The key elements of our Vision for Growth plan include: one, continued rapid expansion of our digital business; two, explore distribution in select U.S. brick-and-mortar retail channels working in a complementary and harmonious manner with our existing business; three, deeper penetration in our direct selling markets.
The U.S. and China, the world's largest consumer markets are 2 markets where we see terrific opportunities. For example, our Asian brand synergy is very small in the U.S. but rapidly growing. So we are doubling down to expand U.S. synergy distribution as a key growth driver. Four, expansion into new high-value markets. This year, we will enter Germany, our largest new market that we've entered since China in 2016. And the largest supplemental supplement market in Europe.
Looking ahead, we plan to expand to attractive new Asian markets utilizing our very powerful Synergy Asia sales system. Five, we will drive growth through sharper brand positioning and product innovation behind both Nature's Sunshine and Synergy brands. Our new product pipeline is very strong over the next 2 years and we will share the details of these new product launches as their launch dates draw near.
Six, leveraging our supply chain for scale efficiency with excess capacity in our manufacturing facility, we can drive higher variable margins with volume growth. In addition, we'll be investing in automation to drive further efficiencies.
And lastly, 7, with nearly $100 million in cash and a debt-free balance sheet, we are well positioned to pursue bolt-on accretive acquisitions and to leverage efficiencies in our manufacturing plant.
By executing this vision for growth, we believe $1 billion in sales is within our grasp. We believe the sun has never shined brighter for Nature's Sunshine, and I look forward to sharing more about our vision for growth in the near future.
Thank you for your time today and your continued support of nature of Sunshine. I would now like to turn the call back to the operator for questions.
Thank you, sir. Ladies and gentlemen, we will now begin the question-and-answer session. [Operator Instructions] And your first question comes from Susan Anderson with Canaccord Genuity.
2. Question Answer
Nice to see another really strong quarter. Maybe if you can talk about the 15% EBITDA margin longer term. I'm just curious if you could give us an idea of the building blocks to kind of get there, I guess, how much driven by gross margin expansion versus SG&A leverage? Or should we think about it as kind of being equal between the 2?
I'll let Shane -- Susan, great to hear your voice, and I hope we'll catch up soon personally. I'll give you a general answer, and then Shane has got a got a very -- a latter approach to how we're going to do this.
It's really through scale. If we get the volume growth accelerated and we have good cost discipline, we can get the scale, and it comes in several areas. It's not just 1 big idea. It comes in several areas up and down the P&L.
To get it a little bit more little more specifics for you. So we're basically today in a little over 10%. So as we look at what we need to do to get there. So there's 3 blocks of that. So part of that, which should be about 1 point of that is going to be coming from gross margin.
And gross margin, that's just continuing to do what we're doing as well as Ken talked about, the scale portion as well. as we put more volume through our manufacturing plant, we're underutilized today, we'll be able to be more efficient and be able to drive efficiencies there.
So that's about 1 point of that. About 2 points of that is through our volume incentives line. As you can see, we've brought that down significantly over the last year. And really, the biggest push of what's making that happen is just our digital business, which where we don't pay the commissions or don't pay as much commission as we do in our other parts of our business.
As that we mix more to digital, that will continue to come down. So that's about 2 points. And then the final piece is just leveraging our SG&A as we continue to grow. That's also another 2 points. And as we talked about, that's not reducing head count or anything like that. It's really just leveraging as we grow. So it's a 1 and 2.
Perfect. That's really helpful. And then maybe I saw you guys appointed a new Chief Technology Officer. I guess does this signal -- I mean digital has obviously been very strong and very successful, particularly in the U.S. I guess, this kind of signal that you're going to continue to focus on that area and maybe even continue to expand the products offered on the DTC side as you see a lot more opportunity there longer term?
Yes. The hiring of a CTO is crucially important. We have a really good IT group here. However, technology, as you know, in every business is just -- it's a game changer these days, everywhere from your base infrastructure all the way to the use of AI.
And we needed a leader that came from very different experiences in the industry, both from evolving our base ERP system as a company. We face some end-of-life end-of-life dates in 5 or 6 years on our Oracle ERP system.
We have to figure out what's the next step there in our ERP system to absolutely putting the pedal to the metal on digital growth. There's so much more we can do there and the use of as well as how do we digitally enable our independent consultants.
So for instance, we just launched an app that allows independent consultants to do their entire business by phone. And there's so much more we can be doing with that. We just launched it, but there's so much more we can be doing that. And John Hanacek, our new CTO, has a lot of experience in doing things like that.
And so we're really taking technology and driving it all across base infrastructure digital growth direct-to-consumer as well as how do we digitally enable the tens of thousands of independent consultants we have around the world. And that's a lot of our investments this year.
A lot of our investments this year, as we talked about, why we're not continuing the typical digital -- the most recent double-digit EBITDA growth and only do around single-digit EBITDA growth this year was because we're making enhanced investments. A lot of it's in technology.
Okay. Great. And then maybe last question, if you could just give some color on the brands and products that drove the strong growth in each region. Then how -- I guess, also maybe how you're thinking about new products you expect to roll out new products to each of the regions this year.
I don't want to get specific about new products too much in advance. We will let you know as they occur. But when you think about what brands drove the growth, Nature's Sunshine is our brand in the U.S. in Latin America, North America, Latin America, Europe and in China.
And then the rest of the Asia Pacific region, Korea, Taiwan, Japan, Southeast Asia, that's synergy. So when we say APAC growth, it's kind of both brands because Nature Sunshine is in China and the rest of Asia has synergy.
So hopefully, that will give you a little bit of indication as to what brands are driving the growth. So both brands drove great growth in this quarter and continue to do over time.
New products they're mattering. We don't do the same new product everywhere. They're all on different time frames. We do have a very promising product that we're launching for the first time ever, a pan-Asian launch, meaning our 3 biggest Asian country, Korea, Japan and Taiwan are all going to be launching the same product with the same formulation at the same time through our very, very powerful Asia sales system.
It's never been done before. So they are gearing up for that. We will -- as we get closer to the date, we'll say what that product actually is. But it's a really -- it's a way to leverage the power of that system unlike we ever have done before.
Great. Okay. Excited to see what that is. Thank you so much for all the details.
Thank you. At this time, this concludes our question-and-answer session. I would now like to turn the call back over to Mr. Romanzi for closing remarks.
Thank you, Merisa, and we'd like to just thank everybody for listening to today's call, and we look forward to speaking with you when we report on our second quarter 2026 results. Have a great night.
Ladies and gentlemen, this does conclude today's teleconference. You may disconnect your lines at this time. We thank you for your participation.
