Nature’s Sunshine, a multi level marketing company based in Lehi, UT, sells a variety of dietary supplements, meal replacements and other products under its own brandname and that of a subsidiary—Synergy Worldwide. The company has expanded to markets worldwide.
In its third quarter earnings statement, Nature’s Sunshine reported rising sales in China, a market where the company has been operating for a little more than a year. Sales in that country rose by 19% to $7 million. Sales in Russia and Poland were strong, too. NSP (Nature’s Sunshine Products) sales rose 15% in Russian and Eastern Europe, totaling more than $8 million in the quarter.
Some markets fall off pace
But sales elsewhere were flat to sharply declining. Sales in the rest of Europe fell 18.5%, Latin America sales were down almost 13% and revenue declined almost 6% in North America.
Overall, revenue in the quarter was down by 0.4%. The company recorded $88.8 million in revenue in the quarter, compared to $89.3 million in the same period a year previously.
New CEO Terrence Moorehead said in an earnings call with analysts that the company is looking to revitalize sales in its sagging markets, especially North America, while it increasingly looks to China and South Korea (currently the company’s strongest overseas market) for future growth.
“Strong sales momentum in South Korea, which increased 27% during the third quarter, continues to drive Synergy Asia Pacific. In China, the third quarter growth of 19% is compared with our initial launch, following the receipt of our business license and the significant ramp-up of our business a year ago. We continue to be optimistic about our long-term growth opportunities in China,” Moorehead said.
“[T]here’s still tremendous potential in that market. Net sales in NSP Americas remain below prior year, and the team is still in the process of strengthening our positioning in that market. There has been a lot of effort in this much more mature segment of the company over the last year to improve customer service and engage our distributor base, and we look for additional opportunities to strengthen our business in the US and across the Americas,” he added.
A full transcript of the call can be accessed on the site seekingalpha.com.
Sales soft patch began several years ago
Moorehead has only been in the CEO chair for a few weeks. He took over from Greg Probert, who announced his plan to resign earlier this year. Probert’s announcement was characterized as a retirement.
During Probert’s tenure, which began in 2013, the company’s growth stalled and the China launch was significantly delayed by problems in getting a business license to operate in that country.
Industry media source Direct Selling News publishes a Global 100 list of the world’s top MLMs. In 2015, the company ranked 44th on the list, with $366 million in annual revenue in 2014, according to DSN. On the 2018 version of the list, which was released in May, Nature’s Sunshine had slid a few rungs down to No. 49, with $342 million in sales in 2017.
The company’s stock price had declined over the course of Probert’s tenure, too. The company’s stock was trading at almost $19 a share in late 2013; it trades at a bit more than $9 a share today.