Earnings call transcript: Nature’s Sunshine Q4 2024 beats revenue forecast

Nature’s Sunshine reported its Q4 2024 earnings, revealing a revenue of $118.2 million, surpassing the forecast of $109.46 million. According to InvestingPro analysis, the company currently appears undervalued, with a "GREAT" financial health score of 3.02 out of 5. Despite this positive performance and strong fundamentals, the stock fell 3.93% in after-hours trading, reflecting investor concerns over future guidance and macroeconomic uncertainties.

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Key Takeaways

• Revenue for Q4 2024 exceeded forecasts by 8%.
• Stock declined 3.93% in after-hours trading.
• Digital sales saw a 17% increase in Q4.
• Strong growth in Asia Pacific and Europe.
• Conservative outlook due to macroeconomic risks.

Company Performance

Nature’s Sunshine demonstrated robust performance in Q4 2024, with a 9% year-over-year increase in net sales. The company has shown resilience, particularly in international markets like Asia Pacific, which experienced an 18% growth rate. However, sales in North America saw a slight decline, highlighting regional challenges.

Financial Highlights

• Revenue: $118.2 million, up 9% year-over-year.
• Full Year 2024 Net Sales: $454.4 million, a 2% growth.
• Adjusted EBITDA for Q4: $10.3 million, a 6% increase.
• Gross Margin: 72% in Q4.
• Cash and Cash Equivalents: $84.7 million with zero debt.

Earnings vs. Forecast

Nature’s Sunshine’s Q4 revenue of $118.2 million exceeded the forecast of $109.46 million, marking a significant 7.98% beat. This strong performance underscores the company’s successful execution of its growth strategies, despite broader economic challenges.

Market Reaction

The stock’s decline to $14.16 in after-hours trading, a 3.93% drop, suggests investor apprehension about future prospects, despite the earnings beat. While the stock remains nearer to its 52-week low, indicating cautious sentiment, analyst targets range from $21 to $23, suggesting significant potential upside. The stock currently trades at a P/E ratio of 16.56, which InvestingPro analysis indicates is attractive relative to near-term earnings growth potential.

Outlook & Guidance

For 2025, Nature’s Sunshine projects net sales between $445 million and $470 million and an adjusted EBITDA of $38 million to $44 million. The company maintains a conservative outlook, citing potential impacts from tariffs and macroeconomic uncertainties. InvestingPro analysis reveals 8 additional key insights about the company’s prospects, including strong cash flow coverage and robust balance sheet metrics. Subscribers can access these exclusive ProTips and detailed financial analysis for informed investment decisions.

Executive Commentary

CEO Terrence Moorhead stated, "Our fourth quarter performance reflects the strength of our strategy," emphasizing the company’s robust execution. CFO Shane Jones added, "We are taking a conservative stance as we assess the impact of tariffs," highlighting cautious forward planning.

Risks and Challenges

• Macroeconomic uncertainties could impact future performance.
• Potential tariff impacts may affect gross margins by $2-$3 million.
• Regional sales declines, particularly in North America.
• Supply chain and inventory management challenges.
• Competitive pressures in the digital supplement market.

Q&A

During the earnings call, analysts inquired about the potential impacts of tariffs and the company’s digital strategy. Executives detailed regional performance variations and explored the potential for market recovery in Russia, indicating a strategic focus on adapting to evolving market conditions.

Full transcript - Natures Sunshine Products Inc (NATR) Q4 2024:

Conference Call Operator, Nature’s Sunshine: Good afternoon, everyone, and thank you for participating in today’s conference call to discuss Nature’s Sunshine Financial Results for the Fourth Quarter and Full Year Ended 12/31/2024. Joining us today are Nature’s Sunshine CEO, Terrence Moorhead CFO, Shane Jones and General Counsel, Nate Brower. Following their remarks, we’ll open the call for analysts’ questions. Before we go further, I would like to turn the call over to Mr. Brower as he reads the company’s Safe Harbor Statement within the meaning of the Private Securities Litigation Reform Act of 1995 that provides important cautions regarding forward looking statements.

Nate, please go ahead.