Nature's Sunshine Products, Inc. — Q1 2026 Earnings Call
Nature's Sunshine Products, Inc. — Q4 2025 Earnings Call
1. Management Discussion
Good afternoon, everyone, and thank you for participating in today's conference call to discuss Nature's Sunshine financial results for the fourth quarter and full year ended December 31, 2025. Joining us today are Nature's Sunshine, CEO; Ken Romanzi, CFO, Shane Jones; and General Counsel, Nate Brower. Following their remarks, we'll open the call for analyst questions.
Before we go further, I would like to turn the call over to Mr. Brower as he reads the company's safe harbor statement within the meaning of the Private Securities Litigation Reform Act of 1995 that provides important cautions regarding forward-looking statements. Nate, please go ahead.
Thank you. Good afternoon, and thanks for joining our conference call to discuss our fourth quarter and full year 2025 financial results. I'd like to remind everyone that this call is available for replay by telephonic dial-in through March 24. And by a live webcast that will be posted on the Investor Relations portion of our website at ir.naturesunshine.com.
The information on this call contains forward-looking statements. These statements are often characterized by terminologies such as believe, hope, may, anticipate, expect, will and other similar expressions.
Forward-looking statements are not guarantees of future performance, and the actual results may be materially different from the results implied by forward-looking statements. Factors that could cause results to differ materially from those implied herein include, but are not limited to, those factors disclosed in the company's annual report on Form 10-K under the risk -- under the caption Risk Factors and other reports filed with the Securities and Exchange Commission. The information on this call speaks only as of today's date, and the company disclaims any duty to update the information provided herein. Now I would like to turn the call over to the CEO of Nature's Sunshine, Ken Romanzi. Ken?
Thank you, Nate, and good afternoon, everyone. Thank you for joining our fourth quarter and full year 2025 earnings call. I've now been at Nature's Sunshine for 131 days, and I am even more delighted to be here than when I last spoke to you on our third quarter earnings call on November 6 of last year.
Nature's Sunshine delivered another terrific quarter, growing sales 5% and EBITDA at 10% and by continuing to execute against its key drivers of success, leading to its highest annual sales level ever. But I'm most pleased -- but what I have found in this great company over the past 3 months.
Simply put, I love what I see, 2 very strong brands steeped in heritage and quality, Nature's Sunshine and Synergy, operating in the large global and rapidly growing category of natural health supplements, a globally diverse business, operating in over 40 countries around the world, xceptional product development capabilities, sourcing and blending hundreds of nature's best ingredients from around the world and scientifically verifying their effectiveness. An army of independent consultants, passionately representing our products every day to consumers all over the world.
Our rapidly growing digital business, penetrating new channels driven by a subscription strategy that enables consistent, recurring [indiscernible]. But what I have found solid balance of nearly $100 million in cash and no debt. And last but not least, a passionate, mission-driven organization dedicated to elevating people's lives globally through improving their health and economic well-being, while delivering industry-leading results for our shareholders.
Suffice to say, I see so much to build upon in Nature's Sunshine. And I believe we can drive even more accelerated growth going forward. I will share an outline for the future of Nature's Sunshine after our CFO, Shane Jones, provides the details of our strong fourth quarter performance. Shane?
Thank you, Ken. We are pleased to report another outstanding quarter with strong growth across North America and Europe. This growth continues to be bolstered by our expansion into new digital channels strong adoption of our subscription auto ship programs, exceptional to customer acquisitions and strong partnerships with our independent consultants across the globe.
Our efforts to modernize the business expand digital capabilities and strengthened customer and consultant engagement continue to pay big dividends. Now diving into specific financial performance. Net sales in the fourth quarter were $123.8 million, representing our second largest quarter in company history and our strongest fourth quarter burn. This represents a 5% increase versus $118.2 million in the year ago quarter or a 4% increase, excluding the impact of foreign exchange rates.
Growth was driven by continued acceleration in both North America and Europe. Net sales for the full year 2020 finished at $480.1 million, our best year ever and slightly higher than the high end of our most recent guidance range. This compares to $454.4 million of net sales in 2024 and represents 6% of year-over-year growth or 5% excluding the impact of foreign exchange. These results reinforce the traction we're seeing from our digital and other transformation initiatives. The strength of our product portfolio manufactured in-house with the very highest quality ingredients and the power of our passionate and knowledgeable independent consultants. Looking at our results in more detail, let's start with regional performance.
In North America, we continue to see building momentum as digital accelerates, while maintaining our core business of specialty retailers, practitioners, affiliates and independent consultants.
Q4 sales grew 6% year-over-year to $37.4 million. We're particularly excited about the strength in our digital business, which continued to show exceptional growth in Q4. And increasing 47% versus prior year.
Our work to move to an improved platform, leverage digital tools, optimize our digital marketing, enhance the customer experience and increased lifetime value continues to pay off, evidenced by our -- by very robust growth in new customers, coupled with better retention and frequency from returning customers.
Similar to what we reported in Q3, during Q4, we saw new digital customers nearly double compared to the prior year. We're also pleased to see very strong adoption of our subscription auto program. This program provides the strongest value proposition for the consumer, while improving consistent use to ensure the very best results for improved health. It also promotes increased frequency and retention and provides the company with a predictable recurring revenue stream.
In Q4, digital subscriptions coming through our website increased 260 basis points versus prior year to 47% of revenue. And subscription autoship on TikTok, which only started this past summer, reached 25% of TikTok revenue. Finally, we also continue to make progress with the efficiency of our digital marketing spend, which is resulting in meaningful improvements in customer acquisition cost and enhanced return on ad spend.
We are excited to see these fundamentals continue to move in the right direction, validating the strategic investments we are making and strengthening our confidence that we will meet and exceed the goals we have set.
As we've said many times, digital momentum is a key component of our broader transformation and represents an important long-term growth lever for our business. As digital continues to see robust growth, we expect continued mid-single-digit revenue growth in North America during 2026. The Sales in Asia Pacific declined 1% year-over-year to $55.7 million or a 1% decline on a constant currency basis. As we highlighted in our discussion last quarter, Q4 was a very difficult compare for APAC as sales increased 21% in constant currency terms during Q4 2024.
This performance over that difficult compare was driven by outstanding execution in China and Japan, where sales increased 35% and 21%, respectively, excluding the impact of foreign exchange.
We are pleased with the commitment and strong execution from our independent consultants in both markets, which has allowed Japan to sustain 20%-plus growth for 6 consecutive quarters now. and has helped to drive the meaningful turnaround in China.
In addition to great execution, strong adoption of our subscription autoship program also continues to drive meaningful growth. along with predictable recurring revenue. We are seeing rapid adoption of this program across all of our markets in APAC.
In Japan, subscription auto ship accounts for nearly half of all sales in that market. We only recently launched the subscription autoship program in China during the first half of 2025. Last quarter, we announced that the program already accounted for 12% of sales in Q3.
We are pleased to report that subscription auto ship in China continued to surge in Q4, increasing to 18% of revenue. We are very pleased with the progress being made in APAC and expect continued mid-single-digit growth from this region in the coming year, but acknowledge the inherent lumpiness of quarter-to-quarter sales due to the nature of our field activation efforts.
