Wellness products company Nature’s Sunshine (NASDAQ: NATR) announced better-than-expected revenue in Q1 CY2025, with sales up 2% year on year to $113.2 million. The company expects the full year’s revenue to be around $457.5 million, close to analysts’ estimates. Its non-GAAP profit of $0.25 per share was 51.5% above analysts’ consensus estimates.

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StockStory’s Take

Nature’s Sunshine’s first quarter results were shaped by continued strength in Asia-Pacific and Europe, as well as stabilization efforts in North America. Management credited growth in Japan and Taiwan to strategic marketing, a focus on high-velocity products, and expanded digital offerings, noting that digital sales rose 19% year over year. CEO Terrence Moorehead emphasized that proactive supply chain measures and inventory buildup helped the company manage new tariff risks without immediate price increases to customers.

Looking ahead, management reaffirmed its full-year revenue guidance, citing confidence in ongoing demand and the resilience of its supply chain. CFO Shane Jones noted that the company’s outlook remains conservative due to macroeconomic volatility and potential tariff impacts, but expects modest gross margin improvement and stable SG&A expenses. Moorehead stated, “We’ve tried to do our homework on our end to make sure that we’ve done everything that we can do to prepare to offset...the potential impact of tariffs.”

Key Insights from Management’s Remarks

Nature’s Sunshine’s management focused on operational execution and regional momentum as key drivers behind Q1’s performance. Outperformance versus analyst expectations was attributed to international growth, digital expansion, and effective cost controls, while the company’s proactive response to tariff risks was a recurring theme.

• Asia-Pacific momentum: The region saw double-digit local currency growth, with Japan and Taiwan both delivering over 18% sales increases, driven by a targeted marketing mix and growth-focused product strategy.
• Europe growth strategies: Central Europe’s 16% sales rise was supported by the power line product focus and expansion into the Baltic states, illustrating disciplined execution and market development.
• North America stabilization: Despite a year-over-year decline, North America achieved its third consecutive quarter of sequential order growth, aided by organizational changes and improved digital capabilities.
• Digital and autoship adoption: Digital sales outpaced the broader supplement industry’s growth, and the Subscribe & Thrive autoship program accounted for about 26% of total sales, supporting recurring revenue.
• Tariff mitigation measures: The company increased raw and finished goods inventory, diversified suppliers, and enforced pricing contracts to minimize tariff exposure and supply chain disruption.

Drivers of Future Performance

Management expects ongoing uncertainty from tariffs and consumer sentiment to shape results this year, but highlights digital growth and cost discipline as key levers. Strategic investments in digital tools and field support are expected to foster resilience and incremental growth across markets.

• Digital expansion focus: The rollout of new digital toolkits in North America and continued investment in e-commerce capabilities are expected to drive customer acquisition and retention.
• Inventory and supply chain agility: Elevated inventory levels and supplier diversification are designed to protect margins and service levels if tariff or trade conditions deteriorate.
• Cost management discipline: Continued scrutiny of SG&A expenses and margin improvement initiatives are projected to support operating profit even in a challenging macroeconomic environment.

Top Analyst Questions

• Brian Holland (Davidson): Asked if guidance assumes a worsening macro backdrop or a continuation of current trends. Management said the midpoint reflects ongoing instability, while the upper end assumes Q1 trends continue.
• Brian Holland (Davidson): Inquired about the digital toolkit launch timing and risk of order disruption. CEO Moorehead said it remains on track for the second half of the year and will not disrupt practitioner workflows.
• Susan Anderson (Canaccord Genuity): Asked about sustaining momentum in Europe and Asia given strong recent comps. Management sees continued opportunity but acknowledged tougher comparisons in the back half of the year.
• Susan Anderson (Canaccord Genuity): Questioned strategies for North America practitioner and retailer channels. Moorehead highlighted new leadership, field fundamentals, and digital tools as key to improving performance.
• Susan Anderson (Canaccord Genuity): Sought clarity on gross margin and SG&A cadence. CFO Jones expects modest sequential gross margin improvement and steady quarterly SG&A at $40–42 million.

Catalysts in Upcoming Quarters

In the quarters ahead, the StockStory team will monitor (1) the rollout and practitioner adoption of new digital toolkits in North America, (2) whether Asia-Pacific and Europe can sustain their growth trajectory against tougher year-over-year comparisons, and (3) the effectiveness of inventory and supply chain strategies in mitigating tariff-related cost pressures. We will also watch for evidence that digital and autoship programs continue to drive recurring revenue.

Nature's Sunshine currently trades at a forward P/E ratio of 19.2×. Is the company at an inflection point that warrants a buy or sell? Find out in our free research report.

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