Nate Brower, General Counsel, Nature’s Sunshine: Good afternoon, and thanks for joining our conference call to discuss our fourth quarter and full year twenty twenty four financial results. I’d like to remind everyone that this call is available for replay via telephonic dial ins through March 25 and via a live webcast that will be posted on the Investor Relations portion of our website at ir.naturesunshine.com. The information on this call contains forward looking statements. These statements are often characterized by terminology such as believe, hope, may, anticipate, expect, will and other similar expressions. Forward looking statements are not guarantees of future performance and the actual results may be materially different from the results implied by forward looking statements.

Factors that could cause results to differ materially from those implied herein include, but are not limited to, those factors disclosed in the company’s annual report on Form 10 ks under the risk under the caption Risk Factors and other reports filed with the Securities and Exchange Commission. The information on this call speaks only as of today’s date, and the company disclaims any duty to update the information provided herein. Now I would like to turn the call over to the CEO of Nature’s Sunshine, Terrence Moorhead. Terrence?

Terrence Moorhead, CEO, Nature’s Sunshine: Thank you, Nate, and good afternoon, everyone. I want to thank you for joining today’s call to discuss our fourth quarter and full year results. Today, I’ll provide some context for our fourth quarter performance and offer insights into how the business is progressing in the current environment. From there, Shane will take you through our financials in more detail. Let me begin by saying that we’re very pleased to report our fourth quarter results, which saw reported revenue of $118,000,000 or $120,000,000 on a constant currency basis, reflecting strong performance with a 10% increase versus prior year.

Adjusted EBITDA for the quarter came in at $10,000,000 up 6% year over year. In terms of revenues at $120,000,000 the fourth quarter represents the largest single quarter in the company’s fifty two year history. These results demonstrate the strength and potential of our strategies and we’re encouraged by the progress we’ve made. Looking back, you may remember that in the first half of twenty twenty four, we made several strategic changes to the business to improve our competitiveness and build the foundation for long term profitable growth. The first change focused on rebalancing our consumer proposition in several key Asia Pacific markets to place greater emphasis on consumer friendly product packs that offered easy and accessible health solutions to drive customer growth and support repeat purchases.

Since implementing the strategy, we’ve seen a steady increase in customer order growth and in the fourth quarter, we saw strong revenue growth as our marketing programs combined with strong field incentives to deliver a 21% increase in sales versus prior year on a local currency basis. The strong performance was driven by Taiwan, Japan and Korea, which continued to deliver exceptional results. China also showed encouraging signs, delivering positive sales growth in the quarter, driven by a bump in average order size and more stable customer ordering. The team has demonstrated an ability to respond to external headwinds, but there is still more work required to actually stabilize the market. To help navigate the challenging macroeconomic environment, we’re refining our value proposition and leveraging our digital live streaming model to enhance customer engagement.

Overall, we’re very pleased with the progress we’ve made in Asia Pacific as we continue to outpace industry growth, gain market share and drive customer growth. The second change we made focused on strengthening our digital capabilities in North America by upgrading our digital platform, enhancing site functionality and improving mobile first performance. These changes led to improved site load speeds, conversion rates, stability and an enhanced customer experience. We also continue to be encouraged by our Subscribe and Thrive auto ship program that represents about 26% of sales and continues to expand. Overall, digital sales were up 17% in the fourth quarter and increased 22% for the full year, which is more than double the supplement industry’s digital growth rate.

So we continue to gain share in this segment and are on track with our strategy. Overall, North America saw a slight decrease in sales in the fourth quarter with relatively flat sales for the full year. As we move into 2025, we have an exciting opportunity to leverage and extend our digital capabilities to our incredible team of nutritional health practitioners, specialty retailers and affiliates by giving them the digital tools that they need to compete in an increasingly dynamic marketplace. As such, in the back half of 2025, we’ll introduce an exciting new digital toolkit that will help our distributors attract and retain more customers over time. The new toolkit will offer a comprehensive range of sales and marketing tools that will allow distributors to manage customer accounts while deploying email marketing, social media and CRM campaigns to drive sales with full attribution to the user’s account.

Powered by AI decision making, the new tools are designed to extend our digital reach and improve the effectiveness of our nutritional health practitioners, specialty retailers and affiliates. Of course, building momentum will take time as distributors need to learn the tools, adopt new behaviors and regularly follow-up with customers, but we continue to believe there’s significant untapped potential in the market. In Europe, we saw strong performance with Q4 sales increasing almost 8% in local currency, driven by Central Europe, where we continue to benefit from the strength of our Powerline products, solid field fundamentals and effective field activation initiatives. Eastern Europe also showed solid results, though we continue to monitor this region carefully given the current dynamics. Nevertheless, the strategies our team are deploying are working and we expect the positive momentum to continue.

