Nature's Sunshine sales grow, especially in China, but profits prove elusive
Nature’s Sunshine sells products under its own name and under Synergy Worldwide. The company markets a broad array of dietary supplements. The company is based in Lehi, UT, but does business in markets around the globe.
Nature’s Sunshine, which celebrated its 45th last year, is one of the oldest network marketing companies in the industry that focuses on nutritional products. The company was ranked as the world’s 49th largest MLM (multi-level marketing organization) on the annual list put out in May by Direct Selling News. That was down from No. 44 on the 2015 version of the list, but up one spot from its ranking last year.
In its second quarter, the company recorded $91.3 million in sales, a 12.2% year over year increase. But it made only about $100,000 in profit on those sales. But CEO Greg Probert, who has announced his impending retirement, said the company has made strides on cutting costs.
“We generated strong second quarter sales growth compared to the prior year period, which combined with our focus on cost controls led to improvement in both net income and EBITDA compared to the prior year,” Probert said in a statement.
A bright spot for the company was South Korea, which helped drive an overall 36.2% increase in sales in the Asia Pacific region, where the company does business as Synergy Worldwide.
China finally coming through
The company was a late entrant to the Chinese market, which has placed special regulatory requirements on MLMs. It took the company several years to finally be approved for a direct selling license, a period in which investments made to enter that market could show no return.
But sales in China, which are accounted for separately from the rest of Asia, are now starting to make a significant contribution to the company’s bottom line. Nature’s Sunshine recorded $6.8 million in sales, which represented a 53.5% increase year over year.
“In China, we dedicated management resources to increasing the engagement of our independent service providers over the past several months and are pleased with the sequential and year over year sales growth generated during the quarter. We still remain early in the development of our direct selling operations in China and will continue to focus on broadening our leadership and driving a long-term growth opportunity in this promising market,” he said.
The company also saw strong growth in Russia and Eastern Europe. But sales declined sharply in Latin America and slightly in North America, where Probert lauded the “moderated rate of decline.”
