Vitamin supplement producer Nature's Sunshine Products has said its first quarter profits are likely to be around 50 per cent below analysts' estimates, even before the write-down of a long-term investment.
The company blamed the overall decline in the US market for vitamin and mineral supplements, which has suffered particularly since the events of 11 September. It said it had stopped taking on new staff and had instituted a cost-cutting programme throughout the organisation.
The first quarter results reflect a 5 per cent decline in US sales revenue and an 11 per cent decline in international sales revenue, or an 8 per cent decline in total sales revenue. The company's operations in Brazil accounted for approximately 75 per cent of the decline in international sales revenue, and both Brazil and Japan continued to experience operating losses for the quarter. The loss in Brazil, where import restrictions have adversely affected results, included expenses to restructure activities in that country.
As a result of the new measures, Nature's Sunshine said that it expects Brazil to post an operating profit for the second quarter. Nature's Sunshine said that it also expects more favourable year-on-year comparisons for Brazil in the second half of this year.
The first quarter results will be published later this month.