In general, we continue to see signs that emerging external headwinds will negatively impact the market. To push back against the headwinds, we’ve taken several steps including extending contracts with suppliers, building inventory and safety stock reserves, realigning supplier relationships where possible, examining pricing, shoring up workforce staffing, automating certain workflows to reduce overhead and repatriating production to improve efficiency. While these changes are important, there is still a significant amount of uncertainty in the current environment. In closing, we’re very pleased with our fourth quarter results and the progress we’ve made in 2024. Our fourth quarter performance reflects the strength of our strategy and the effectiveness of our regional and local management teams around the globe.

While we recognize the challenges the current environment presents, we’re excited about the opportunities in front of us and are committed to delivering sustainable growth and long term value for our shareholders. In the near term, our outlook remains guarded as we face significant uncertainty related to the geopolitical and macroeconomic environment, cost dynamics and consumer spending. Importantly, our approach is to position the company for long term success and we’ll continue to remain vigilant and flexible as we move through the year, continuing to drive operational improvements and capitalize on emerging opportunities. With that, I’d like to turn the call over to our Chief Financial Officer, Shane Jones. Shane?

Shane Jones, CFO, Nature’s Sunshine: Thank you, Jerence. Moving on to our results. Net sales in the fourth quarter were $118,200,000 compared to $108,900,000 in the year ago quarter, a 9% increase versus the prior year or a 10% increase excluding the impact of foreign exchange rates. As Tunc discussed, this was driven by very good performance across Asia Pacific and Europe. Consolidated net sales for the full year finished at $454,400,000 compared to $445,300,000 in the previous year, representing 2% growth or 4% growth excluding the $7,700,000 headwind from foreign exchange rates.

Looking at sales by market in Q4, I’ll start with APAC. In Asia Pacific, we reported growth of 18% to $56,300,000 or up 21% when excluding the impact of foreign exchange. This was driven by very strong growth in Taiwan, Japan and Korea, where sales on a local currency basis grew 29%, twenty seven % and twenty one % respectively in Q4. The strategies we’ve implemented this year, including changes to our product merchandising and field incentives are working as intended, using significant growth in both customers and transactions. Full year 2024 sales in Asia Pacific were $207,800,000 representing growth of 3% or 8% excluding the impact of foreign exchange.

Sales in Europe during Q4 increased 8%, both on a reported basis and on a local currency basis. Excellent field execution combined with strong adoption of our PowerLine products and continued expansion in the Baltics region drove robust growth in Central Europe where sales increased 17%. Net sales in Europe for the full year 2024 increased 5% or 3% on a local currency basis to $84,800,000 Looking at our North America business, our fourth quarter sales declined by 2% versus last year, but showed a modest sequential improvement from Q3. The year over year decline was driven by weaker than expected customer activation in our core North America business. The decline in the core was partially offset by a 17% year over year increase in digital sales, reflecting the positive impact of our digital strategies.

For the full year 2024, North America sales declined 1% compared to a year ago. The changes are still work in progress, but we are encouraged and remain confident in our ability to drive improvement going forward. Gross margin in the fourth quarter increased six basis points to 72% compared to a year ago. The achievement of our cost savings initiatives is being offset by continued headwinds from inflation and foreign exchange. As we move through the year, we expect improvement as a result of continued cost savings and some abatement in the inflation and foreign exchange headwinds.

However, as approximately 18% of our raw materials are sourced from China, those benefits could be largely offset by the impact of tariffs. Volume incentives as a percentage of net sales were 31.1% compared to 30.1% in the year ago quarter. The increase was primarily due to changes in market and channel mix. Selling, general and administrative expenses during the fourth quarter were $43,700,000 compared to $39,900,000 in the year ago quarter. The rise was due to an increase in variable costs along with one time costs related to our initiatives in Asia.