We're also pleased with the continued strength in our European business, where Q4 sales increased 18% versus the prior year to $25.2 million or 14% on a constant currency basis. These outstanding results were driven by 23% growth in Eastern Europe in local currency terms.
The strength in Eastern Europe has been fueled by improved product availability as we have worked to ensure appropriate in-stock levels of our key products where we see high demand. This improvement was combined with outstanding execution from our independent consultants and some economic stabilization in the region. This remarkable growth is a testament to the perseverance and commitment of our staff in that area given the continued war in the region. For 2026, we continue -- we expect continued mid-single-digit growth in Europe as well.
Now turning to gross margin. We continue to build on the progress we've made over the past several quarters as gross margin increased 55 basis points to 72.5% compared to 72.0% a year ago. This improvement represents the benefit of our ongoing gross margin initiatives and favorable market mix. We've been talking about these margin improvement efforts for some time.
These initiatives include renegotiating logistics contracts, better conversion costs through improved manufacturing efficiency, improved sourcing, more disciplined pricing and other cost-saving measures. We're proud of our team's continued efforts to streamline our supply chain. I'm pleased to see the benefit reflected in our results.
As we look forward, we anticipate continued modest improvement in gross margin during 2026. But note that some uncertainty remains around the impact of tariffs and inflation. Therefore, gross margins are likely to settle into the upper 72% range during 2026, which represents a significant step-up from where we've been historically. Volume incentives as a percentage of net sales were 29.1% compared to 31.1% in the year-ago quarter.
The decrease was primarily due to the strong growth in our digital business as well as changes in market mix. Selling, general and administrative expenses during the fourth quarter were $48.4 million compared to $43.7 million in the year ago quarter.
As a percentage of net sales, SG&A expenses were 39.1% for the fourth quarter compared to 35.7% a year ago. The $4.7 million increase versus prior year was primarily related to digital ad spend, variable costs associated with the sales increase and nonrecurring expenses. The decision to increase digital ad spend during Q4 was based upon the opportunity for very strong customer acquisition and a favorable customer acquisition cost.
Looking forward to 2026, we expect quarterly SG&A of $46 million to $48 million. Operating income increased to $5.3 million or 4.3% of net sales compared to $4.6 million or 3.8% of net sales in the year ago quarter. GAAP net income attributable to common shareholders for the fourth quarter was $4.1 million or $0.23 per diluted common share compared to a loss of $0.3 million or $0.02 per diluted common share in the year ago quarter. Adjusted EBITDA, as defined in our earnings release, increased 16% and to $11.9 million compared to $10.3 million in the year ago quarter.
The increase was primarily driven by the growth in net sales and improvement in gross margin. Adjusted EBITDA for the full year 2025 was $49.4 million, above the high end of our most recent guidance range and representing 22% growth versus 2024.
The increase for both the quarter and the full year was driven by the increase in net sales, improved gross margin and cost leverage. Our balance sheet remains clean with cash and cash equivalents of $93.9 million and 0 debt. Inventory increased to $68.3 million at the fourth -- end of the fourth quarter a $1 million increase versus Q3 as we work to replenish inventory after the robust growth seen in Q3 and Q4.
We expect to see a moderate increase in inventory during 2026 and to ensure appropriate in-stock levels and fulfill continued strong demand. Net cash provided by operating activities was $35.3 million compared to $25.3 million in the prior year. We repurchased 1.3 million shares for approximately $16.3 million or $12.95 per share during the year ended December 31, 2025, and with $17.4 million remaining on our share repurchase program. Looking beyond share repurchases, our healthy capital allocation structure positions us well to continue our digital transformation and other strategic initiatives.
Now turning to our 2026 outlook. We expect full year 2026 net sales to range between $500 million and $515 million compared to $480 million for 2025. This equates to year-over-year growth of 4% to 7%. For adjusted EBITDA, we are guiding to a range of $50 million to $54 million, representing year-over-year growth between 1% and 9%.
This guidance includes measured investments to improve our technology infrastructure, drive further customer acquisition, advanced geographic expansion, expand penetration in existing markets and accelerate product innovation.
While these investments will temper our 2026 EBITDA from our consistent double-digit growth rate, we see strong momentum in the business and believe that now is the time to make these key investments in order to position the company for more rapid sustained growth in 2027 and beyond. Overall, we continue to believe the business is well positioned to capitalize on current opportunities in a growing market and remain very optimistic about our ability to continue to unlock the substantial growth prospects that we see. The strategic initiatives we've been implementing are working, and we're confident in our ability to continue to accelerate growth in sales, profitability and free cash flow. Now I'll turn the time back to Ken for some further commentary.
Thank you, Shane. Very well done. As I mentioned earlier, I see many opportunities for Nature Sunshine to take advantage of those opportunities, we're doubling down in 2026 to make the investments, Shane shared with you to accelerate our growth. We're setting a goal of growing Nature's Sunshine to $1 billion in sales with improved profitability along the way.
As our plan is still in its early stages, we will present more details of when and how we'll get there in future presentations. But simply put, we expect to accelerate our top line growth ahead of the 4% to 5% we've been growing over the past few years and then leverage that higher growth to improve our bottom line profitability. We're calling our accelerated rate growth plan, major Sunshine vision for growth. The core drivers of our vision for growth include the following 7 elements.
One, continued rapid expansion of our digital business into new channels; two, deeper penetration in our core direct selling markets; three, expansion -- geographic expansion in new high-value markets; four, exploring opportunities in retail channels; five, deepening our consumer relationship with differentiated brand positioning, marketing and product innovation for both Nature's Sunshine and Synergy; six, leveraging our supply chain for scale efficiencies and seven searching for complementary accretive M&A opportunities.
By executing our vision for growth we see $1 billion in sales clearly in our grasp. The future has never been before at Sunshine, and I look forward to sharing more about our vision for growth in the near future. Thank you for your time today and your continued support of Nature's Sunshine. I would now like to turn the call back to the operator for questions. Operator?
[Operator Instructions] And your first question comes from the line of Brian Holland from D.A. Davidson.
2. Question Answer
Congratulations on the strong 2025 results. maybe just starting, Shane, with the outlook for 2026. You've obviously provided a wider range of outcomes on the EBITDA line than the net sales line. I assume that's fairly straightforward, i.e., obviously, you talked about more investment behind advertising, marketing, et cetera, as well as innovation, bringing new products to market, et cetera.
So is it as simple as kind of the bottom end of the EBITDA range assumes that those investments don't kind of perform at the level that maybe some of the incremental investment that you put into the business in the second half of 2025 showed -- and maybe -- and similarly -- maybe just help me understand also the midpoint and the high end of the range, does the midpoint assume that 2026 looks similar to the second half of and maybe the high end is better? Just trying to understand what's all in there. Sorry, that was kind of a jumbled one, but...
