NATR - Earnings call transcript Q3 2024 | Nature's Sunshine Products, Inc.

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Good afternoon, everyone, and thank you for participating in today's conference call to discuss Nature's Sunshine financial results for the third quarter ended September 30, 2024.

Joining us today are Nature's Sunshine's CEO, Terrence Moorehead; CFO, Shane Jones; and General Counsel, Nate Brower.

Following their remarks, we'll open the call for analyst questions.

Before we go further, I would like to turn the call over to Mr. Brower as he reads the company's safe harbor statement within the meaning of the Private Securities Litigation Reform Act of 1995 that provides important cautions regarding forward-looking statements. ahead. go please Nate,

Nathan Brower

for may, afternoon, are our for results. the as webcast third everyone on a is to Good November dial-in call and XX forward-looking contains this I'd our in portion to remind via available call expect, often this discuss quarter by that via our and you. telephonic such Investor joining anticipate, statements through terminologies thanks live conference like characterized replay Thank XXXX will hope, other that posted website and of believe, call statements. Relations be similar at information will These ir.naturessunshine.com. The expressions. financial

under reports that any future be Exchange Risk information materially of report differ cause those update company's statements caption speaks not the only disclaims factors And Factors results implied Form today's and provided information by from from Forward-looking the Securities to are the but therein, the in as those date. the Factors actual other XX-K the and Commission. this implied to, performance, with call materially guarantees not company could different the disclosed results limited on duty on annual may herein. of to results are include, The filed statements. and forward-looking

like I Now would CEO Sunshine, to the of call Nature's over to turn the Terrence? Terrence Moorehead.

Terrence Moorehead

quarter to for joining you results. thank today's and want discuss Nate, I you, to our everyone. Thank third afternoon, good call

drive our the continued and to improve expand the in out capabilities, we brand quarter. good our quarter, and to strengthen investments third to all global combined drive consumer third the made strategies, proposition, presence our help costs, executing we've performance During make progress our that growth additional

agenda build initiatives attract different drive the allow remain profitable and execution, to is shareholder will us growth and the excited strategic confident and to taken stage of customers, retain about of advance our that approach value. a our each omnichannel While actions we've we're at more

up prior the the driven local volume basis. benefiting delivered and on $XXX.X versus X% quarter the global to by taken strategies business actions as in the sales, were clearly the response The highest to we've quarter second positive quarter. plans consumer growth amplify a sales a with year results year of this Our are those our third strategies third strong currency million

you our support The to site continued in see mobile-first North for America speeds, continue to helped stability believe improvements while conversion may As positive these And brand. we made consumer the meaningful new America, we savings were to North productivity. platform the rebalance and action, North excited cost incremental digital quarter, platform improve a the we grew remember, our to Pacific, in strategic first the move We improvements as in key and strategic a in improved growth. digital our response load improve technology upgraded initiatives second third portfolio quarter, in to respect to will to creating in capabilities. pathway in upgrade continued future. and Asia implemented With with markets the sales digital rates America's changes XX%

which and momentum tools a to and help more as Moving in retailers. invest Over which retailers. tools practitioners see is about term, improvement positive we specialty invest consecutive is and and we capabilities our build we'll opportunity. North are for X%, the from quarter. forward, that expect time, were American we our on versus sales continues down business as looking a to improving exciting nutritional more digital North omnichannel powerful Overall, the believe second to the stronger, practitioners specialty our modern nutritional for slight continue of an basis in approach Longer changes by a to America momentum health the our expanding available will performance distributors the improve platform, health

Regarding our Korea, in South and more introducing markets second products Japan. packs on action, placed like emphasis Taiwan consumer-friendly greater we strategic

dividends in customer The increases order to invested third field strong activity. story. also quarter and Korea, the generate in of support activation China XX%, a We leading in and and to respectively. incremental growth is these surged, programs as Japan X% significant paid XX% strategy and different and sales Taiwan field

more favorable continue but environment their suggests to sharp behavior. negatively research leading affected cautious attitudes has in downturn that Our consumers the spend, to supplements, the macroeconomic have to willingness purchase towards

