NATR Q3 Deep Dive: Digital Acceleration and Subscription Growth Drive Outperformance

Wellness products company Nature’s Sunshine (NASDAQ:NATR) reported Q3 CY2025 results topping the market’s revenue expectations, with sales up 12% year on year to $128.3 million. The company’s full-year revenue guidance of $478 million at the midpoint came in 2.3% above analysts’ estimates. Its non-GAAP profit of $0.36 per share was significantly above analysts’ consensus estimates.

Is now the time to buy NATR? Find out in our full research report (it’s free for active Edge members).

StockStory’s Take

Nature’s Sunshine delivered a positive third quarter, with the market responding favorably to the company's strong operational execution and meaningful revenue gains. Management attributed the quarter’s growth to strategic investments in digital capabilities, robust performance across North America, Asia Pacific, and Europe, and improved customer engagement. CFO Shane Jones highlighted a surge in new digital customers and significant progress in the subscription auto ship program as key contributors, noting, “the number of new digital customers making a purchase in Q3 more than doubled versus prior year.”

Looking ahead, management’s updated outlook reflects growing confidence in the company’s transformation initiatives and continued expansion of its digital and direct-to-consumer channels. CEO Kenneth Romanzi, newly appointed, emphasized a focus on leveraging the company’s broad direct sales network and advancing digital engagement to maintain momentum. Jones cautioned that while Asia Pacific growth may be flat in the next quarter due to tough comparisons, the company expects continued mid-single-digit growth across regions as product innovation, digital marketing, and subscription programs remain central to the strategy.

Key Insights from Management’s Remarks

Management credited the quarter’s performance to execution of its digital transformation strategy, strong field activation in Asia Pacific, and effective cost control measures.

• Digital channel momentum: The North America digital business posted 52% year-over-year growth, driven by new digital tools, platform improvements, and optimized digital marketing. Management noted that TikTok and Amazon were particularly effective in customer acquisition this quarter.
• Subscription auto ship growth: The auto ship program now represents more than half of direct-to-consumer (DTC) ordering accounts in North America, and its recent launch in China already accounts for 12% of sales. This model supports recurring revenue and boosts customer retention.
• Asia Pacific field activation: Exceptional sales execution and field activation in Japan, China, and Korea fueled double-digit growth in the region. Management indicated that some sales were accelerated into Q3 from Q4 due to timing of field initiatives.
• Margin expansion initiatives: Gross margin rose 200 basis points to 73.3%, the highest in nearly four years, reflecting renegotiated logistics contracts, improved manufacturing efficiency, and disciplined pricing. Management expects gross margins to remain in the upper 72% range, despite a small anticipated impact from tariffs.
• Regional product launches and expansion: The company’s introduction of more consumer-friendly product bundles and targeted launches of the Power Line product in Central and Eastern Europe supported sales growth and expanded the customer base in new markets.

Drivers of Future Performance

Nature’s Sunshine projects continued growth through further digital transformation, expanded subscription models, and disciplined cost management, while acknowledging regional variability and external headwinds.

• Sustained digital investment: The company intends to continue investing in digital advertising and customer acquisition as long as returns remain favorable, supporting ongoing growth in new and repeat customers through channels like social commerce and Amazon.
• Subscription model scaling: Management views further expansion of the auto ship program as a critical driver for recurring revenue and customer retention, with efforts underway to increase subscription adoption in all major regions.
• Geographic and macro risks: While North America and Europe are expected to maintain mid-single-digit growth, Asia Pacific faces a challenging comparison next quarter due to accelerated sales and macro uncertainty, which could result in flat or slightly down performance before returning to growth.

Catalysts in Upcoming Quarters

Over the next few quarters, the StockStory team will be closely monitoring (1) the pace of digital channel and subscription auto ship adoption, (2) the effectiveness of targeted product launches and field activations in driving regional growth, and (3) the ability to maintain margin improvements amid tariffs and fluctuating SG&A. Execution on these fronts will be key to sustaining momentum and managing variability in Asia Pacific and other regions.

Nature's Sunshine currently trades at $14.58, up from $13.73 just before the earnings. Is the company at an inflection point that warrants a buy or sell? Find out in our full research report (it’s free for active Edge members).

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