Yes. No, that's okay, Brian. Yes. No, absolutely. There's a lot of things that are going into -- obviously, into those EBITDA projections that we have out there. One of it, as we talked about, there's still some uncertainty about things like tariffs and inflation. And so at the bottom end, obviously, we've got some bigger impacts from potential inflation increases as well as tariffs this year. .
We also have the impact then most of our investment, the investments we're talking about, we're making considerable investments in many different ways, as you saw there. Some of those benefits this year. Many of those -- the real benefit comes in the out years, in 207 and beyond. So that is incorporated into that as well.
And then there's also just some macro uncertainty currently in the world with what's happening with current war that's out there and all the implications that, that could have for the consumer for oil prices for all of that. We've tried to encompass all of those factors into our guidance. And so that's why you have a little bit bigger range from that $50 million to $54 million. Does that answer your question.
Yes. No, that's extremely helpful. I appreciate it. And then maybe just a good segue into 2026. Your comment about some of the uncertainties here, we're 2/3 of the way through 1Q 26 a number of factors, both within the past week and maybe even earlier in the quarter to consider. Just any sense about how the consumer -- your core consumer is holding up in some of your strategic initiatives here as we're early in 2026. Any commentary about that relative to how 25 finished off for you?
Yes. We're still seeing very consumer demand in our markets. We've talked about some of the demand what you saw in Q4 across the digital, places like digital in China continues to be very, very strong. Japan, and we see no letup in the current quarter from those trends.
And then maybe just...
And I'll keep in mind because the recent issues in the world that I don't even think they showed up the gas pump yet. So we have not seeing anything...
Right, right. So we haven't seen anything yes, to summarize, we're not seeing anything yet. We're still seeing very strong demand, but who knows?
I appreciate it changes by the day. And then maybe just to finish off on kind of some of the long-term stuff that you teased there, Ken. Maybe first of all, obviously, when you -- you guys have really kind of stepped into something here, the digital side with North America, the auto subscribe in China.
And I imagine those are things you're going to double down on, obviously, sort of embedded within the outlook for 2026. You're going to continue to lean into some of this. What have you learned about the addressable market for Nature's Sunshine over the past year. is there any way to quantify the extent to which that's expanded that might inform kind of $1 billion business at some point in the future? I know you haven't down to a time on that. And then maybe just a second 1 on that. Would that be -- are you assuming the path to $1 billion would be all organic? Or is -- or could M&A be part of that path to $1 billion? And I'll leave it there.
Yes. Great. Thank you. Well, first of all, what we've seen in the market, this is a big and growing market. And depending on what sources you use, you can look at health and wellness trends, you can look at total supplement trends, you can look at natural clients. There's a lot of different sources, and we're honing in on what source they want to use to kind of measure our market share. .
But basically, the market has been growing mid-single digits, 5%, 6%. And it's projected to like step up to grow a little bit higher than that, maybe 6% to 7%. And in what we're measuring in terms of health supplements going forward. Because if you look at health and wellness trends, some of the data includes exercise equipment weight loss we're really looking at the supplement market. So it's large. The TAM is huge. And we've looked at market share in some places. And right now, we're looking at per capita consumption, and there's just opportunity everywhere. In some of our strongest markets, we only have like a 2% to 3% share of health supplements. So we just think there's tremendous opportunity to both grow with the market as well as increase market share.
In terms of growth going forward, to double the business in 10 years, you got to grow 7% a year to double our business in 7 years, you got to grow about 10%, 11% a year. So we think that there's strong organic growth, but we also think that new channels and M&A have to play a part of that. So I listed a menu of things. We're not leaving anything unturned. But as we've discussed it with the Board, it depends on how fast we want to get there.
We believe there's opportunities in the M&A area because we have capacity in our manufacturing facility, so we can we can do bolt-on acquisitions and get a lot of variable margin by leveraging our fixed cost in our manufacturing industry as well as perhaps brands that might be able to help us get into other channels. So we have amazing product development. We have 2 brands, and we're going to open up our aperture and not be limited by whatever channel we've done in the past. We have so much product development capabilities. We can probably have different products and different channels underneath the brands we already have, even before we consider buying anything new.
And your next question comes from the line of Susan Anderson from Canaccord Genuity.
I guess maybe I kind of wanted to drill down a little bit on the strong digital growth in North America. I guess I'm kind of curious if you're seeing customers come to the site, maybe they're buying your products in another channel or elsewhere, how are you guys acquiring these customers.
And then also, when they do go to the site, I guess, are they purchasing any different products you're seeing in other channels? Are they looking for anything different or kind of basically their interest is very similar to consumers purchasing in another channel.
Great question, Susan. So one of the things that we're starting to really appreciate is this is an ecosystem. As we're opening different channels in digital, all of those digital channels actually are synergistic and feed one another. Let me give you an example. We've been utilizing TikTok lately and have seen tremendous results in customer acquisition there. And we're able to drive new customer acquisition at a CAC that's way lower than anything we've seen in other channels.
Those customers come into TikTok, purchased first time on TikTok, but then many times, they'll go and then buy something -- and sometimes they don't even buy on TikTok. They'll go to Amazon and they'll buy the product on Amazon or they might go to our website or they might even go to one of our independent consultants and actually buy something there.
So it is -- and it feeds that way across all of those channels. So I think we're getting to an inflection point where we're starting to see those benefits and this thing, frankly, to understand them well enough to feed them in the right way. so that we're utilizing our digital media in the right way to get a very strong return on that. We understand when we acquire a customer how much it costs to acquire that customer and then what we're going to get in the lifetime value of that customer and then just maximizing that, improving retention as we go along the way.
So we're excited about what we're seeing because the real fuel here is newcomer acquisition, which is coming largely through ticktock, but also through the other channels, but then that overflows into virtually everything else we're doing.
Yes. And the thing I'd add is that if you think about your own -- you or your own families purchase behavior or I look at our family, we don't shop in just 1 place. Sometimes we shop in a retail store, sometimes the same item at Amazon. Sometimes, we get it directly to a website. .
Some people come to our website, learn about it, but then they can't -- they can avoid free shipping being a prime member on Amazon, so they go there. We have a great example of this ecosystem that Shane just mentioned. We worked with an influencer on Tiktok. And that influence got really excited about 1 of the items that I think was #83 in our lineup in North America. It's called lymphatic drainage and lymphatic drainage is a hot health issue right now. We work with this influencer. And not only did they sell an amazing amount on TikTok shop, we sold a lot more on Amazon a lot more in our nsp.com and then a lot more amongst our independent consultants.
So what influence on TikTok created this unbelievable demand across all of the whole ecosystem and everybody every channel benefited from that. So they're not as distinct we sometimes talk about them because consumers are shopping everywhere, every day, and they're mixing it up. And it's just the power of if we are where the consumer is, we can benefit from that. And that item drove to be our #1 item last year across the board. You have to be like #83 for years.
