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NATURES SUNSHINE PRODUCTS INC (NATR)·Q3 2025 Earnings Summary

Executive Summary

  • Record quarter: revenue $128.3M (+12% YoY, +10.5% cc) and adjusted EBITDA $15.2M (+42% YoY); GAAP diluted EPS $0.30 vs $0.23 last year .
  • Broad-based strength: APAC +17% (Japan +32% cc; China +36% cc; Korea +12% cc), Europe +13% (Central +10% cc; Eastern +14% cc), North America +7% with digital sales up 52% YoY; gross margin rose 200 bps to 73.3% (highest in 15 quarters) .
  • Guidance raised: FY25 revenue to $476–$480M (prior $460–$475M) and adjusted EBITDA to $47–$49M (prior $41–$45M); implied Q4 revenue $119.7–$123.7M and EBITDA $9.6–$11.6M; Q4 SG&A guided to $46–$47M .
  • Estimate beats: Revenue beat by ~$8.0M ($128.3M vs $120.3M*); Primary EPS beat materially ($0.36 adjusted vs $0.16*), driven by digital momentum and margin expansion; adjusted EBITDA outpaced consensus ($15.2M vs $10.5M*) .
  • Near-term catalysts: new CEO appointment (10/29), accelerating digital, Power Line relaunch, and raised FY guide; watch Q4 APAC (flat to down slightly YoY due to tough comp and ~$2M timing shift) and tariffs’ modest margin impact (gross margin to settle in upper 72% range) .

What Went Well and What Went Wrong

What Went Well

  • Digital acceleration: North America digital sales up 52% YoY, with “meaningful improvements in CAC” and strong ROAS; “new digital customers… more than doubled” YoY .
  • APAC revival and subscription: Japan auto ship ≈50% of sales; China launched auto ship earlier this year and already at 12% of sales, supporting re-acceleration .
  • Margin execution: Gross margin +200 bps to 73.3%, “highest in 15 quarters,” driven by cost initiatives (logistics renegotiations, manufacturing efficiency, sourcing, pricing) .

Management quotes:

  • “We’re pleased to report our best quarter ever…” (CFO) .
  • “TikTok has become a really great social commerce… tremendous success over the last quarter.” (CEO) .
  • “Auto ship is the gift that keeps on giving… creates much more retention…” (CEO) .

What Went Wrong

  • APAC Q4 headwind: Field activation pulled ~$2M of sales from Q4 into Q3; APAC Q4 likely flat to down slightly vs very tough comp (+21% cc last Q4) .
  • SG&A stepped up: Q3 SG&A $45.7M (+$4.7M YoY) on incremental digital ad spend and non-recurring items; Q4 SG&A guided higher at $46–$47M (includes $1–$2M non-recurring) .
  • FX/other income normalization: Other income $0.7M vs $2.6M last year (lower FX gains), partially offsetting operating improvements .

Financial Results

Quarterly performance (oldest → newest)

MetricQ1 2025Q2 2025Q3 2025
Revenue ($USD Millions)$113.2 $114.8 $128.3
GAAP Diluted EPS ($)$0.25 $0.28 $0.30
Gross Profit Margin (%)72.1% 71.7% 73.3%
Operating Income ($USD Millions)$6.2 $4.3 $9.0
Adjusted EBITDA ($USD Millions)$11.0 $11.3 $15.2
Net Income Attrib. to Common ($USD Millions)$4.747 $5.333 $5.334

Year-over-year (Q3 2025 vs Q3 2024)

MetricQ3 2024Q3 2025YoY Change
Revenue ($USD Millions)$114.6 $128.3 +12.0%
GAAP Diluted EPS ($)$0.23 $0.30 +30%
Gross Profit Margin (%)71.3% 73.3% +200 bps
Adjusted EBITDA ($USD Millions)$10.7 $15.2 +42%

Consensus vs Actuals (S&P Global)

MetricQ1 2025Q2 2025Q3 2025
Revenue Consensus Mean ($USD Millions)109.28*112.25*120.30*
Actual Revenue ($USD Millions)$113.2 $114.8 $128.3
Primary EPS Consensus Mean ($)0.165*0.16*0.16*
Actual GAAP Diluted EPS ($)0.25 0.28 0.30
Actual Adjusted Diluted EPS ($)——0.36
EBITDA Consensus Mean ($USD Millions)9.75*9.84*10.49*
Actual Adjusted EBITDA ($USD Millions)11.0 11.3 15.2

Values with * retrieved from S&P Global.

Segment breakdown (Q3 2025)

SegmentQ3 2024 Net Sales ($000)Q3 2025 Net Sales ($000)YoY %Const-currency YoY %
Asia$55,293 $64,725 +17.1% +14.9%
Europe$19,615 $22,107 +12.7% +10.0%
North America$33,631 $36,224 +7.7% +7.8%
Latin America & Other$6,076 $5,283 -13.1% -13.3%
Total$114,615 $128,339 +12.0% +10.5%

KPIs across quarters (oldest → newest)

KPIQ1 2025Q2 2025Q3 2025
Digital Sales Growth YoY (%)+19% +34% +52%
DTC Auto Ship Penetration (%)~45% of DTC 53% of DTC >50% of DTC ordering accounts
Volume Incentives (% of Net Sales)30.8% 29.9% 30.7%
SG&A ($USD Millions)$40.6 $43.7 $45.7
Cash & Cash Equivalents ($USD Millions)$86.5 $81.3 $95.6

