NATURES SUNSHINE PRODUCTS INC Q3 FY2025 earnings call

Ken Romanzi Introduction - Joined as CEO just over a week ago, has experience leading organization transformations and driving growth of iconic brands in consumer packaged goods industry. - Excited to lead Nature's Sunshine, sees potential to build on its foundation of trusted products, passionate consultants, and commitment to improving lives through natural health. - Thanked predecessor Terrence Moorehead for the strong platform. ### Shane Jones Performance Discussion - Reported best quarter ever, with net sales growth driven by acceleration across North America, Asia Pacific, and Europe. - In North America, Q3 sales grew 7% y-o-y to $36.2 million, digital business up 52% y-o-y, new digital customers more than doubled, subscription auto ship program over half of DTC ordering accounts. - In Asia Pacific, net sales grew 17% y-o-y to $64.7 million, strong performance in Japan, China, and Korea, autoship program effective. - In Europe, Q3 sales up 13% versus prior year to $22.1 million, growth in Central and Eastern Europe. - Gross margin increased 200 basis points to 73.3%, SG&A expenses increased due to digital ad spend and other factors. - Adjusted EBITDA increased 42% to $15.2 million compared to $10.7 million in the year ago quarter.

Net sales in the third quarter were $128.3 million, a quarterly record, up 12% versus the prior year or 11% excluding foreign exchange rates. Regional performance: North America Q3 sales grew 7% year-over-year to $36.2 million, with digital business up 52% year-over-year; Asia Pacific net sales grew 17% year-over-year to $64.7 million (15% growth on constant currency basis), driven by strong performance in Japan, China, and Korea; Europe Q3 sales up 13% versus prior year to $22.1 million (10% on constant currency basis). Gross margin increased 200 basis points to 73.3% compared to 71.3% a year ago. Volume incentives as a percentage of net sales were 30.7% compared to 31% in the year ago quarter. Selling, general and administrative expenses were $45.7 million compared to $41 million in the year ago quarter, with SG&A as a percentage of net sales 35.6% for the third quarter compared to 35.7% a year ago.

• Raised 2025 full year net sales guidance to range between $476 million and $480 million, equating to year-over-year growth of 5% to 6%. - Adjusted EBITDA guidance raised to range of $47 million to $49 million, equating to year-over-year growth between 16% and 21%. - Q4 guidance: net sales $119.7 million to $123.7 million of revenue and EBITDA between $9.6 million and $11.6 million.

• Anticipate a small impact on gross margin due to tariffs.

Q: Brian Holland from D.A. Davidson asked about North America digital business, including where success is seen, investment in channels, and investment levels leading into 2026.

A: Shane Jones said Amazon, DTC, and social commerce businesses are doing well, investing in digital advertising as long as return on ad spend and customer acquisition costs are advantageous. Ken Romanzi added TikTok is a great social commerce avenue and autoship program is effective.

Q: Alec Legg on for Susan Anderson asked about third quarter growth, power line launch, and SG&A.

A: Shane Jones said growth is from combination of past work coming to fruition, including digital growth, APAC timing, and Europe growth; power line will be phased in multiple markets; SG&A will continue to be invested as long as there are good return opportunities.