Okay. Great. So it sounds like you guys are definitely acquiring new customers. So I guess as you think about kind of like this plan to accelerate growth to $1 billion and maybe go into some rational channels, such as retail I guess is the thought is that you'll continue to drive new customer acquisition through those new channels. I guess, is there any point where there is risk of kind of cannibalizing the older channels such as some of the partners that you work with and everything?
Well, one of the ways we can do this is we can do it through product differentiation. So we still want to treat our independent consultants is very special. Right now, there's a lot of times where they bring consumers in and then people jump off to Amazon. So that is a little bit of channel conflict, but we believe we have enough products to feed the channel.
So if you think about our independent consulting business and direct-to-consumer alone, we've got enough to feed those independently to drive growth. because our independent consultants can't sell everything and we can't sell everything DDC.
We can't concentrate on the amount of new product activity that we have coming down the pipeline because at some point, you can have too much. So we're fortunate enough to have such a robust pipeline. We're going to be able to start to differentiate and pick our way through to drive growth because I'm not very patient. And when my product development team has a great idea, I'm not going to wait for a channel to be ready.
We're going to go find where the consumers are, and we'll open up the channels necessary to make sure that we have an outlook for the strong product pipeline we have coming down the road.
Thank you. And at this time, this concludes our question-and-answer session. I would now like to turn the call back over to Mr. Romanzi for closing remarks.
Well, thank you for your questions. Thank you for your attention. We're really excited, as you can tell, about Nature's Sunshine. I just -- I see these -- both brands in a Sunshine and Synergy popped by an amazing organization with great product development capabilities. If we just opened up our aperture just a little bit to think about being where the consumers are, that lymphatic drainage example is a great one to share with you that if we start to untap that type of potential and not be limited by our channel scope we really believe we can accelerate the growth. It's not doing the same thing the same way.
We're going to take all of the great levers that the team has been working on and replicate that and add a few new levers to accelerate our growth. So we're looking forward to sharing more details of that plan going forward. So thanks so much for your time and attention and your continued sort of Nature's Sunshine.
Ladies and gentlemen, this does conclude today's teleconference. You may disconnect your lines at this time. Thank you for your participation.
Nature's Sunshine Products, Inc. — Q4 2025 Earnings Call
Nature's Sunshine Products, Inc. — Q3 2025 Earnings Call
1. Management Discussion
Good afternoon, everyone, and thank you for participating in today's conference call to discuss Nature's Sunshine's financial results for the third quarter ended September 30, 2025. Joining us today are Nature Sunshine CEO, Ken Romanzi; CFO, Shane Jones; and General Counsel, Nate Brower. Following their remarks, we'll open the call for analyst questions. Before we go further, I would like to turn the call over to Mr. Brower as he reads the company's safe harbor statement within the meaning of the Private Securities Litigation Reform Act of 1995 that provides important cautions regarding forward-looking statements. Nate, please go ahead.
Thank you, Sergio. Good afternoon, and thanks for joining our conference call to discuss our third quarter 2025 financial results. I'd like to remind everyone that this call is available for replay by telephonic dial-in through November 20 and a live webcast that will be posted in the Investor Relations portion of our website at ir.naturesunshine.com. The information on this call contains forward-looking statements. These statements are often characterized by terms such as believe, hope, may, anticipate, expect, will and other similar expressions. Forward-looking statements are not guarantees of future performance, and the actual results may be materially different from the results implied by forward-looking statements. Factors that could cause results to differ materially from those implied here to include, but are not limited to, those factors disclosed in the company's annual report on Form 10-K under the caption Risk Factors and other reports filed with the Securities and Exchange Commission. The information on this call speaks only as of today's date, and the company disclaims any duty to update the information provided herein. Now I would like to turn the call over to our recently appointed CEO of Nature's Sunshine, Ken Romanzi, Ken?
Thank you, Nate, and good afternoon, everyone. Thank you for joining our third quarter earnings call. Before I turn the call over to Shane to discuss our strong third quarter performance, I'd like to quickly introduce myself and share how excited and grateful I am to be the CEO of Nature's Sunshine. I joined just over a week ago, and I am absolutely honored to lead this iconic brand into its next chapter of growth. Throughout my career, I've had the privilege of leading organization transformations and driving growth of beloved iconic brands, many in your kitchens at home at both public and private companies across the consumer packaged goods industry, including B&G Foods, Nabisco, now part of Mondelez, Hasbro, Ocean Spray cranberries, Cadbury Schweppes and Frito Lay, just to name a few.
At each stage of my career, one thing has always been true, strong brands with great products and a clear mission, create lasting value for customers, employees and shareholders. That is exactly what Nature's Sunshine. The company possesses a strong legacy of foundation of trusted products, passionate consultants and practitioners, a deep-rooted commitment to improving lives through natural health. As someone who is dedicated to health and wellness myself, I see tremendous potential to build on this foundation and accelerate growth globally. In my very short time here, I've met with our teams, listened to field leaders and employees and immersed myself in our business. And it's very evident that we have a mission-driven organization and a unique opportunity to strengthen our brand, leverage our vast direct sales network of amazing consultant entrepreneurs. Expand our digital and direct-to-consumer capabilities and deliver even greater value to our customers and shareholders. I'd like to thank my predecessor, Terrence Moorehead for his leadership and the strong platform that he and the Nature's Sunshine team have built.
And I'm excited to lead the business through its next phase of growth, powered by our iconic brand our operational excellence and continued innovation in natural health and wellness. I look forward to meeting our various stakeholders over the coming months and addressing our shareholders more formally on our fourth quarter earnings call. Now I'd like to turn it over to the real highlight of the show today, our CFO, Shane Jones to provide details of our strong operational and financial performance in the third quarter. Shane?
Thank you, Ken. I'd like to start by saying that I'm very happy to be working with Ken. He combines a wealth of knowledge and experience with outstanding values and leadership. He is the right person to take Nature's Sunshine to the next level and I am more confident than ever in our future. We're pleased to report our best quarter ever. As the strategic investments we've made over the past 2 years, combined with strong execution and hard work are yielding meaningful improvements across North America, Asia and Europe. We're seeing a strong surge in new customers, better engagement from current customers and improved activity with our distributors. Our efforts to modernize the business, expand digital capabilities and strengthen field engagement are translating into tangible growth across our key regions. The combination of these initiatives, along with disciplined cost management positions us very well for continued profitable expansion despite the macroeconomic and trade headwinds that persist in many of our markets.
Now diving into specific financial performance. Net sales in the third quarter were $128.3 million, a quarterly record compared to $114.6 million in the year ago quarter. This represents a 12% increase versus the prior year or an 11% increase, excluding the impact of foreign exchange rates. Growth was driven by acceleration across Asia Pacific, North America and Europe. These results reinforce the traction we're seeing from our transformation initiatives and the strength of our product portfolio manufactured in-house with the very highest quality ingredients and our passionate and knowledgeable distributors, combined with our 50-plus year heritage and global brand.
