Nature’s Sunshine is a multilevel marketing company based in Lehi, UT. The company sells a broad array of dietary supplements, meal replacement and personal care products in North and South America, Asia and Europe.
Nature’s Sunshine entered the Chinese market somewhat later than some other MLMs, so the Chinese market makes up a smaller share of its operations and its overall results were not as greatly affected as some its peers’ were by the market dislocations there. Face to face meetings, the cornerstone of MLM operations, were halted for most of the quarter in China, and sales were affected in Japan and South Korea as well.
Immune health provides powerful driver
But sales in North America rose by more than 6%, reversing a trend of some years, one that Nature’s Sunshine shared with other MLMs that sell nutritional products, such as Herbalife and Usana. The attraction of the MLM model offering part time income seemed to have waned during a time of low unemployment and steady economic growth. Sales declines were also reversed in the first quarter in South America, where Nature’s Sunshine recorded modest gains.
According to information presented in a recent sales call with stock analysts, Nature’s Sunshine CEO Terrence Moorehead said there was no secret to this success.
“A common driver across all of our global markets was the huge surge in demand for immune products as consumers looking for added protection emptied our warehouse of products like Silver Shield, Elderberry, Immune Defense and many other immune-related products. In total, global sales of immune products increased 110% for the quarter versus prior year,” Moorehead said during the call, which was posted in transcript form on the site seekingalpha.com.
Nature’s Sunshine recorded $95.9 million in net sales in the first quarter of its fiscal 2020, compared to $91.3 million in the same period a year previously. On a local currency basis, that represented a 6.6% gain. Sales in Asia declined 4.6% on a local currency basis, while sales in Europe rose more than 33%, driven primarily by a strong surge in Russia.
Hemp products to help maintain sales momentum
Moorehead said demand for immune health products started to soften in April, leading to some question as to whether the current sales momentum could be maintained at the same pace. As part of that effort, Moorehead said Nature’s Sunshine will be expanding its line of hemp products sold under the brand name Qemp, which he said stands for “quality hemp.” One of the new products will be marketing on a label claim of containing zero THC, while the other is a new topical cream.