Wellness products company Nature’s Sunshine (NASDAQ: NATR) beat Wall Street’s revenue expectations in Q2 CY2025, with sales up 3.8% year on year to $114.8 million. The company’s full-year revenue guidance of $467.5 million at the midpoint came in 1.8% above analysts’ estimates. Its non-GAAP profit of $0.35 per share was significantly above analysts’ consensus estimates.

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StockStory’s Take

Nature’s Sunshine’s second quarter was marked by strong digital momentum and successful geographic diversification, with revenue and adjusted profits exceeding Wall Street’s expectations. Management credited the growth to standout performance in Japan, ongoing strength in Central Europe, and a notable acceleration in North America’s digital business. CEO Terrence Moorehead highlighted, “Our Subscribe & Thrive Autoship program continues to pay dividends as we saw strong growth in both customers and orders in the second quarter.” Despite macroeconomic headwinds in parts of Asia and Europe, targeted marketing and digital engagement efforts helped offset regional softness.

Looking ahead, Nature’s Sunshine’s updated guidance is anchored by continued investments in digital strategy, targeted product innovation, and expansion of recurring revenue programs. Management expects North America to lead growth due to sustained digital adoption, while Asia Pacific faces tough comparisons and lingering trade uncertainty. CFO Shane Jones stated, “If we continue to see the strong returns that we’re seeing, we’ll spend a little bit more [on digital], but that will have a very strong return on that investment.” The company also aims to leverage new product launches, such as Marine Glo collagen, to attract new customers and drive repeat purchases, though these products are expected to contribute incrementally rather than immediately shifting overall results.

Key Insights from Management’s Remarks

Management attributed Q2’s outperformance to robust digital sales, expansion of recurring revenue programs, and effective regional execution, with new product innovation supporting customer acquisition.

• Digital business acceleration: North America’s digital channel grew 34%, driven by increased ordering accounts, improved retention, and a step-up in conversion rates. The Subscribe & Thrive Autoship program, now representing over 50% of direct-to-consumer sales, played a significant role.
• Japan leads Asia Pacific growth: Sales in Japan rose 27%, fueled by success in attracting younger consumers and strong participation in the Autoship program. Management attributed this to strategic adjustments made in the previous year.
• Central Europe momentum: Central Europe reported robust gains, supported by disciplined cost management and the popularity of Power Line products. Expansion into the Baltic states and increased average order value signaled higher customer engagement.
• Field execution improvements: North America’s core practitioner and retail partner business saw better activation and sales, attributed to new field staffing, enhanced sales support, and fundamental sales process improvements.
• Product innovation pipeline: New offerings like Marine Glo collagen and the ongoing success of the Power Line range underscore the focus on high-growth wellness segments. Management emphasized that new product launches are designed to build momentum and support long-term customer acquisition.

Drivers of Future Performance

Nature’s Sunshine’s outlook is shaped by continued digital investment, expansion of recurring programs, and cautious optimism in key international markets.

• Sustained digital investment: Management intends to maintain or increase digital marketing spend, provided returns remain strong. Digital remains the primary driver of growth in North America, with management targeting continued 30%+ growth in this channel.
• Asia Pacific headwinds and opportunities: While Japan is expected to deliver strong results, Taiwan and South Korea face macroeconomic and trade-related challenges. Management projects low- to mid-single-digit growth for the region, with performance depending on stabilization in these markets.
• Gradual margin improvement: Despite mix and foreign exchange headwinds, ongoing gross margin initiatives and supply chain adjustments are expected to yield modest gains in the second half. Management does not foresee a significant impact from tariffs due to prior mitigation efforts.

Catalysts in Upcoming Quarters

In the coming quarters, the StockStory team will focus on (1) digital sales momentum and its impact on North American growth, (2) the pace of margin improvement as gross margin initiatives and supply chain adjustments take hold, and (3) the performance of new product launches and recurring revenue programs like Autoship in driving customer acquisition. Developments in Asia Pacific, especially in Japan and Taiwan, will also be key indicators for sustained international growth.

Nature's Sunshine currently trades at $16.50, up from $13.90 just before the earnings. In the wake of this quarter, is it a buy or sell? See for yourself in our full research report (it’s free).

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