Nature’s Sunshine, a multi-level marketing company based in Lehi, UT, released its annual financial results this week. They showed that overall revenue fell 5.8% in the fourth quarter and 0.7% for the full year.
Nature’s Sunshine reported sales of $ 91.7 million in the fourth quarter of 2019, up from $ 97.4 million a year earlier. For the full year, 2019 sales were $ 362.2 million in 2019 compared to $ 364.8 million in 2018.
Finding a profit in a context of declining sales
But CEO Terrence Moorehead said an effort to cut costs and restructure is paying off. The company reported fourth quarter GAAP net income of $ 1 million, compared to a loss of $ 2.9 million in the fourth quarter of 2018. For the full year, the company recorded a loss of $ 0.5 million compared to a loss in 2018 of $ 2.2 million.
âIn 2019, we began to strengthen the foundations of our business and restructure $ 10 million in organizational costs. As we move forward, our cost reduction initiatives will continue, but we will also launch several strategic initiatives â,Moorhead said on an earnings conference call with analysts. The call was posted as a transcript on the site searchalpha.com.
Moorehead said the company will focus on redesigning the company’s website and digital sales platforms to “Make it easier to do business with us”. The company has faced poor online interactivity in the past. A Oracle software upgrade failed in 2017Significantly hurt profits.
Jump on the hemp train
Nature’s Sunshine sells a variety of dietary supplements under its own brand and that of Synergy Worldwide. The company launched a line of hemp products in the fourth quarter under the Qemp, or Quality Hemp brand, which combines full-spectrum hemp extracts with other herbs and essential oils. Moorehead said the company’s track record of quality manufacturing would serve him well in this area of ââthe market.
âWe were delighted to enter the CBD market and to have created a unique and revolutionary product line that takes CBD to the next level. Our focus on traceability and improved supply will enable Nature’s Sunshine to deliver active compounds that offer better performance, better quality and better transparency â,he said.
Sales drop in Asia and COVID-19 won’t help
Nature’s Sunshine net sales declined in Asia, North America and Latin America. Sales grew strongly in Europe, driven mainly by good results in Poland and Russia. Moorehead said the COVID-19 crisis would certainly affect the company’s bottom line, but couldn’t be more specific. The company’s Singapore office only recently reopened, and the industry conference for distributors that was scheduled to take place this month has been canceled.
Nature’s Sunshine share price fell slightly after the results were announced. The company’s shares are trading at around $ 7.85 a share today, up from a recent high of $ 16 in 2016.