Nature’s Sunshine’s third quarter 2022 net sales were $104.5 million, down 2.3% from the same period last year. Gross profit margin was 71.6%, representing a slight decline from 74.4% during the third quarter of 2021. The company attributed this dip to inflated costs for material, production and transportation as well as exchange rate changes.
Operating income for the company was $5 million (4.8% of net sales), compared to $10 million (8.7% of net sales) during the third quarter of 2021. Adjusted EBITDA was $6.8 million, down from $12.9 million during the same period last year.
“Despite unprecedented external headwinds, we delivered third quarter sales of $105 million on a reported basis, or $112 million when removing the impact of foreign exchange,” said Nature’s Sunshine Chief Executive Officer Terrence Moorehead. “The resilience of our portfolio was on full display, where despite the macroeconomic challenges, we were only down 2% versus prior year on a constant currency basis and year-to-date, sales were actually up 3% in local currency. Both measures reflect the underlying strength of our business.”
The company ended the quarter with cash and cash equivalents of $57 million and $1.5 million of debt.
“The current environment represents a unique challenge as inflation and volatile foreign exchange has dramatically increased our cost of goods, negatively impacting third quarter gross margins by as much as 300 basis points,” Moorehead said. “We are meeting these challenges head-on by committing to gross savings of $10 – $12 million through gross margin and SG&A expense improvement and expect the key initiatives will be launched over the next 18 months. We remain confident that we will navigate this unique period of volatility and uncertainty, bolstered by our strong balance sheet and team of experts on the ground.”