China's a local sales year currency. quarter decreased in result, XX% versus third As prior

the significant our believe us goal product platform to to our and basis. by, as to strategies continue and align our preferences; more program long-term are introducing Autoship sales consumers' and in purchases. our strengthening to and line customers Thrive upside and solutions, more a expand currency first, live Asia digital year to We X% digital our that to live offer repeat localized successful retain a consumer upgrading Subscribe to of attract branding second, with a with versus third with on Pacific Overall, we packaging is and growth consumer-friendly third, potential response version tool streaming our allow reward powerful is streaming local new to increased quarter pleased encourage prior

to these be to Our we the of our markets illustrative And attractive, potential represent. results long-term by plans proposition building performance working. a improve are consumer-friendly more believe appear

million $X to that Our us delivering cost fund allows to on while strategic continue action of savings improved to contributing focused strategic profitability. annualized third investments

lead I that was shopping to Once again, Jones. experience order continue X% long-term Financial our we're attract strong that, adjusted $XX.X with will made omnichannel to and potential million, a and growth And allow we're set growth in create of the with pleased to For closing, In more Shane? the shareholder Officer, taking. recent be profitable build year. changes very with we've powerful a us over was believe a the turn we the our Shane more want customers, build better business. our will the giving retain while call Chief EBITDA the Ultimately, tools to to about quarter distributors we and their businesses. to value. And sustainable, versus of at coming excited prior to increase direction quarter, which drive

Shane Jones

Thank you, Terrence.

quarter Moving million to year rates. where versus quarter the $XXX.X quarter, year, X% in million excluding results. X% the our $XXX.X the were ago prior third increase, sales Net from exchange a increase the in a compared third foreign impact to

Terrence continued by As and Europe, strong Japan partially China. driven in was weakness offset in this discussed, Central Taiwan and performance by outperformance in

performance. driven field diving in in to which reported up This exchange. initiatives growth impact XX%, $XX.X and growth Now Taiwan, excluding with Japan of when customers. basis regional customer I'll In of APAC. acceleration up and new was led of by the a or very foreign resurgence surge in and we Asia on respectively. the a with X% detail by growth X% a by currency on were our more strategies start constant resulting Pacific, powerful into markets. our by to was largely pleased the driven XX% our a these response We're and momentum important activation This million

on by progress otherwise strong X% quarter. Offsetting expect expect meaningful was in The resulting encouraged the market. year QX The sales year-over-year, growth going in constant growth and expect impact the XX% Korea, we these Chinese sharp for in in back declines Korea demand it this We're forward, constant continued resulting while growth this some to market's consumer this turnaround. working declined to measured customer in in downturn currency new spending. customers refine gaining we we continued quarter trajectory. are time APAC do Both XXXX, are to continues this our the likely in made will China, an proposition levels get weakness While China markets improved value achieved order and average in the in consumer hard confidence the growth environment macroeconomic in negatively quarter. where reenergize not the into in take currency South in macroeconomic QX revenue but at to In and a we are moderate value and improvement.

operate continued in sales XX% increased expansion launched local X% line Our or a well well, by challenging sales the local X% QX market as perform Central positive exceptionally growing our a continued products well environment. Baltic as driven continues to in by largely to recently European to XX% Europe response or new in region. currency, in currency. Power business

European also remarkable a keeping do Our to the job, given Eastern stable protracted continue market our teams Ukraine. in war

Looking America business. at our North

were net X%. quarter third down sales Our

enhance As digital our our we digital last our both discussed capabilities and experience, on and will performance. benefit distributors site customer This strengthen call, consumers. improve first the platform earnings upgraded exciting in and that to transformation America mobile is an performance improve North

digital basis our decreased mask bolstered has the America In customer compared Gross in transition and conversion spend, we and the by our improvement across in digital both the by resulting media efficiency acquisition, short-term in of XXX was improvement continued inflation year key grew initiatives. customer dip a unfavorable a XX%, by points quarter results very margin to and our metrics to favorable the retention. QX exchange, of QX, XX.X% encouraged growth driven foreign business savings to are which The robust in primarily and in decrease ago. higher XX.X% currency third our in While North resulted business.

compared driven primarily and to We of $XX.X results a the were XX.X% in million were due ago improvement incentives more general of becoming results margin Selling, in full to expenses compared financial market in Volume expect savings with ago our XXXX. in percentage increase $XX changes to the the was the sales year administrative quarter. sequential The year mix. during our gross consolidated in initiatives XX.X% third quarter QX apparent in quarter. for as net million

compared last a expenses sales, As third XX.X% year. SG&A the XX.X% quarter percentage net in were of to

and We efficiency continue $X taken benefit of reduce to increase are waste. and cost-out actions the for million look the in of seeing to additional opportunities QX

to year per the $X.X ago note third in income defined or of compared to run quarter. $X X.X% $XX.X compared shareholders ago true year the was our expenses Adjusted release, our or in in $X.XX that rate. of sales roughly quarter. net of $X.X common million GAAP income QX $X.XX million share $X.X to We net million diluted X.X% Operating year common sales EBITDA, or earnings $XX.X share that attributable ago also $X.X quarter. to million or to for the diluted onetime X% million quarter distort million as the to had net in million per increased compared decreased

