Nu Skin Reports Lower Annual Sales, Provides Soft Outlook

In the fourth quarter, a series of new product launches was not enough to counter the effects of a stronger dollar and lackluster sales at Nu Skin Enterprises Inc. (NUS—NYSE).

The maker of anti-aging products and nutritional supplements reported fourth-quarter revenue of $572.2 million, cut 7 percent by currency fluctuations. Though up on a sequential basis, sales fell 6 percent year over year. Earnings were down 20 percent to 62 cents a share. Analysts had expected a better performance on both counts.

The company ran three of its signature limited-time offers in the quarter, featuring its anti-aging ageLOC Youth and ageLOC Me products. In the Americas and Japan, the results were positive, while a new promotion in South Korea fell flat, largely due to a 12-month product subscription commitment bundled into the offer.

On a regional basis quarterly results were mixed. Constant-dollar revenue improved 26 percent in the Americas. Besides breakeven results in North Asia, sales in all other regions were down from the prior year. In the company’s largest segment, Greater China, revenue dipped 5 percent on a constant-dollar basis.

For the full year, revenue totaled $2.25 billion, compared to $2.57 billion a year ago. Earnings fell 28 percent to $2.25 per share. The company continued its share buyback program, repurchasing more than 5 percent of outstanding shares in 2015.

“We enter 2016 with a calendar filled with significant product launches,” said President and CEO Truman Hunt. “In the Americas, Japan and South Asia, where we have executed well, these product launches have generated positive results. In South Korea and China, we are moderating our expectations based on the December launch of ageLOC Me in South Korea and economic uncertainty in China.”

In 2016, the company expects revenue in the range of $2.10 billion to $2.15 billion. Management said its operating margin for the year likely will be 10.5 percent to 11.0 percent, with earnings of $2.40 to $2.60 per share, coming in well below analysts’ forecasts of $3.09 per share.

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Nu Skin Stock Falls as China Troubles Weaken Sales Forecast

Shares of Nu Skin Enterprises hit their lowest price in more than a year on Wednesday after the company slashed its revenue guidance due to foreign-currency issues and lackluster sales in its China region.

In a statement released ahead of Nu Skin’s 2015 Global Convention, management stated that third-quarter revenue will amount to roughly $573 million. The seller of skincare and nutrition products previously projected sales of as much as $620 million. Analysts had set more optimistic predictions, with an average estimate of $622.6 million. One contributor to the downgrade was the strengthening of the U.S. dollar, which created a foreign currency headwind and negatively impacted revenue by more than $60 million compared to the previous year.

After climbing 6.6 percent this year, Nu Skin stock fell as much as 26.9 percent on Wednesday before closing the day down 25.7 percent at $34.62. The company’s expected third-quarter results would represent a year-over-year decrease of approximately 10 percent. For the last quarter, Nu Skin reported revenue of $560 million.

The shortfall also stems from weak sales in China, which accounts for 32 percent of Nu Skin’s total revenue. Lower-than-expected sales of the brand’s new cosmetic oils were a major factor, and may reflect economic conditions in the wider Chinese market, Nu Skin CEO Truman Hunt said in a statement.

“Given the successful launch of ageLOC Youth in South Asia/Pacific, we look forward to the introduction of ageLOC Youth as well as ageLOC Me in most of our regions during the fourth quarter,” said Hunt. “We forecast year-over-year constant-currency revenue growth of between 7 and 10 percent in the fourth quarter.”

In September, Nu Skin promoted one of its Asia executives, Ryan Napierski, to lead the company’s global sales organization. Napierski spent the past eight years in the region, most recently serving as President of both Nu Skin Japan and Nu Skin North Asia. Before transferring to Asia, Napierski helped to advance the brand in Europe as Vice President of European Business Development.

Nu Skin will release its earnings results for the third quarter on Nov. 5.

Nu Skin Looks to China, New Products to Boost Earnings

Photo: Nu Skin’s corporate headquarters in Provo, Utah.


Despite weak first-quarter earnings, Nu Skin Enterprises Inc. is confident that its expanding China business and forthcoming product launches will pay off in the second half of 2015.

Quarterly revenue landed in the middle of the company’s guidance at $543.3 million, a 20 percent drop from $671.1 million a year ago. Excluding one-time costs, earnings were 72 cents a share. Analysts had estimated that earnings would reach 73 cents a share on revenue of $546.87 million.

Nu Skin’s active associate numbers continued to decline in all regions except South Asia/Pacific, where active associates increased 4.3 percent from the prior-year period. Greater China recorded the sharpest decline, down 23 percent from the first three quarters of 2014.

In its earnings call, Nu Skin disclosed that the Securities and Exchange Commission has opened a non-public investigation into a donation the company made in China in 2013. Executives said Nu Skin is cooperating with the investigation, but provided no further details.

President and CEO Truman Hunt said Nu Skin is working to expand its footprint in China despite regulatory challenges, including a review early last year that prompted Nu Skin to halt recruiting and resulted in fines for the company. Hunt noted Chinese officials have granted Nu Skin approval to operate its direct selling business in two new cities in Guangdong province.

The anti-aging brand is counting on new ageLOC offerings to drive constant-currency revenue growth in 2015. “Enthusiasm is building for our upcoming product launches that include ageLOC Youth, our most advanced anti-aging supplement, as well as ageLOC Me, an innovative anti-aging skincare system that enables consumers to personalize a daily regimen based on individual preferences and skincare needs,” said Hunt.

In July, the company will also roll out its Epoch essential oils line across the U.S. and Canada, where Nu Skin introduced the products in April through a limited offering. It will also introduce a sister line, ageLOC Essentials, to its Chinese customers.

Nu Skin reduced its revenue guidance for the full year by about 2 percent and said it expects earnings between $3.65 and $3.75 a share, compared to the $3.94 consensus from analysts.