Which brands and products drove growth in each region, and were there any standouts?

In APAC, the Synergy brand (Taiwan, Korea, Japan) saw 11% growth, driven by core products and a recently launched skincare line that country managers aim to make a significant portion of sales. In Nature's Sunshine markets (North America, Europe, China), gut health products and systems are the top sellers in North America, with overall growth being an amalgamation of many products. “So when we talk about APAC growth, most of the growth and most of the business is Synergy in those 3 countries; Taiwan, Korea and Japan. And Synergy is really I mean it's just been -- the APAC has been on a roll for a long time. That system was up 11% in the second quarter, continued strong growth across the countries. And it's really core products that have been around for a long time, they have a formula and they just keep replicating and duplicating that formula.”

What type of acquisitions is the company looking for, in terms of product category, region, and business model (DTC vs. retail)?

The company will be very selective, focusing on supplement businesses that can be absorbed into their existing supply chain and manufacturing facilities to generate self-manufacturing margin and synergies. They prefer diversification (DTC, retail, geography) but are not ruling out direct selling. The product and category must have growth potential, with the primary goal of being complementary and accretive to earnings. “Number -- so we're very, very clear. That's why we're going to be very, very selective. Number one, we are going to be in the supplement business. it will be something that we can absorb in our supply chain. That is a very critical factor. We have excess capacity in our manufacturing facility, so we will be looking at something that we can fold into our manufacturing facility so that we can generate all the self-manufacturing margin and the synergies that come along with that.”

NATR

Nature's Sunshine (NATR) Q2 FY26 earnings call: guidance and Q&A

Earnings call· Jun 2026 (Q2 FY26)· Consumer Staples· Aug 6, 2026

Source: earnings call transcript

Executive summary

Nature's Sunshine Q2 FY26 — Digital Growth and Strategic Investments Drive Sales Amidst China Weakness

Nature's Sunshine delivered a solid second quarter, driven by strong digital expansion and strategic investments under its "Vision for Growth" initiative. While facing headwinds from foreign exchange rates and operational issues in China, the company achieved record Q2 sales and significant gross margin expansion. Leadership changes and plans for direct selling reinvigoration in North America, alongside new market entries, underscore a commitment to accelerating long-term growth towards a $1 billion sales target.

Highlights

Net sales grew 4% in constant currency to $117 million, marking the strongest Q2 in company history.
North America digital sales increased 26% year-over-year, with new customers up 26%.
Gross margin expanded by nearly 200 basis points to 73.7%, the highest in over 4 years.
Synergy Eagle system sales in APAC (excluding China) grew 11% versus last year.
European sales increased 4% year-over-year, driven by 12% growth in Eastern Europe.

Concerns

Net sales guidance for FY26 was lowered to $490 million-$500 million from $500 million-$515 million.
EBITDA guidance for FY26 was lowered to $48 million-$52 million from $50 million-$54 million.
China sales were down 20% due to operational issues, reversing a recent growth trend.
North America's direct selling business has been soft for several years, despite digital strength.
Net cash used by operating activities was $1.1 million, compared to cash provided of $6.9 million in the prior year.

Guidance & targets

Category	Target	Timeline	Confidence
Net Sales	$490M-$500M high materiality	FY26	Medium
Adjusted EBITDA	$48M-$52M high materiality	FY26	Medium
Long-term Sales Target	$1B high materiality	Long-term	High
Long-term EBITDA Margin Target	15% high materiality	Long-term	High
Germany Sales	$1M low materiality	FY26	Medium
New Asian Country Expansion	Launch medium materiality	2027 · FY27	Medium
North America Direct Selling Reinvigoration	Complete reinvigoration medium materiality	Early 2027 · FY27	High
Quarterly SG&A Expenses	$45M-$47M medium materiality	Remainder of 2026 · FY26	High
Gross Margin	low to mid 73% range medium materiality	Remainder of 2026 · FY26	High

Segment performance

Segment	Revenue	YoY	QoQ	Margin
Total Company Strongest second quarter in company history. Grew 4% on a constant currency basis.	$117M	2%	—	—
Asia Pacific Growth was lower than expected. Outstanding growth in Japan offset by weakness in China. Constant currency growth: 5%	$53M	1%	—	—
Japan Outstanding growth, driven by expansion into Fukuoka.	—	50%	—	—
China Experienced weakness due to operational issues, reversing a recent growth trend of over 30%.	—	-20%	—	—
Synergy Eagle system (ex-China) Continued strong momentum in markets like Japan, Taiwan, and Korea.	—	11%	—	—
North America Strong digital growth, but direct selling business has been soft. Total sales growth of 6% through the first half of the year. Digital business growth: 26%New customers (digital): up 26%Autoship accounting for total orders (website): 36%Social commerce growth: 177%Autoship in social commerce revenue: 60%	$36M	3%	—	—
Europe Solid results driven by Eastern Europe, fueled by improved product availability despite regional unrest. Eastern Europe growth: 12%	$26.7M	4%	—	—

Product announcements

Product	Type	Timeline
Live on the Bright Side	launch	Fall 2026
New product pipeline	roadmap	Fall 2026 and early 2027
Synergy skincare line	launch	—

Risks & headwinds

China operational issues Q2 FY26, expected short-term

down 20%

Mitigation:Company believes issues are short term in nature and will be worked through in H2 FY26.