Looking at our results in more detail, starting with regional performance. In North America, we continue to see improved momentum as digital accelerates, while maintaining our core business of specialty retailers, practitioners, affiliates and business builders. Q3 sales grew 7% year-over-year to $36.2 million. We're particularly excited about the strength in our digital business, where year-over-year growth accelerated to 52% in Q3. Our work to move to an improved platform, leverage digital tools optimize our digital marketing, enhance customer experience and increased lifetime value is paying off. Meaningful acceleration in new customers, combined with improved retention and frequency, have been key to the strength. As an example, the number of new digital customers making a purchase in Q3 more than doubled versus prior year. We're also pleased by the growth in our subscription auto ship program, which now represents more than half of DTC ordering accounts.
Just as a reminder, our auto ship programs are a win-win for consumers and the company. They provide the strongest value proposition to the consumer, while improving consistent use to ensure the best results for better health. In addition, they drive improved frequency and retention with a predictable recurring revenue stream for our products. Finally, we are also making progress with the efficiency of our digital marketing spend, resulting in meaningful improvements in customer acquisition cost and enhanced return on ad spend. The combination of these fundamentals validates the strategic investments we are making and strengthens our confidence in our ability to meet and exceed the goals we have set. As we've said many times, Digital momentum is a key component of our broader transformation and represents an important long-term growth lever for our business. As digital continues to see robust growth, we expect continued strong growth in North America during Q4 and mid-single-digit growth in 2026.
Asia Pacific delivered 17% and year-over-year net sales growth to $64.7 million or 15% growth on a constant currency basis. Growth was driven by strong performance in Japan, China and Korea where sales increased 32%, 36% and 12%, respectively, excluding the impact of foreign exchange. In each of these markets, our efforts to introduce more consumer-friendly products, enhance our subscription auto ship programs and strength in field activation have been key contributors to the improved momentum. The more consumer-friendly product bundles introduced last year in APAC continue to have strong appeal from both our customers and distributors, leading to increased acquisition along with better repeat. Likewise, our autoship program continues to benefit consumers while driving predictable recurring sales growth. In Japan, autoship now accounts for approximately 50% of the sales in that market. China launched an autoship program earlier this year, and we are seeing a strong response as that program already accounts for 12% of sales and has helped to reaccelerate growth in that market.
Finally, our field activation initiatives were particularly effective in Q3 driving exceptional results and likely accelerating some sales originally expected in the fourth quarter. Given the very difficult Q4 comparable, remember that APAC grew 21% in constant currency terms last Q4 combined with the fact that approximately $2 million of revenue was likely accelerated from Q4 to Q3 this year. APAC growth is likely to be flat to down slightly in Q4 2025. We are very pleased with the progress being made in APAC and expect continued mid-single-digit growth from this region in the coming year, but acknowledge the inherent lumpiness of sales due to the nature of our field activation efforts.
Europe also continues to perform well, with Q3 sales up 13% versus the prior year to $22.1 million or 10% on a constant currency basis. This growth was driven by 10% growth in Central Europe and 14% growth in Eastern Europe, both in local currency terms. In Central Europe, our expansion into the Baltics continues to progress very well. supported by steady demand for our power line products. We're encouraged by our team's ability to drive growth while successfully broadening our regional footprint. The growth in Eastern Europe has been fueled by improved product availability, combined with outstanding execution from our distribution partners. This growth is remarkable given the current instability in that region and is a testament to the perseverance of our staff in that area. For Q4 and 2026, we expect continued growth from both of these markets. with Europe as a whole growing mid-single digits.
Turning to gross margin. We continue to build on the progress we've made over the past several quarters as gross margin increased 200 basis points to 73.3% compared to 71.3% a year ago. This improvement represents our highest gross margin in 15 quarters and reflects the benefit of our ongoing gross margin initiatives and favorable market mix. We've been talking about these margin improvement efforts for some time. These initiatives include renegotiating logistics contracts better conversion costs through improved manufacturing efficiency, improve sourcing, more disciplined pricing and other cost-saving measures. We are proud of our team's continued efforts to streamline our supply chain. I'm pleased to see the benefit reflected in our results. As we look forward, despite our efforts to avoid and delay the impact of tariffs, we do anticipate a small impact on gross margin. Therefore, gross margins are likely to settle into the upper 72% range next quarter and into next year, which represents a significant step up from where we've been historically.
Volume incentives as a percentage of net sales were 30.7% compared to 31% in the year ago quarter. The decrease was primarily due to the strong growth in our digital business as well as changes in market mix. Selling, general and administrative expenses during the third quarter were $45.7 million compared to $41 million in the year ago quarter. As a percentage of net sales, SG&A expenses were 35.6% for the third quarter compared to 35.7% a year ago. The $4.7 million increase versus prior year was primarily related to digital ad spend, other variable costs associated with the sales increase and nonrecurring expenses. The decision to increase digital ad spend during Q3 was based upon the opportunity for very strong customer acquisition at a favorable customer acquisition cost. Similar to what occurred in Q3, we will continue to make additional investments in digital advertising when we can achieve an outstanding return on that investment. In Q4, we expect SG&A of $46 million to $47 million which includes $1 million to $2 million of nonrecurring expenses.
Operating income increased to $9 million or 7% of net sales compared to $5.3 million or 4.6% of net sales in the year ago quarter. GAAP net income attributable to common shareholders for the third quarter was $5.3 million or $0.30 per diluted common share compared to net income of $4.3 million or $0.23 per diluted common share in the year ago quarter. Adjusted EBITDA, as defined in our earnings release, eclipsed our previous record increasing 42% to $15.2 million compared to $10.7 million in the year ago quarter. The increase was primarily driven by the increase in net sales and improvement in gross margin. Our balance sheet remains clean with cash and cash equivalents of $95.6 million and 0 debt. Inventory decreased to $67.3 million at the end of the third quarter, a $2 million decrease versus Q2 driven by the very strong demand in Q3. We expect to rebuild that inventory during Q4 to ensure appropriate in-stock levels and fulfill continued strong demand in Q4.
Net cash provided by operating activities was $25.4 million compared to $13.1 million in the prior year period. We repurchased 1.1 million shares for approximately $14.4 million during the 9 months ended September 30, 2025, with $19.3 million remaining on our share repurchase program. Looking beyond share repurchases, our healthy capital allocation structure positions us well to continue our digital transformation and other strategic initiatives.