As a percentage of net sales, SG and A expenses increased to 37% in the fourth quarter compared to 36.6% a year ago. Operating income decreased to $4,600,000 or 3.8% of net sales compared to $5,700,000 or 5.2% of net sales in the year ago quarter. GAAP net loss attributable to common shareholders for the fourth quarter was $300,000 or a loss of $0.02 per diluted common share compared to net income of $9,000,000 or $0.46 per diluted share in the year ago quarter. The lower net income was primarily driven by a one time increase in SG and A as well as unfavorable foreign currency movement and changes in the timing of tax adjustments. Adjusted EBITDA as defined in our earnings release increased 6% to $10,300,000 compared to $9,700,000 in the year ago quarter.

For the full year 2024, adjusted EBITDA was up slightly to $40,500,000 Our balance sheet remains clean with cash and cash equivalents of $84,700,000 and zero debt. Inventory was $59,400,000 at the end of the fourth quarter, which is $7,500,000 less than we ended 2023. Net cash provided by operating activities was $25,300,000 compared to $41,200,000 in the prior year period. We repurchased 540,000 shares for approximately $9,000,000 during the year ended 12/31/2024, with 8,800,000 remaining on our $30,000,000 share repurchase program. Looking beyond share repurchases, our healthy capital allocation structure positions us well to continue our digital transformation and other strategic initiatives.

Now turning to our 2025 outlook. We expect full year 2025 net sales to range between $445,000,000 and $470,000,000 inclusive of an estimated $5,000,000 headwind to growth due to foreign exchange implying year over year growth net of foreign exchange between negative 15%. This more measured pace of anticipated sales growth is a product of the macroeconomic uncertainty that we see in the market today. We are taking a conservative stance as we assess the impact of tariffs on on raw material costs and The U. S.

Economy as a whole. We will also continue to monitor progress with China’s economic recovery and developments in Eastern Europe given the prolonged war. For adjusted EBITDA, we expect a range between $38,000,000 and $44,000,000 This assumes gross margin will be modestly higher in 2025 and that quarterly SG and A will be slightly more than $40,000,000 Overall, we remain optimistic about the business and believe that our strategic initiatives and cost out measures provide a strong foundation to help us to navigate current uncertainty while positioning us for significant future growth and continued profitability. Now I will turn the time back to the operator.

Conference Call Operator, Nature’s Sunshine: Thank you. Ladies and gentlemen, we will now begin the question and answer session. Your first question comes from the line of Susan Anderson for Canaccord. Please go ahead.

Susan Anderson, Analyst, Canaccord: Hi, good evening. Thanks for taking my question. Nice job on the quarter. Hey. I wonder maybe touch on Asia.

It looks like you did see a nice pickup in growth. Maybe if you could talk about the successes there that’s helping to drive the accelerated growth? And then how are you thinking about this region as we look forward? I know you mentioned some macro pressures in your comments, Terry. Is that more related to North America?

Or do you think that’s also going to be an impact globally? Thanks.

Terrence Moorhead, CEO, Nature’s Sunshine: Yes. No, in terms of Asia Pacific, we really have great momentum there. I think the strategies that we put in place, as both I mentioned and Shane mentioned, appear to be working, doing exactly what we wanted them to do. And the idea there was to hit the right price points with the right bundle of products that consumers can understand that will help us attract more new customers. And then, they’re at again at price points and a level of daily usage that people will keep coming back to buy them.

And so I think the combination of the merchandising along with the introduction of Subscribe and Thrive in those markets really helps build this new customer acquisition followed by repeat purchases. So that combination seems to be working and then we paired that up with some field incentives in the back half of the year just to motivate the field organization to really become active and drive sales through the business. So I think that combination really worked going forward. Our anticipation is that we’ll continue to have strong growth. I don’t think we’ll continue to have 20% -plus growth necessarily.

That certainly wasn’t what we’re looking for. But I think we’re expecting good robust growth driven by field fundamentals and a marketing proposition that makes sense to people. And in terms of the kind of macroeconomic challenges that we face, I think those are largely focused on China, which is still a relatively small portion of the portfolio. But also the foreign exchange impact, which has been somewhat considerable going forward and that will have an impact on consumers around the world. But But we do expect consumers in North America, and you mentioned that, to be impacted by some economic pressures as well.

You can start to see just a fair amount of uncertainty with consumers today. Do I leave anything else, Shane? No. I don’t think so. Yes.

