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’s Ryan Napierski Named President of Global Sales and Operations

Nu Skin Enterprises Inc. has named veteran talent Ryan Napierski as President of Global Sales and Operations, following the departure of Dan Chard.

In more than 20 years at Nu Skin, Napierski has held a number of roles across the company’s global operations. He spent the past eight years in Asia, where he most recently served as President of both Nu Skin Japan and Nu Skin North Asia. In 2014, North Asia accounted for 30 percent, or $783.0 million, of Nu Skin’s $2.57 billion revenue.

Napierski’s earlier roles within the company included Vice President of Global Business Development, overseeing Nu Skin’s global compensation plan; General Manager for the United Kingdom; and Vice President of European Business Development.

“With every promotion or new assignment over the years, Ryan has proven himself an able leader and has met each new challenge with excellence,” Truman Hunt, President and CEO, said in a statement. “I have every confidence that Ryan has the right experience and expertise to lead Nu Skin’s global sales organization.”

“While we are pleased to welcome Ryan back to our U.S. headquarters, I want to acknowledge Dan’s significant contributions to our company,” Hunt added. “On behalf of everyone at Nu Skin, we thank Dan for his years of service and wish him all the best for the future.”

Utah Force for Good Day Honors Nu Skin Humanitarian Efforts

Photo: Volunteers take part in Nu Skin’s 11th Annual Force for Good Day.


Former DSA Chairman Truman Hunt, President and CEO of Nu Skin, has passed the gavel to Chairman David Holl, CEO of Mary Kay, but Hunt’s work to advance the industry as a force for good continues at Nu Skin’s Utah headquarters, where the Governor’s Office has declared today Utah Force for Good Day.

The statewide observance is a nod to Nu Skin’s Force for Good Day, now in its twelfth year. The company’s employees and distributors celebrate the day by participating in service projects that benefit children.

“Nu Skin’s annual Force for Good Day celebration has become a tradition where our global employees and sales leaders devote their time and resources to helping children in their local communities,” Hunt said in a statement. “It celebrates the company’s mission and efforts of the Nu Skin family to be a force for good not just on this one day but all year long.”

Local participants are supporting the work of the Nu Skin Force for Good Foundation by assembling 10,000 kids’ care bags and making 200 fleece quilts for children confined to a hospital stay. Globally, projects include donating and distributing education kits, serving children in orphanages, and sponsoring clothing drives.

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.

Nu Skin to Launch Essential Oils Line

Nutrition and skincare company Nu Skin Enterprises Inc. has announced plans to introduce a new line of essential oils in its U.S., Canada and Latin America markets next month. The Utah-based brand will launch Epoch Essential Oils through a sales promotion available to qualifying distributors on Thursday, April 9.

The initial Epoch offering will consist of three single oils and five oil blends, which the company plans to introduce as a package, along with a diffuser, a mini diffuser and topical blending oil. Nu Skin says it will begin selling individual products in July and, later in 2015, introduce the line in China and Europe.

Essential oils, used topically or aromatically, are gaining popularity as natural alternatives to pharmaceutical drugs and antibiotics. In the past five years essential oil manufacturing in the U.S. has grown 3.5 percent annually to $1 billion in revenue, according to a report by IBISWorld. Nu Skin CEO Truman Hunt said the brand is looking to differentiate itself from competitors by “applying Nu Skin scientific rigor” to the category.

“Indigenous cultures have long known the value of botanical substances and have used them for their healthful benefits,” Chief Scientific Officer Joseph Chang, Ph.D., said in the company’s release. “Nu Skin has partnered with one of the world’s leading ethnobotanists to bring this knowledge to our modern lifestyle.”

Epoch product sales will contribute to improving the lives of children through the Nu Skin Force for Good Foundation, which supports humanitarian projects in more than 50 countries. The company has pledged to donate 25 cents from each sale to the foundation’s efforts to alleviate disease, illiteracy, and poverty.

Financial Results a Mixed Bag for Nu Skin

Nu Skin’s (NUS—NYSE) regulatory review earlier this year in Greater China has had a significant impact on the company’s 2014 fourth-quarter and year-end results that posted Thursday. In response to the revenue drop in the company’s largest market to $213 million in Q4 from $482 million in the prior-year period, Nu Skin’s overall profit fell almost 63 percent for the quarter to $46.5 million, or 77 cents per share.

Despite the year-long decline in the region, according to President and CEO Truman Hunt, revenue began to stabilize there earlier in the year and has continued. Results were also negatively impacted by the strengthening of the U.S. dollar bringing revenue down by more than $100 million in 2014, and by $24 million consecutively from the third to the fourth quarter.

“Our business performed as we expected for the quarter, and we look forward to a solid 2015,” said Hunt. “…Despite the 2014 revenue decline, our three-year compounded annual revenue growth rate was 14 percent, reflecting longer-term business improvement.”

Total revenue for the quarter was $609.6 million, at the high end of the company’s guidance, compared to $1.06 billion in the prior-year period, but Hunt references the $550 million TR90 launch, the company’s largest product introduction, in the second half of 2013 for the uneven year-over-year comparison.

Nu Skin reported profit of $189.2 million, or $3.11 per share, for the year with revenue of $2.57 billion, compared to $3.18 billion the previous year.

The company’s outlook includes revenue in the range of $530 million to $550 million for the quarter, and full-year earnings of $3.80 to $4.00 per share, with revenue ranging from $2.5 billion to $2.56 billion.

The company announced an increase of its the quarterly cash dividend to 35 cents from the previous dividend of 34.5 cents per share, payable on March 18, 2015.