Now turning to our 2025 outlook. Based on our strong Q3 results and the improved momentum in the business, we are raising our guidance for 2025. We now expect full year 2025 net sales to range between $476 million and $480 million compared to previous guidance of $460 million to $475 million. This new range equates to year-over-year growth of 5% to 6%. For adjusted EBITDA, we are now guiding to a range of $47 million to $49 million, versus the prior range of $41 million to $45 million. This new range equates to year-over-year growth between 16% and 21%. This implies Q4 guidance of $119.7 million to $123.7 million of revenue and EBITDA between $9.6 million and $11.6 million. As a reminder, the fourth quarter of last year represented the largest single quarter in our company's history at that point, driven by very strong performance across Asia Pacific and Europe, which naturally creates tougher year-over-year comparisons. Overall, we continue to believe the business is well positioned to capitalize on current market opportunities and remain very optimistic about our future growth prospects. The strategic initiatives we've been implementing are working and we're confident in our ability to continue to accelerate growth in sales, profitability and free cash flow. Now I will turn the time back to the operator.
[Operator Instructions] Your first question comes from Brian Holland from D.A. Davidson.
2. Question Answer
Can you hear me now? So I'll start again. I apologize. First of all, welcome and congratulations, Ken, look forward to working with you. And then just digging into the quarter here, Shane, maybe to start naturally in the North America segment, particularly in light of the ongoing inflection in the digital business. Maybe just kind of -- maybe a multipart question here. But one, are we seeing particular success as far as reaching the consumer, which channels within digital, how is that informing investment? And then mindful of the particularly compelling combination of new customer acquisition and retention which doesn't usually happen, usually trade one-off for the other, right, from a growth perspective, especially when one is that magnitude. How does one think about the right level of investment going for leading into this momentum and kind of peaking into 2026.
Yes. That's a great question, Brian. So first of all, we're really pleased with what we're seeing in our digital channel. And it's really across multiple areas. Our Amazon business is doing very well. Our DTC business is doing well and our social commerce business is also doing very well. So very encouraged by what we're seeing is the most encouraging is we've seen an opportunity to really invest in digital advertising at a much lower CAC, customer acquisition costs than what we've seen in the past and which is driving a lot of new customers, which is obviously a good thing for the business now and go forward. So we will continue to invest as long as our return on ad spend and our CAC continue to be at advantageous rates.
Appreciate it. Good color. Maybe just quickly this is...
Actually, sorry, I think Ken had something on to add.
I'm sorry to interrupt, but I just wanted to add, just in my learning curve in the last week, I've heard a few amazing things, number one, TikTok has become a really great social commerce at avenue for us. I had not even realized there was a store competing with Amazon on TikTok, I am not a personal user, but that has been tremendous success over the last quarter. And we have a tremendous opportunity for more autoship. I love the autoship program. It's working well around the world. And in the U.S., if people's first experience and purchase for us is combined with an autoship the repeat, obviously and the coming back nature of that customer is far greater than someone who just buys product wants and doesn't sign up for autoship. So autoship is the gift that keeps on giving. And if we can get people into that early, it just creates much more retention and, of course, drives a lot of the great numbers that Shane was describing.
I appreciate the color, Ken, and Shane as well. Moving over to APAC, there are obviously certain markets where the momentum has been in place Japan, et cetera. China was, I think, a positive surprise here. So maybe just mindful of you guys have spent a fair amount of time talking about the challenging macro backdrop and how that was flowing through in the business. So that seems to me to be the biggest source of surprise here relative to what I was thinking even just conceptually going into the quarter. So would be great to kind of double-click there on how that business is kind of flipping.
Yes, we're very pleased with what we saw in Q3 and what we continue to see from China in that a lot of the trends that we had talked about 6 months ago are getting much, much better now. If we look at really what's driving that, there are a number of factors, but the biggest factor goes back to that auto ship program that Ken was talking about as well. We didn't have an auto ship program in China until earlier this year. So we implemented a subscription autoship program there, similar to what we have in other markets already around the world. And already, it accounts for over 12% of total sales and is a big part of what's really driven around the economics and the fundamentals there to get that business running again. And once you've got the momentum going there, that actually helps feed the rest of the business as well.
And maybe just a quick follow-up on China from your perspective. Is the underlying macro backdrop as it pertains to your core consumer, has there been any improvement there? Or is this really just about execution and self-help at year-end and the backdrop really hasn't changed that much.
So the macroeconomic environment there, we've seen it stabilize. So I wouldn't say that it's gotten a lot better, but it hasn't gotten worse either. And just getting the stabilization there has helped us then to do some of the fundamental changes that we need to do to be able to reaccelerate that market.
Great. And I'll be mindful of time here. So maybe 1 for Ken, and I'll hop back in the queue. But can maybe just, obviously, we saw in the press release in your introductory remarks today. So a sense of the overlap here from a consumer-facing standpoint with some of the brands that you've dealt with before. Maybe just a little bit more I would love to understand as you think about the skills that you've developed over your career and applying it here at Nature's obviously, the business is performing quite well year-to-date. Where do you see yourself spending a disproportionate time here at the first 100 or so days? And where do you see particular opportunity to apply your expertise to the infrastructure here to maybe either improve or enhance what's in place.
I can't wait to see you one-on-one, because I can take a long time answering that question. I will try to -- in the spirit of time, I will try to be as brief as possible and condensed 43 years into a few minutes. So number one, my first 100 days is just learning the business, learn the [indiscernible], learn the people, the organization, and most of all, get out with leaders. I had my first meeting with a leader last night. It was so inspiring a long-term practitioner in North America. It was a fascinating meeting, I have pages of notes just from a 90-minute discussion with him. So learn the business and get out there and be with our frontline leaders. And my particular inspiration about this company is great brand, great products, great -- we're on a macro trend -- megatrend of with the wind in our sales. I've spent a lot of time trying to sell things against the wind, but the wind is in our sales on health and wellness and people looking for natural health and wellness cures, both the young and old. it is a trend that's been around for a long time and will continue for a long time.
So that's what excites me about this. To me, we have hundreds -- to me, I look at this company, and we have hundreds of thousands of salespeople in our company. That's the way I see our consultants and practitioners and partners. When I started my career, I was a company called Frito-Lay, we used to brag that we had 10,000 route salesman delivering to 300,000 retail accounts a day in the U.S. And we used to brag we had 10,000. I have hundreds of thousands of salespeople. When I ran sales and distribution in Nabisco, I had 5,000 salespeople. We felt like we were like -- and we were some of the best food distribution companies in the world. We have hundreds of thousands of frontline salespeople. So I worked in the soft drink business, where I partnered as a franchise owner we were the franchise ores of soft drink brands, and we went through independently owned bottlers, soft drink bottlers, who do the bottling and the sales and distribution of our products.