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Net Sales ($USD Millions)FY 2025$460–$475 $476–$480 Raised
Adjusted EBITDA ($USD Millions)FY 2025$41–$45 $47–$49 Raised
Revenue ($USD Millions)Q4 2025 (implied)—$119.7–$123.7 New detail
Adjusted EBITDA ($USD Millions)Q4 2025 (implied)—$9.6–$11.6 New detail
SG&A ($USD Millions)Q4 2025$41–$42 per qtr (FY guide, Q2 call) $46–$47 incl. $1–$2M non-recurring Raised
Gross Margin (%)Next quarter & FY26 trajectory“Modest improvement” outlook “Upper 72% range” expected Raised
APAC growthQ4 2025Low–mid single-digit back-half Flat to down slightly (tough comp; ~$2M timing shift) Lowered

Earnings Call Themes & Trends

TopicQ1 2025 (Prev)Q2 2025 (Prev)Q3 2025 (Current)Trend
Digital momentum+19% YoY; toolkit planned H2’25; DTC auto ship ~45% of DTC +34% YoY; DTC auto ship 53% of DTC; CAC/retention improving +52% YoY; “lower CAC” and strong ROAS; TikTok/social commerce highlighted Accelerating
APAC trajectoryStrong Taiwan/Japan; FX/tariff prep Japan +27% cc; China stabilizing; back-half low–mid single-digit APAC +17%; Japan +32% cc; China +36% cc; Q4 flat/down slightly on comp/timing Strong Q3; softer Q4
Gross margin+90 bps to 72.1% 71.7%; initiatives offset FX/mix 73.3% (+200 bps); settle upper 72% next qtr/year Structural step-up
Tariffs/macroInventory builds; minimal 2025 GM impact expected Prepared supply chain; modest GM improvement despite tariffs Anticipate small GM impact; upper 72% range Manageable
Europe/Power LineCentral Europe +15% cc; Baltics expansion Central +15% reported; Eastern -5% timing; Baltics strength Europe +13%; Central +10% cc; Eastern +14% cc; Power Line demand Steady growth
China executionEarly stabilization Stabilizing Auto ship launched; 12% of sales; re-acceleration Improving
Product innovationMarine Glow launch pipeline Marine Glow performing ahead Power Line relaunch with Power Balance (Oct-7) Positive mix

Management Commentary

  • “We’re pleased to report our best quarter ever… strategic investments… yielding meaningful improvements across North America, Asia, and Europe.” (CFO) .
  • “Gross margin increased 200 basis points to 73.3%… highest in 15 quarters.” (CFO) .
  • “TikTok has become a really great social commerce… tremendous success over the last quarter.” (CEO) .
  • “Auto ship is the gift that keeps on giving… if we can get people into that early, it just creates much more retention.” (CEO) .
  • New CEO perspective: “We have hundreds of thousands of frontline salespeople… a unique opportunity to strengthen our brand… and accelerate growth globally.” (CEO) .

Q&A Highlights

  • Digital ROI and channel mix: Amazon, DTC, and social commerce all performing; lower CAC enabling incremental ad spend when ROAS is strong .
  • APAC cadence: ~$2M of revenue accelerated from Q4 to Q3 due to field activation; expect APAC Q4 flat to slightly down versus tough comp .
  • SG&A outlook: Near-term elevated to support high-ROI digital ads; Q4 SG&A guided to $46–$47M including $1–$2M non-recurring .
  • Power Line rollout: Phased approach starting in U.S., then other markets; relaunch adds “Power Balance” to the suite .
  • China macro: Stabilized backdrop; execution and new auto ship program are primary drivers of improvement .

Estimates Context

  • Revenue beat: $128.3M actual vs $120.3M consensus*; strength in APAC and North America digital drove upside .
  • EPS beat: Primary (normalized) EPS $0.36 actual vs $0.16 consensus*; GAAP diluted EPS $0.30 .
  • EBITDA beat: Adjusted EBITDA $15.2M vs consensus $10.5M* .
  • FY25 consensus revenue ~$477.9M* aligns with raised guide $476–$480M; consensus FY25 EBITDA ~$48.2M* aligns with guide $47–$49M .

Values with * retrieved from S&P Global.

Key Takeaways for Investors

  • Quarter demonstrated clear operating leverage: gross margin structurally higher (~73%) and digital growth compounding, supporting above-consensus EPS/EBITDA prints .
  • Raised FY guide reduces downside tail risk; implied Q4 parameters provide helpful near-term guardrails for models .
  • Watch APAC Q4 digestion: tough comp plus timing shift (~$2M) likely temper YoY; sets cleaner setup into 2026 .
  • SG&A near-term elevation is intentional given compelling CAC/ROAS; management will flex spend to ROI .
  • Auto ship flywheel expanding (Japan ≈50%, China 12%); enhances retention, frequency, and revenue visibility .
  • Product and channel catalysts (Power Line relaunch, TikTok/social commerce) support continued mix benefits and customer acquisition .
  • Balance sheet optionality (cash $95.6M, no debt) and remaining buyback capacity ($19.3M) provide capital allocation flexibility .