Susan Anderson, Analyst, Canaccord: Okay, great. And then maybe if you could talk about, I guess, where you’re at with the upgrade of the digital business in North America. Is that, I guess, 100% complete now, not only the e commerce business, but I guess the distributor part of the digital business as well? I know you talked about rolling out some new tools for distributors. I guess, when should we think about those being in place?

And maybe if you could give some more color there on kind of the tools that will add for them? Thanks.

Terrence Moorhead, CEO, Nature’s Sunshine: Yes. So from a digital platform standpoint, I think we’re largely set. There’ll be a series of things that we need to do to just refine our approach. Just like any digital business, you’re constantly kind of fine tuning and refining your approach and making sure that you’re being as efficient and as effective as possible. So that’s an ongoing challenge for us, just like any other digital business.

So, we’ll obviously put attention to detail there. In terms of the new toolkit that we’ve talked about, to date, we’ve had some sharing tools for our distributors and we’ve had replicated websites for them, so they can send out links and people can click through and they still get credit for their sales. But now we’re talking about something really completely different where they will have at their disposal a full complement of tools where they’ll be able to send out emails, social media posts, manage CRM follow-up campaigns with their customers and it’s all there’s AI kind of backing to this, so that they can get recommendations on who to contact this week and what to follow-up on. And it’s a whole kind of mobile based system that they’ll have at their disposal. So we’ll probably be launching that, like I mentioned, in the back half of the year.

I would anticipate late third quarter, maybe early fourth quarter. But it’s going to be a fairly kind of significant rollout and we’ll pace ourselves with it so that we make certain that as we’re turning this tool over to our distributors, they know how to use it. It gets fully integrated into their day to day processes. And again, the intent here is to allow them to manage their businesses more effectively and to give them greater outreach in the marketplace.

Susan Anderson, Analyst, Canaccord: Okay, great. That sounds exciting. Maybe if I could add one more than two. I guess just on the tariff impact you mentioned that there probably would be I guess depending on what the tariffs end up being, but potentially a raw material cost. Maybe if you could quantify what that could be and are these raw materials coming from China or other countries?

Thanks.

Terrence Moorhead, CEO, Nature’s Sunshine: Yes. And we have taken some preventative measures to try and minimize the impact of any tariff activity. I mentioned that we have some extended contracts in place. We’ve also kind of tried to build our inventory and safety stock reserves. But you can’t cover up everything and maybe I’ll let Shane speak to kind of where we think the tariff impact might land.

Shane Jones, CFO, Nature’s Sunshine: So we have modeled out, obviously, it’s a moving target and that this is literally changing by the hour. But we have modeled out the tariffs that have been talked about and proposed at this point in time and what that impact would be on our business. If all of those were enacted and we’re on we’re present for the entire year, we would expect a $2,000,000 to $3,000,000 impact to our gross margin. But obviously, that could change, just a moving target.

Terrence Moorhead, CEO, Nature’s Sunshine: Historically also, when there are tariffs, we have seen exceptions for products in the health space and supplement space that this time we just don’t know. As Shane mentioned, it’s changing day to day, sometimes morning to evening.

Susan Anderson, Analyst, Canaccord: Okay, great. Thanks for the color there. Good luck for this year.

Terrence Moorhead, CEO, Nature’s Sunshine: Thank you.

Conference Call Operator, Nature’s Sunshine: Thank you. And your next question comes from the line of Linda Bolton Weiser from D. A. Davidson. Please go ahead.

Terrence Moorhead, CEO, Nature’s Sunshine: Thank you. Hey, Linda.

Linda Bolton Weiser, Analyst, D.A. Davidson: Yes. Hi. So just on the tariffs, just to follow-up. Are you saying that $2,000,000 to $3,000,000 would be just I mean, does that impact include retaliatory tariffs or does it not include retaliatory tariffs?

Shane Jones, CFO, Nature’s Sunshine: It does include the retaliatory tariffs that have been discussed at this point in time. So those I believe are right now proposed to go into effect in April. If those happen in April, then yes, those are included.

Terrence Moorhead, CEO, Nature’s Sunshine: And if they go through the whole year?

Shane Jones, CFO, Nature’s Sunshine: If they go through the whole year, right.

Linda Bolton Weiser, Analyst, D.A. Davidson: Right. So I’m more talking about, because you make a lot of product in The U. S. For other parts of the world. Am I remembering that correctly?