Foreign exchange rates Q2 FY26 and remainder of FY26

2% negative impact on net sales

Mitigation:Reflected in lowered FY26 guidance.

North America direct selling business softness Ongoing

soft for several years

Mitigation:Planning a complete reinvigoration of the direct selling system beginning early 2027, including new product, compensation, and incentives.

Unrest in Eastern Europe Ongoing

Despite continued unrest

Mitigation:Improved product availability to ensure appropriate in-stock levels for key products.

What to watch in Q3 FY26

China sales recovery

H2 FY26

Current down 20% in Q2

Target Reversal of decline, return to growth

Why it matters

China is a significant market, and its recovery is crucial for overall APAC performance and achieving full-year guidance.

On the one hand, we saw outstanding growth in Japan of 50%. On the other hand, we experienced weakness in China, down 20%, a reversal from its recent growth trend of over 30% over the past year due to a few operational issues. We believe these issues are short term in nature that we will work through in the second half of the year

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Q&A highlights

How did the core North America business perform alongside strong e-commerce, and what is the progress of the Germany launch?

North America sales grew 3% overall, with digital performing well while the direct selling business remained soft. A major reinvigoration of the direct selling system is planned for early 2027. Germany's launch is underway, with an expected $1 million in sales this year, and is ramping up consultant recruitment, aiming for significant long-term growth similar to Taiwan's trajectory.

“North America, in total, North America was up -- which we have 2 numbers in mind, constant dollars, FX dollars about 3% in total North America. And our base direct selling business actually has been soft for several years. And so our digital business continues to perform really well. And a major juncture going forward is early next year, we'll be doing a whole new reinvigoration of our direct selling program, including new product, new compensation plan, new incentives and to really get what is still a very large core business growing as well.”

asked by Susan Anderson · answered by Kenneth Romanzi

2 min read 5 chapters

Detailed narrative

Vision for Growth Strategic Plan

Nature's Sunshine has initiated its 'Vision for Growth' strategic plan, aiming to double the company's size to $1 billion in sales and improve EBITDA margin to 15% from just over 10%. This plan is built on four key drivers: continued digital channel expansion, deeper geographic penetration and expansion into new markets, superior marketing and product innovation, and strategic mergers and acquisitions.

The company believes these investments, combined with its business model, will lead to sustainable accelerated long-term growth.

Digital Expansion and Customer Acquisition

The company's digital business is a significant growth engine, on track to deliver $50 million in sales by the end of 2026, just five years after its launch. North America digital sales increased 26% year-over-year, driven by a 26% rise in new customers.

The autoship subscription program accounted for 36% of total website orders, and social commerce grew 177%, with 60% of its revenue from autoship, indicating higher customer lifetime value.

Geographic Penetration and Expansion

Nature's Sunshine is focusing on deeper penetration in existing markets, exemplified by Japan, where expansion beyond Tokyo to Fukuoka is driving significant growth, with plans for another city in 2027. In the U.S., a complete reinvigoration of the direct selling system is planned for early 2027, including new products and compensation.

Geographically, the company launched in Germany earlier this year and plans to open a new Asian country in 2027 through its Synergy Eagle system, pending government approvals.

Marketing and Product Innovation

The company is launching a new consumer campaign called 'Live on the Bright Side' in the fall to differentiate its brand in the nutritional supplements market. A robust new product pipeline is also planned for fall 2026 and early 2027.

In APAC, the Synergy brand recently launched a skincare line, which country managers aim to grow to 10-20% of total sales over the next 3-5 years, complementing core products like gut health offerings in North America.

Strategic M&A and Leadership Appointments

M&A is identified as a key driver to reach the $1 billion sales goal, with a focus on accretive opportunities in the supplement business that can be absorbed by the existing supply chain and manufacturing facilities. The company also announced key leadership appointments: Ruth Perkins as Chief Financial Officer, bringing experience from Ford, Estée Lauder, and PepsiCo, and Janine Weber as President of North America, a 25-year direct selling veteran from LifeWave and Rodan + Fields, to lead the direct selling reinvigoration.

Summary of the company's earnings call; see how call summaries are prepared. Not investment advice.