Nature's Sunshine Products (NATR) Q2 2024 earnings summary

Executive summary

• Q2 2024 net sales were $110.6 million, down 5.1% year-over-year (3% in constant currency), impacted by macroeconomic headwinds in Asia, digital disruptions in North America, and a strong prior year comparison.

• Gross margin fell 125 basis points to 71.4% due to inflation and unfavorable FX.

• Operating income was $5.6 million (5.1% of net sales), down 19.9% from last year; GAAP net income was $1.3 million ($0.07 per diluted share), a 44% decrease.

• Adjusted EBITDA was $10.4 million, down 8% year-over-year.

• Strategic actions included a North America digital platform upgrade, rebalancing in Asia Pacific, and $5 million in annualized SG&A expense reductions.

Financial highlights

• Net sales: $110.6 million, down 5.1% year-over-year (3% in constant currency); gross margin: 71.4%; operating income: $5.6 million; net income: $1.3 million ($0.07 per diluted share).

• Adjusted EBITDA: $10.4 million, down from $11.3 million year-over-year.

• SG&A expenses: $38.6 million (34.9% of net sales), down from $42.3 million (36.3%).

• Cash and cash equivalents: $68.7 million as of June 30, 2024; zero debt.

• Capital expenditures: $7.0 million for the first half of 2024.

Outlook and guidance

• Full-year 2024 net sales guidance lowered to $436–$445 million, reflecting a 200 basis point FX headwind and constant currency growth of 0–2%.

• Adjusted EBITDA guidance revised to $39–$42 million.

• Growth expected to accelerate in North America digital business and continue in Europe, especially Central Europe.

• Management continues to invest in process improvement, supply chain, and organic growth opportunities.

• Cash from operations and current liquidity are considered sufficient for short- and long-term needs.