Shane Jones, CFO, Nature’s Sunshine: Yes. So about 60% of what we produce, we produce in The United States. And yes.

Linda Bolton Weiser, Analyst, D.A. Davidson: So I guess what I’m wondering 80%

Shane Jones, CFO, Nature’s Sunshine: of what we produce is in The United States. I thought it was Right. Sorry, sorry, sorry. I misunderstood. Linda, were you asking what we produce or what we purchase?

Because what we produce 80% is in The United States, what we purchase 60% is in The United States, just to clarify.

Linda Bolton Weiser, Analyst, D.A. Davidson: Right. So I guess what I’m concerned about is that your products made in The U. S. That you’re shipping to other markets that you’ll have tariffs imposed on that as retaliatory measures by like Canada. Just as an example, I don’t know if you ship from The U.

S. Into Canada. I don’t know how much business you do in Canada. But is that like that’s the retaliatory tariffs I’m asking about.

Shane Jones, CFO, Nature’s Sunshine: Okay. Yes. So those retaliatory tariffs, we are not included in that $2,300,000

Linda Bolton Weiser, Analyst, D.A. Davidson: Okay. But I mean, I would think they could be fairly significant if all the countries around the world are going to do retaliatory tariffs.

Shane Jones, CFO, Nature’s Sunshine: It’s really impossible to say what that looks like. So we haven’t been able to estimate that at this point in time.

Terrence Moorhead, CEO, Nature’s Sunshine: Based on what we know, I mean, sales in Canada are relatively small, sales in Mexico relatively small.

Shane Jones, CFO, Nature’s Sunshine: Yes. The biggest impact would be Asia.

Terrence Moorhead, CEO, Nature’s Sunshine: Yes.

Shane Jones, CFO, Nature’s Sunshine: And we don’t know of any at this point in time what that would look like.

Terrence Moorhead, CEO, Nature’s Sunshine: Most of the products in China are produced there. Right. So that’s not an issue. Right.

Susan Anderson, Analyst, Canaccord: Okay. And

Linda Bolton Weiser, Analyst, D.A. Davidson: then, for The Korea and what’s the other big market in Asia that you have? Taiwan. Japan. Taiwan, Japan and Korea. So where is that production for those markets?

Shane Jones, CFO, Nature’s Sunshine: It is 80% in The United States. But at this point in time, there is no discussion of retaliatory tariffs for them.

Linda Bolton Weiser, Analyst, D.A. Davidson: Yes. That would change. Right. Okay. Got you.

And then moving on to just the sales performance in Asia, it was really, really good. And it looks to me like the difference, the swing factor that made it so much better than third quarter was China and Korea. So China was down over 20% or something like that in the third quarter and you said it was up in the fourth quarter. Yes. How much was it off?

Shane Jones, CFO, Nature’s Sunshine: That’s correct. It was really the real impact was Taiwan was a big part of that. Very, very strong growth there. Japan and Korea, all three. But then yes, you’re correct that China instead of declining and it was actually up slightly in Q4.

Linda Bolton Weiser, Analyst, D.A. Davidson: Right. But I think This

Shane Jones, CFO, Nature’s Sunshine: is smaller market.

Linda Bolton Weiser, Analyst, D.A. Davidson: Right, right, right. But like Japan was also strong in the third quarter. It’s not like a difference. It’s not changing. Japan was strong in the third quarter and in the fourth quarter, right?

Shane Jones, CFO, Nature’s Sunshine: Right. Okay. Correct. Fair enough.

Linda Bolton Weiser, Analyst, D.A. Davidson: Yes. So I’m

Terrence Moorhead, CEO, Nature’s Sunshine: But they really took off. Both Taiwan and Japan really took off in the fourth quarter. Taiwan up 29%, I think Japan was up 27. Japan was up 27%.

Shane Jones, CFO, Nature’s Sunshine: Twenty seven % and Korea Twenty One Percent.

Terrence Moorhead, CEO, Nature’s Sunshine: Yes. So really, really like a nice just acceleration. But it was great having China be kind of up two points. That was certainly nice.

Linda Bolton Weiser, Analyst, D.A. Davidson: Right. So Korea was flat in the third quarter and now it was up 21%. So Korea is like that’s the change like right?

