August 09, 2017
Nature’s Sunshine Q2 2017 Net Sales Down 9.0%
Nature’s Sunshine Products Inc., the Lehi, Utah-based natural health and wellness company, recently reported its financial results for the second quarter ended June 30, 2017. Net sales of $81.3 million decreased 9.0 percent compared to $89.4 million in the second quarter of 2016. On a local currency basis, net sales decreased 8.9 percent as compared to the second quarter of 2016.
“Second quarter financial results were negatively impacted by disruptions associated with the implementation of the company’s Oracle ERP system and the incremental costs of the system, as well as continued pressure in Korea,” said Gregory L. Probert, Chairman and CEO. “The ERP implementation primarily impacted sales in North America and we are working to address the issues. While we are disappointed that sales and profits have been impacted during the initial phase of implementation, I am confident that the long-term benefits of the enhanced ERP system will be evident over the coming years. In Korea, the combination of geopolitical and economic challenges and lower distributor engagement have impacted business activity. We are focused on activities to enhance distributor engagement and improve sales trends.”
NSP Russia, Central and Eastern Europe net sales increased approximately 6.3 percent compared to the same period in 2016. NSP Americas net sales decreased approximately 11.9 percent compared to the same period in 2016 (or 11.5 percent in local currencies). Synergy WorldWide net sales decreased approximately 8.0 percent compared to the same period in 2016 (or 8.2 percent in local currencies). China and New Markets net sales decreased approximately 8.6 percent compared to the same period in 2016. Net sales were impacted by $0.1 million of unfavorable foreign currency exchange rate fluctuations.
“We are pleased with the sequential growth in China during the second quarter,” said Probert. “Following the receipt of our China direct selling license in May, we progressed through the initial steps following licensure and saw a positive impact on our sales. While it remains early in the process, we are now in a position to expand our sales efforts and look for further to sequential growth as our direct selling efforts build in this key growth market. As we expand our efforts in China, we will focus on re-energizing NSP Americas revenue following the disruption encountered during the second quarter and work to enhance distributor business activity in Korea.”
The company began the initial implementation of its Oracle ERP system on April 2, 2017, for the company’s NSP Americas segment as well other corporate operations. The implementation of Oracle ERP negatively impacted net sales and profitability during the second quarter of 2017, primarily by causing wait times for calls into the company’s call center to be longer than usual and by causing difficulties within the company’s online product ordering system. The company is addressing these issues and other issues relating to the implementation of the Oracle ERP system. The company anticipates that the implementation of the Oracle ERP system may continue to negatively impact net sales and profitability throughout the remainder of 2017.
For the first six months of 2017, net sales of $164.4 million decreased 4.3 percent, compared to $171.8 million in 2016. On a local currency basis, net sales decreased 4.4 percent compared to 2016. NSP Russia, Central and Eastern Europe net sales increased approximately 13.1 percent compared to the same period in 2016. China and New Markets net sales increased approximately 32.2 percent compared to the same period in 2016. NSP Americas net sales decreased approximately 6.5 percent compared to the same period in 2016 (or 6.3 percent in local currencies). Synergy WorldWide net sales decreased approximately 8.2 percent compared to the same period in 2016 (or 8.9 percent in local currencies).
To read the full Q2 2017 report, click here