NATURES SUNSHINE PRODUCTS INC Q1 FY2026 earnings call

CEO Kenneth Romanzi noted a strong first quarter with sales and EBITDA growth, driven by regional growth, digital channel strategy, and active consultants. CFO L. Shane Jones detailed regional performance, digital business growth, subscription Autoship's role, gross margin improvement, SG&A expenses, balance sheet status, and 2026 outlook. CEO also outlined the Vision for Growth including digital expansion, U.S. brick-and-mortar retail exploration, direct selling market penetration, new market expansion, brand positioning, product innovation, supply chain efficiency, and capital allocation.

Net sales in the first quarter were $122.9 million, representing a 9% increase versus the year-ago quarter, or a 7% increase excluding the impact of foreign exchange rates. In North America, Q1 sales grew 9% year over year to $38.3 million, with digital business increasing 42% and subscription Autoship accounting for 48% of digital sales. Asia Pacific sales grew 7% year over year to $52.2 million, and Europe sales increased 9% versus the prior year to $26.4 billion. Gross margin increased 116 basis points to 73.2%. Operating income increased 53% to $9.5 million, and adjusted EBITDA increased 33% to $14.6 million.

Reiterating last quarter's guidance, full-year 2026 net sales are expected to range between $500 million and $515 million (4%-7% Y/Y growth). Adjusted EBITDA is guided to a range of $50 million to $54 million (up to 19% Y/Y growth), incorporating cautious stance on Iran conflict impact and investments in technology, customer acquisition, etc.

Closely monitoring geopolitical tensions in Iran given expected impact on inflation and potential short-term impact on consumer buying patterns.

Q: Talk about 15% EBITDA margin longer term.

A: Through scale, with about 1 point from gross margin, 2 points from volume incentives line, and 2 points from SG&A leverage.

Q: New CTO appointment and digital focus.

A: Hiring CTO is crucial for technology evolution, including ERP system, digital growth, AI use, and enhanced investments in technology.

Q: Brands/products driving growth and new products.

A: Nature's Sunshine Products, Inc. and Synergy brands driving growth, with new products including a pan-Asian launch in the works.