Shane Jones, CFO, Nature’s Sunshine: It’s a big part of the change. If you’re looking sequentially from Q3 to Q4, you’re correct. Korea is a big part of that.

Linda Bolton Weiser, Analyst, D.A. Davidson: So then is that sustainable in Korea? Because Korea has been kind of sluggish for a while. I mean, is that quite sustainable, do you think?

Shane Jones, CFO, Nature’s Sunshine: I think growth is sustainable, but not at 21%. Right.

Linda Bolton Weiser, Analyst, D.A. Davidson: You’ll remember

Terrence Moorhead, CEO, Nature’s Sunshine: Linda, we’ve been working on the fundamentals there, our field fundamentals and really putting in place that new merchandising kind of concept for it took a good four quarters really to start building that momentum. And so and now we’re starting to see it. But again, we don’t expect to see that type of growth in Korea on an ongoing basis. But we do expect positive momentum to continue.

Linda Bolton Weiser, Analyst, D.A. Davidson: Okay. Yes. No, that’s really good to see because it’s I know you’ve been working on Korea, so that’s really, really good. So can I just ask you can I ask you about Russia? Because I know you used to have a really good business there and then kind of some of it shifted to other countries around there with the war going on.

If the war ends like in 2025, do you think some of that business actually in Russia will come back to you or is it kind of gone forever?

Terrence Moorhead, CEO, Nature’s Sunshine: No, It’s hard to say and we haven’t built anything into our plans. We still have infrastructure there to do business. We certainly have the capability to drive sales in the marketplace. A lot of it depends on what happens with the currency and consumers’ ability to spend. But I think we’re overall, we’re well positioned and well situated in Central And Eastern Europe.

We’d be eager to see some stability in the region.

Linda Bolton Weiser, Analyst, D.A. Davidson: So your Eastern Europe business is which countries now?

Terrence Moorhead, CEO, Nature’s Sunshine: It’s, so well, Central And Eastern Europe would include Poland, the Baltic States, Slovenia, Slovakia, Ukraine is in there, kind of Russia is in there, Belarus.

Linda Bolton Weiser, Analyst, D.A. Davidson: Okay. Okay. And then, let’s see. I just wanted to see

Terrence Moorhead, CEO, Nature’s Sunshine: And again, right now, Linda, just to be specific, the real growth is being driven by Poland, the Baltic States, Slovenia, Slovakia. I mean, that’s where we’re seeing double digit growth, 17 plus percent growth and really driving market penetration.

Linda Bolton Weiser, Analyst, D.A. Davidson: Right. Yes. That’s great. And then I just was curious if you could tell us the percentage of revenue in North America and for the total company that is digital in the fourth quarter or for the year, whichever?

Terrence Moorhead, CEO, Nature’s Sunshine: When North America is about 25%?

Shane Jones, CFO, Nature’s Sunshine: It’s about 25%. It’s, yes, I do the math. It’s about $30,000,000 for the year. Yes.

Terrence Moorhead, CEO, Nature’s Sunshine: And then again, you’ve got our business in China that’s 100% digital live streaming. So that’s just how they go to market there. And then we have kind of various hybrid digital activation throughout the world with people ordering digitally, but not the same type of DTC business that we would have in North America. As you remember, Linda, North America was kind of the pilot of for us to really drive a pure digital kind of business. And then again, you do have China, I would say is very digital as well with 100% of the sales coming through digital live streaming.

So hopefully that’s helpful.

Linda Bolton Weiser, Analyst, D.A. Davidson: Yes, yes, it is very helpful. And then I think that was all my questions actually. Thank you very much. I appreciate it.

Terrence Moorhead, CEO, Nature’s Sunshine: Yes, great. Good hearing from you.

Conference Call Operator, Nature’s Sunshine: Thank you. At this time, this concludes our question and answer session. I would now like to turn the call back over to Mr. Moorhead for closing remarks.

Terrence Moorhead, CEO, Nature’s Sunshine: Okay. Well, thank you. I want to thank everybody for listening to today’s call. And we look forward to speaking with you again when we report our first quarter twenty twenty five results. And again, thanks for joining us and goodbye.

Conference Call Operator, Nature’s Sunshine: Thank you. Ladies and gentlemen, this concludes today’s conference. You may disconnect your lines at this time. Thank you for your participation.

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