The company, which is based in Lehi, UT, reported a 25% year over year surge in overall sales for its second quarter. Top line revenue came in at $109 million.
Digital transformation boosts results
The main drivers of the results were increased revenue in South Korea, long one of the company’s biggest individual markets, where sales were up 12%. Sales rose 15% in China and 35% in Japan, too.
The combined Asia Pacific results meant that Nature’s Sunshine crossed a threshold that competitor Usana did some years ago in which results from that region make up the largest share of overall revenue, outpacing results from North and South America and Europe, where Poland, a smaller market, was a bright spot, with sales up 49% year-over-year.
CEO Terrence Moorehead said in an earnings call with analysts that an ongoing digital transformation of the brand has helped the company prosper even as COVID-19 related lockdowns in various markets continue to hamper its ability to conduct business face to face, long a hallmark of the MLM model.
“Our digital marketing initiatives have outperformed expectations and are proven to be an excellent way to attract new customers. Overall, we're ahead of where we thought we'd be at this time, and we're pleased with our progress and look forward to going into the next phase of our new business model,” Moorehead said. A transcript of the call is available on the site seekingalpha.com.
New line of probiotic-based skin care
While Nature’s Sunshine has been mostly known as a seller of encapsulated herbal dietary supplements, Moorehead said a new skin care line named La Mara, launched first in South Korea, was a factor in the good results in that country. The next market for the line is Japan, he said, and plans are to eventually launch it in North America.
“It's largely facial skin care, all-natural luxury positioning. And it's a new segment for, I think, that piece of the business, generating a tremendous amount of excitement,” he said.
The new line includes a cleanser, a toner and a moisturizer, all reportedly with a probiotics base (details for the formulations are hard to come by outside of the Korean market).
Moorehead said the products are “very different from anything that we've had before and also what's out in the market.”