Nature's Sunshine Products (NATR 12.78%), a direct seller of nutritional supplements and wellness products, reported second quarter 2025 earnings on July 31, 2025. GAAP revenue and earnings per share (EPS) exceeded Wall Street expectations. Revenue (GAAP) was $114.8 million versus an analyst estimate of $112.25 million, while non-GAAP diluted EPS was $0.35. This strong finish was driven by solid performances in Asia and North America, a slight improvement in gross margins, and continued cost management. However, operating income (GAAP) declined due to higher operating expenses, partially counterbalancing top-line gains. Management raised its full-year 2025 financial outlook, signaling confidence in continued momentum.
| Metric | Q2 2025 | Q2 2025 Estimate | Q2 2024 | Y/Y Change |
|---|---|---|---|---|
| EPS (Non-GAAP) | $0.35 | N/A | $0.07 | 400.0% |
| Revenue | $114.8 million | $112.25 million | $110.6 million | 3.8% |
| Adjusted EBITDA | $11.3 million | $10.4 million | 8.7% | |
| Operating Income | $4.3 million | $5.6 million | -23.2% | |
| Gross Profit Margin | 71.7% | 71.4% | 0.3 pp |
Source: Analyst estimates provided by FactSet. Management expectations based on management's guidance, as provided in Q3 2024 earnings report.
Business Overview and Focus Areas
Nature's Sunshine Products develops and sells a wide range of dietary supplements, herbal products, and personal care solutions. It distributes its products through a global network of independent consultants, utilizing a direct selling model rather than traditional retail channels. The company’s portfolio consists of more than 800 products designed to support various health needs, with a focus on strict quality control and ongoing innovation at its Hughes Center for Research and Innovation.
The company’s recent business direction has prioritized expanding its digital selling capabilities, boosting consultant productivity, and ongoing investment in innovative health products. Key success factors include sustaining robust results from independent consultants, ensuring high product quality, adhering to regulatory standards, and differentiating through branding, digital engagement, and sustainability achievements. Product development and compliance remain at the center of its growth and risk management strategies.
Quarter in Review: Revenue Drivers and Operating Performance
Net sales (GAAP) rose 4% year over year, reaching $114.8 million and beating the consensus estimate by $2.545 million (GAAP). Growth was strongest in Asia (up 5.4%) and North America (up 4.2%), with the company highlighting continued demand in Japan and Central Europe. North America saw gains from digital initiatives and the growing auto-ship, or subscription, program.
Europe showed a slight gain of 0.6%, while sales in Latin America and other regions were nearly flat, declining 0.6%. The underlying constant currency growth was 2%, reflecting a $1.8 million benefit from exchange rates. This indicates that some of the headline revenue increase was helped by currency movements, rather than solely improved regional performance.
Profitability improved at the gross margin level. This small improvement was credited to ongoing cost savings initiatives. However, this benefit was partially offset by changes in regional sales mix and currency shifts.
Selling, general, and administrative (SG&A) expenses increased to $43.7 million, representing 38.1% of sales compared to 34.9% in Q2 2024. This uptick was attributed to higher compensation timing, digital marketing spend, and several non-recurring costs. As a result, operating income declined to $4.3 million from $5.6 million last year (GAAP), with the operating margin (GAAP) down to 3.7% of sales from 5.1%. This reflects that expense growth more than offset revenue and margin gains at the operating level.
Other non-operating income swung positive, with $3.3 million in gains, mainly from favorable currency movements in Asia and Europe. This change was not tied to the core business and significantly lifted reported net earnings for the quarter. Non-recurring items also contributed to the strong bottom-line performance, with non-GAAP EPS adjusted to $0.35.
Adjusted EBITDA, a non-GAAP metric often used to assess company performance by excluding the effects of interest, taxes, depreciation, and amortization, rose 8% to $11.3 million. This improvement underscores continued gains from ongoing cost controls and higher top-line results, even as operating expenses increased.
Incentives paid to consultants, measured as volume incentives, declined from 31.4% to 29.9% of net sales, primarily due to the timing of promotional incentives and changes in product pricing and market mix, but also highlights the need to maintain consultant motivation—crucial in direct selling models.
Share repurchases totaled $12.4 million for the six months ended June 30, 2025, with the company buying back 1.01 million shares at an average of $12.22 each during the first half of 2025. Capital expenditures dropped year over year for the six months ended June 30, 2025, and the company ended the quarter with $81.3 million in cash and no debt, reflecting continued deleveraging and strong liquidity. Inventory increased to $69.3 million as of June 30, 2025.
Product and Segment Developments
Product innovation has been a central theme for Nature's Sunshine Products, with new product packs introduced in Asian markets. These packs, which move beyond the company’s prior emphasis on detox supplements to more broadly aimed “vitality” solutions, have helped attract new customers and encouraged more frequent purchasing. Management noted that this approach brings in new orders and drives users toward repeat purchases via the auto-ship subscription program.
The Power Line—an integrated system of metabolic support products including greens blends, beets, and meal replacement items—continues to drive results in Europe and North America. Management plans to market the entire Power Line as a system in late 2025 to further encourage product adoption.
Digital sales channels and auto-ship programs gained ground during the period.
Regulatory compliance remains a crucial operational area due to the extensive laws governing health supplement sales in many of the company’s key geographies. Product safety, labeling, and consultant activities are under ongoing monitoring to prevent legal or reputational risks.
Looking Ahead
Management raised its outlook for FY2025. The updated guidance projects net sales in a range of $460 million to $475 million for FY2025, up from the previous $445 million to $470 million range for full-year net sales. Adjusted EBITDA is expected to land between $41 million and $45 million for the full year, up from a prior range of $38 million to $44 million for full-year adjusted EBITDA. This guidance increase signals confidence in continued business momentum, buoyed by digital initiatives, cost savings, and regional results in Asia and North America.
The company does not pay a dividend. Investors should keep an eye on operating expense trends, consultant network incentives, and inventory levels. While results benefited from one-time favorable foreign exchange gains, the overall trend for core operating profit and margin was mixed. Monitoring SG&A spending and consultant motivation will remain important for future quarters.
Revenue and net income presented using U.S. generally accepted accounting principles (GAAP) unless otherwise noted.
