The Lehi, UT-based company recently reported third quarter financial results that showed overall sales were up by 14% year over year. The company brought in $114.7 million during the quarter.
ON a local currency basis, net sales increased 13% in the third quarter of 2021. On an absolute basis, net sales in Asia increased 27% to $48.4 million, compared to $38.1 million in the same a year previously, representing a 24% increase. Sales were up mostly strongly in Japan, China and Taiwan.
Sales also increased in Europe. On a local currency basis net sales in the region were up 21% year-over-year to $21.8 million, over $18 million in the third quarter of 2020.
The drag on overall sales were results in North America, which were essentially flat. Nature’s Sunshine’s net sales in the region during the quarter were $37.7 million, compared to $37.6 million a year previously. In that sense the company did not fall in line with other network marketing companies that sell supplements. Competitors like Herbalife and Usana have seen domestic sales rebound strongly after a number of years in the mid 2010s when sales in the region declined.
While Nature’s Sunshine does not give formal revenue guidance, the company seems to be on pace to comfortably top $430 million in annual revenue for the full fiscal 2021, a significant uptick from the $385 in net sales the company brought in 2020. It represents a remarkable turnaround for the company. After a problematical software implementation and a difficult, protracted entry into the Chinese market, the company’s annual net sales fell from $378 in 2013 to $325 in 2015. The company didn’t top the $370 million annual net sales barrier again until last year.
CEO Terrence Moorehead said the company is keeping costs reined in while sales increase, boosting profitability.
“In the third quarter, we continued to deliver historic improvements to our profitability. Operating profit increased a significant 83% up to $10 million, while operating margins improved 320 basis points. Similarly, adjusted EBITDA increased 38% to $12.9 million for the quarter, representing the largest third quarter profit in the history of the company,” he said. Moorehead made his remarks during an earnings call with stock analysts that was posted in transcript form on the site seekingalpha.com.
Personalization part of rosy future outlook
Part of the rosy outlook for the future is a direct-to-consumer personalization component that the company launched earlier this year.
“Over time, the program will also allow customers to build their own personalized nutrition plans by answering a simple questionnaire. This will give us access to an entirely new group of customers who want to have the best products and program in the market but also want to choose how they access our brand based on their personal preferences,” Moorhead said.
“Overall, we believe personalization is a unique opportunity to revolutionize the customer experience,” he added.