Our balance the compared is cash which million the was operating of and was $XX.X and activities less third clean by million Net $XX.X million $XX.X million million than equivalents sheet in ended provided at X XXXX. debt. remains $X.X of Inventory worth $XX.X cash cash The and cash to for in end of payments quarter, year-to-date, with by the $X.X of decline year on repurchased timing $XX the approximately by share $X.X prior flows period. million reductions repurchase our accrued driven million in operating offset was program. stock versus prior liabilities year receivables with remaining million we inventory. We

well structure Looking beyond share very digital healthy strategic other repurchases, allocation and positions our our transformation to continue initiatives. capital us

Now turning XXXX to our outlook.

our net full year to $XXX are expect performance prior million between remainder Given the of communicated million million the sales third expectations and for to $XXX range raising million the our quarter. and $XXX year, now we and $XXX quarter XXXX sales range from last

also we quarter opportunity we EBITDA, million. In our front end are to increasing the range by of encouraged third summary, of versus the million are of our in $XX be us. range and million adjusted with $XX the $XX For to million remain previous pleased to results low $XX

the acceleration initiatives of in We progress several business. key are seeing and areas meaningful our on

addition, profitability have as to reduce we the grow. efficiency, steps In improve position continues taken accelerate to business ourselves and cost to

that beyond. XXXX shareholder We in measures will value significant to confident these are and lead

to the turn time back will I the operator. Now

Operator

now will question. the Thank you, Anderson from sir. Ladies Instructions] your first One for come first Genuity. will from line [Operator our of moment, session. Canaccord we question begin the question-and-answer please, and gentlemen, Susan And

Susan Anderson

I quarter. the -- the just be updated guess see on guess I Nice flattish. fourth maybe it implies the to guide, job guide, on there. was good I the raise will wondering quarter

by of expect not to you if continuing. the and guide and more get you how on that for could some You growth Maybe just sales said in to saw Asia region, about color out give to the pan year? the you kind something

Terrence Moorehead

Sounds Shane, don't take that why you one? good.

Shane Jones

Absolutely. Yes.

to up a As top you noted, flattish X% so that of QX on implies a down line. X%, the QX

and As we Taiwan you in look from, very region, results where had that as in APAC we comes the strong know, Japan. at

little Some portion of pulled timing that be that it bit some into a of is bit a QX. of a strength, QX that such We less. will little

obviously, will So to well. be that at lesser QX. results although we next we'll It to it strong strong then expect as regions, in And in continue have won't see the seen. those year we've rate growth be

far a what as will China the trend It down little it's get still As bit we than won't look at down. -- be been be much, it be as will better down to China, continue but will as significantly.

Central at to in that Europe, similar results continue there. perform to see to North high North see look digital but our we to America, to we expected similar well, America some QX in there, teens And the As expect XX%-ish will that. growth core a headwinds do business in we business offset continued and will then

So detail that's by region. the

Susan Anderson

introduced guess Okay. be should talk of product down power road introduced talent? performance in expect packs what line, really are also those the about about in if and the helpful. product that maybe then I Great. you power internationally? That's in guess, the in U.S. the just And you more in both if could then consumer the to And Asia. line? we new And you the markets could talk I the

Terrence Moorehead

Yes, sure. Absolutely.

of in are the old the relates it selling products in And try lot really, but rebalancing of detox there, to products. as So what done and still obviously, the of is packs APAC a to make the we were they place, migration. some a the kind we've of portfolio put

detox. So are and people focus was would And many so you there it only detox. that many only on do a detox so imagine, a times might you year can heavy as

appeal was kind of broader that purchase kind to top often. focus that that, a on a, range more but it were kind of really a packs would in to kind So of shift selling more people adding vitality would, we also people, of driven and frequently of encourage of more

also those And So it's price a rebalanced slightly. packs of nice shift. we kind of the

we and by order that but of going term, that into that average people to we kind some near that orders growth new in orders see we're lower since kind getting what driving coming migrating order has initially, of the customer new knew driving So more programs. was volume been growth, the from we're were people subscription getting offset with slightly we're the in of new and customers repeat our as in,

pleased So about really that.

products question the of percentage continue in It kind balloon double-digit want of as we -- the power sales very America metabolic to, our Europe. piece as kind the with line appropriately achieving expand great power into It and second is I people's The your It marketplace. We'll year-to-date to the continue North of an much. of too think, to We line, those of increasing cautiously the Europe line. all near we about top growth sell progress line. one in don't represents improving really on products. of to is sales up performance. continue kind

aggressively kind shift XXXX, all in those marketing products the and a of greens, it now truly beats the more as see breakthrough one in areas. of actually respective their of much each the half so products products going meal But we're to And of are really system. back and foundational the you'll into X

metabolic for lies They're of line. standpoint and excited performance. result said, each They that delivering I respective are the the really start them, about you combine categories. one capable -- products. are, improving of So results people's when incredible of power of breakthrough what great But their from like pretty they kind products some breakthrough have ahead to they do we're in

So I hope that answers your question.