90 Days of Direct Selling – Day 62

DSN_90Days_Email_Signature

Nu Skin Enterprises Inc.

2013 Net Sales: $3.18 billion

Country: USA

Nu Skin demonstrates its tradition of innovation through its comprehensive anti-aging product portfolio, independent business opportunity and corporate social responsibility initiatives. The company’s scientific leadership in both skin care and nutrition has established it as a premier anti-aging company. The company’s anti-aging portfolio features the new ageLOC® line of products including the ageLOC® TR90™ weight management and body shaping system, ageLOC® R2 nutritional supplement and ageLOC® Transformation daily skin care system.

 

2012 Rank: 8
2012 Net Sales: $2.2 billion
Sales Method: Person-to-person
Compensation Structure: Multi-level
Products: Cosmetics, personal care, wellness
Markets: 53
Salespeople: 1.3 million
Employees: 1,200
Headquarters: Provo, Utah
Executive: Truman Hunt
Year Founded: 1984
Stock Symbol: NUS—NYSE
Website: www.nuskin.com

World Congress CEO Panel Discusses Future of Direct Selling

A powerhouse panel of direct selling company CEOs spent nearly two hours on stage as part of the World Federation of Direct Selling Associations 2014 World Congress in Rio de Janeiro, Brazil.

Mary Kay Inc. CEO David Holl, Amway President Doug DeVos, Oriflame Cosmetics CEO and President Magnus Brannstrom, Herbalife International CEO Michael O. Johnson, Avon Products Inc. CEO Sheri McCoy and Nu Skin Enterprises CEO Truman Hunt participated in a conversation moderated by WFDSA Chairman Alessandro Carlucci. Their topic of discussion: “The Future of Direct Selling in an Increasingly Connected and Borderless World.”

Their message: Each company must choose the right technology, at the right price and right time, and then provide the right training in order to maximize the return. At the same time, it is important to remember that direct selling, at its core, is not about technology at all. It is about one person sharing a product or opportunity with another.

“One of the things that I have championed and people who have come before me, I think, have championed as well is to keep this business simple,” Holl said. “You can come up with a lot of technology. In my opinion if you let the IT department lead you down that path, it will be great technology but the sales force might not use it because it is overwhelming.”

DeVos echoed that advice to keep things simple, recounting Amway’s experience with its launch of the Internet-focused company Quixtar. “We got ourselves …” Read the rest of the story at Direct Selling News.

Read more coverage of the 2014 WFDSA World Congress.

More Public Companies Report Q3 2014 Results

The following is a round-up of the latest publicly held companies to announce third quarter results:

At Nu Skin (NUS—NYSE), third quarter revenue was $638.8 million, down 30 percent over the prior-year period. The revenue dip partially reflects a limited-time introduction of Nu Skin’s ageLOC® TR90® weight management system in Q3 2013. The personal-care company reported earnings of $1.12 per share, ahead of Nu Skin’s 90 cents to 95 cents guidance for the quarter. The company expects fourth quarter revenue of $590 million to $610 million, with earnings per share of 72 cents to 77 cents.

“Our sales results are heavily impacted by our product launch schedule. Last year’s second-half launch, which generated approximately $550 million in sales, provides a difficult year-over-year comparison,” Nu Skin President and CEO Truman Hunt shared in the company’s report. “However, excluding product launch sales, the core business has stabilized and is trending positively sequentially.”

Primerica Inc. (PRI—NYSE) reported third quarter revenue of $339.2 million, up 9 percent year over year. Net income was down 3.7 percent to $41.6 million, or 75 cents per diluted share, impacted by accelerated equity compensation expenses related to retirement plan modifications and higher claims incurred in the quarter. The financial services provider lagged 8.43 percent behind the Zacks Consensus Estimate, but investors reacted positively to Primerica’s results. The company’s stock price gained 0.38 percent on the news to close Wednesday at $52.16.

Nature’s Sunshine Products Inc. (NATR—NASDAQ) reported increased revenue for the third quarter on Wednesday, with $94.9 million, up 2.6 percent from $92.5 million in the third quarter of 2013. Results showed lower earnings though, with 6 cents per diluted common share or net income of $1 million, compared to 29 cents, or $4.9 million in the third quarter of 2013. It was the fifth consecutive quarter of record sales for the health and wellness company’s Synergy WorldWide business, driven by South Korea, Japan and a return to growth in Europe.

“Sales in NSP North America have begun to improve with NSP United States and NSP Canada posting net sales growth for the first time since the second quarter of 2013 and the first quarter of 2012, respectively,” said Chairman and CEO Gregory L. Probert. “We remain cautiously optimistic about the future of this core market as our new products and sales programs continue to gain traction.”

Medifast Inc. (MED—NYSE) third quarter results came in ahead of expectations on Wednesday with net income of $4.9 million, or 39 cents per share. Excluding non-recurring costs, adjusted earnings came to 47 cents per share, or $5.9 million net income. The weight-loss company posted net revenue of $74 million. This was a decrease of 14 percent from net revenue of $86.5 million in the third quarter of 2013. Revenue in the direct sales channel, Take Shape For Life, decreased 11 percent to $49.9 million in the third quarter of 2014, compared to $56.2 million in the same period last year.

Guidance for Q4 revenue and EPS is below consensus, with net revenue to be in the range of approximately $69 million to $73 million and EPS in the range of 31 cents to 34 cents. For fiscal year 2014, the company now expects revenue to be in the range of $310 million to $314 million and EPS in the range of $1.59 to $1.62. As trading closed on Wednesday, shares hit $30.09, an increase of 23 percent in the last 12 months.