So it may not be obvious to people, but that system is no different from this system. I have a brand I do the marketing. I do the product development and the innovation and the thought leadership. And then I have to actually sell that syrup to a soft drink bottler who's an independent entrepreneur, many times third, fourth and fifth generation entrepreneur and has hundreds of millions of dollars invested in their system, running manufacturing operations and route trucks. I see no difference in selling to -- through that mechanism than selling through this mechanism. I had a sales force that they did, but they weren't employees, but we had a lead and motivate and influence them to build their business and our business mutually. I see that as a wonderful tangential experience that I can apply here. I grew up in marketing. So I'm a consumer marketer, that's the way I step out of bed every morning. But since 1993, I've been a general manager. So what can I bring? I mean, organizational leadership. I mean, we don't do anything without great people, and we have unbelievable people here.
The passion and enthusiasm and dedication to our employees is amazing. So we have a lot to build on from there. And then just business management, running a P&L and a balance sheet, I've been doing that for decades. But really motivating our people and focusing everybody on the highest leverage points to accelerate growth in our business, and then motivating hundreds of thousands of leaders around the world, which our team does well, but I just met with our head in North America earlier today, and I said, "start booking me with customers. So I will be with leaders in Southern California 2 weeks from now. I will be throughout 5 different countries in Asia in December. And then our Head of Europe already has me planned for January, February and March in various markets there. So I hope that starts to answer your question, and I appreciate it.
Your next question comes from Susan Anderson from Canaccord Genuity.
[indiscernible] on for Susan. Welcome, Ken. We're definitely excited to work for you. We can hear the passion already coming through. question on for third quarter, I mean, obviously, there was a big step change in growth going from low single digits to low double digits. I guess was there any 1 key factor or something that came together? Or was it just the strategy that you've been executing everything is coming together in the quarter?
It really is the combination of all the work that we've done over the last couple of years coming to fruition and really starting to fire on all engines. So we had very, very robust growth, as you see in digital, which was a key part of that. In addition to that, we had very, very good growth in APAC and some of APAC is timing based. So because of our field initiatives and the way the timing of what that was this year, it pushed some of the revenue that we would have normally seen in Q4 into Q3. So there's about a $2 million slide in timing there. but then also just really, really robust growth and good things happening in Europe, both in Eastern and in Central Europe. And then all of that combined with strong gross margin, good cost containment as well. So I think it's largely just the work that we are doing, it's great to actually see the strong momentum and those actions coming to fruition combined with just a little bit of timing.
And then I saw there was a new power line launch not too long ago. Is that a global rollout or just in North America? Or is that also included in the Baltic region where that line is fairly popular?
Right. So we will be phasing when the timing on that, but it will go to multiple markets. We'll start in the U.S. and then move to other markets as well.
And then my last question. On SG&A, a little bit of a step up there. It looks like on a pretty good return on ad spend. Is that a new level that we should think of SG&A going forward? Or is that pretty flexible just depending on the market?
Yes. So a little bit going back to the question of the previous person, as we see strong opportunities to be able to invest and get a very strong return on digital ad spend. We will continue to make those investments. And right now, we see those opportunities. So we've guided our SG&A for the next quarter to be in that $46 million to $47 million range with $1 million to $2 million of nonrecurring. I think that's the right amount to think about for the short term, but we will continue to respond as we have good opportunities that make sense. As I said, we will -- as we have good returns, we will feed those returns.
At this time, this concludes our question-and-answer session. I would now like to turn the call back over to Mr. Romanzi for closing remarks.
Thank you very much. So as I said earlier, I'm just delighted to be leading major Sunshine feel so privileged. And after hearing and learning about and hearing our third quarter results, which are which I have no association with, right? I didn't do anything to drive those results. But hearing those results and learning what Shane said about what drove all those results, the business is working on all cylinders. We have issues to address, but you saw a quarter where the strategies are working and the management team and leadership team is really delivering. So it just makes me so much more excited about the potential of the business, even more so than I was just a few days ago. So I just want to thank everyone for listening and joining with us today and really look forward to speaking with you when we get together to report our fourth quarter 2025 results.
And I'm new, so I'll have much more to say on that call about kind of where we think we're taking it in the future. But there'll be a lot of the same of what's working now. I don't feel like I have to overturn the whole ship. So I just feel very fortunate to be joining such a strong team with great results and a great strategy in place. So with that, we wish you again, thanks for joining us, and wish you a good night.
Ladies and gentlemen, these concludes today's conference call. You may disconnect your lines at this time. Thank you all for your participation.
Nature's Sunshine Products, Inc. — Q3 2025 Earnings Call
Financial data from Nature's Sunshine Products, Inc.
Revenue
Revenue is the sum of all sales generated by a company, e.g. for its products or services.
Revenue (TTM) metric explainedDirect Costs
Direct costs are the costs incurred directly in connection with the manufacture of the product or service.
Gross Profit
Gross Profit indicates how much of the revenue remains in the company after deducting direct production costs. If the percentage share of sales is calculated, this is referred to as the gross margin.
Gross Profit metric explainedSelling and Administrative Expenses
Selling, general and administrative expenses (SG&A) include all expenses for marketing and sales as well as the general administration of the company.
Research and Development Expense
Research and development costs (R&D) provide information on how much the company invests in the research and development of its products. The costs are particularly interesting as a percentage of revenue and in comparison to direct competitors.
EBITDA
EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) is the company's earnings before interest, taxes, depreciation and amortization. The EBITDA margin is calculated as a percentage of sales.
Depreciation and Amortization
Depreciation represents reductions in the value of the company's assets (e.g. due to wear and tear on machinery).
EBIT (Operating Income)
EBIT (Earnings Before Interest and Taxes) is the company's profit before interest and taxes, also known as the operating income. The EBIT Margin is calculated as a percentage of sales at
.
Net Profit
Net Profit represents the profit or loss after deduction of all costs.
Net Profit metric explainedStocksGuide Premium
| Jun '26 |
+/-
%
|
||
| Revenue | 492 492 |
7%
7%
100%
|
|
| - Direct Costs | 132 132 |
1%
1%
27%
|
|
| Gross Profit | 360 360 |
9%
9%
73%
|
|
| - Selling and Administrative Expenses | 331 331 |
7%
7%
67%
|
|
| - Research and Development Expense | - - |
-
-
|
|
| EBITDA | 43 43 |
23%
23%
9%
|
|
| - Depreciation and Amortization | 13 13 |
8%
8%
3%
|
|
| EBIT (Operating Income) EBIT | 29 29 |
45%
45%
6%
|
|
| Net Profit | 18 18 |
28%
28%
4%
|
|
In millions USD.
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Nature's Sunshine Products, Inc. Stock News
Company Profile
Natures Sunshine Products, Inc. engages as a natural health and wellness company. It markets and distributes nutritional and personal care products through a global direct sales force. The company was founded by Eugene L. Hughes, Kristine F. Hughes and Pauline T. Hughes Francis in 1972 and is headquartered in Lehi, UT.
StocksGuide Premium
| Head office | United States |
| CEO | Mr. Romanzi |
| Employees | 806 |
| Founded | 1972 |
| Website | www.naturessunshine.com |