Operator

for line Now our of from come This Ms. question. the Davidson. next will Instructions] Bolton-Weiser [Operator Linda D.A. from

Linda Bolton-Weiser

color, business. situation? just So but Or narrative just something of is referring give your American the a Is referred the headwinds the strapped about? Can little somebody else to? you very there kind you're North that are part you I talking consumer missed your in more what to of in core beginning,

Terrence Moorehead

extent. of it Yes, little it are just back some minor purchases where to a and is a on consumers of holding piece strapped kind a

piece for Another their distributors a then made the follow-on facing did platform, switch to the kind digital piece of there's when back for is consumer and them orders. of And it the customer of kind helping our end we first. piece process the we

as into just systems see fourth get the the coming we quarter. online into further get full So that's as we alignment and we'll the

platform that. But a it's So result of fourth the on quarter, track. addressed. kind of get be those care time of be then people simply all back will friction points of our think progression build of having taken will and kind it by of moving matter get around are a of of the through -- a we natural momentum some just I will friction and points And just helping be kind that

Linda. So talking were what what we're we that's really speaking to, about,

Linda Bolton-Weiser

you this, then to I'm help reduce missed Okay. to but I improve gross again, the sorry I'm efficiencies and know I just if have initiative costs margin. And wondering,

You one think and any will more for at is, savings point? how Can that. issues had herbs of whether any like there XXXX? And this going then talk or on any you're things hard targets some your in that. other second mentioned cost about some there And and certain input that's with you shortages part point, target? be get any on shortages just the you had Are are to at I

Terrence Moorehead

Yes.

Okay. Absolutely. then I'll Shane and start elaborate. let I'll

incredible there's forward into said really some to get as I'll we mask team the they've upside let more the relates we're that the results. of far to on said as identifying We're savings going kind going has margin So of that XXXX. after, some But savings through driving the believe that initiatives, And they're team facing of to we the as our them everything going we we Shane are of done chase that it those as would do and opportunity do. gross of then done those savings some track. of challenges starting come to kind The job has savings speak to driving see through. an system. we And were

of part was... your question Second

Linda Bolton-Weiser

It or kind of was other about of shortages input. any any herbs

Terrence Moorehead

that that of to Yes, actually get. Frequently, we're good. are, intermittently -- think of are are identifying. like something supply dealing you. are some might very hard there things to then intermittently, of yes, There's I and ingredients. yes. rare Thank I kind there has just kind The other they're team now, There's just be find been -- hard challenging kind supplies things right with said, chain --

service in so chain levels. do some that so that we're supply from a Linda, process, want standpoint. now, reformulating savings? cases, a overcome right a through our and around going of is product products of color can add and availability But kind barrier improve real And really there's that we nothing to you many just commentary around Shane,

Shane Jones

sure. Sure,

additional First $X of just about expect all, more of we've were XXXX, I of year, year, on. roll going This Last give -- starting most was million you previous we year, about already, see to detail. savings another to little in as the $X to realized we million. they a this gotten in those year-to-date,

the additional the into by We So will in end savings to target. year, $XX noted, that do of have come next expect as million achieved as year, Terrence we forward well. going

target. have difficult those meaningful we an as QX and do that that far so inflection have will and well. seen has into a and inflation expect so QX -- in -- then masked P&L. next not it go this gross year see FX improvements in our under exceed that as in improvement increase we that we rates margin of So improvement point in are inflection expect we'll see But at we been in We that been well we a it as has been an point that significant to it's headwind as made amount rates

Operator

session. call now concludes closing this the Mr. turn our to I for to back this remarks. over time, would At question-and-answer Moorehead like

Terrence Moorehead

for look year results you and to we'd Okay. Thank our everybody when care. XXXX. thank again us, to we with and and speaking And listening finally, forward quarter today's to we report fourth you. Thanks call, like in for joining take full

Operator

conclude gentlemen, this and teleconference. Ladies does today's

time. Thank for lines your you participation. disconnect may You your this at

Nature's Sunshine Products (NATR) 7 Nov 242024 Q3 Earnings call transcript