Full Press Release Details
Nu Skin Enterprises Reports First Quarter Financial Results
PROVO, Utah - May 4, 2022 - Nu Skin Enterprises, Inc. (NYSE: NUS) today announced
first quarter 2022 results.
Q1 2022 vs. Prior-year Quarter
| Revenue: | $604.9 million; (11)% (3)% FX impact or $(17.2) million | ||
| Earnings Per Share (EPS): | $0.76; (16)% | ||
| Customers: | 1,321,451; (13)% | ||
| Paid Affiliates: | 251,436; (14)% | ||
| Sales Leaders: | 52,462; (22)% |
"Despite heightened global uncertainty and COVID-related obstacles, we are pleased with our first quarter results, which exceeded guidance," said Ryan Napierski, Nu Skin
president and CEO. "Demand remained strong for our most recent product introductions, ageLOC Meta and Beauty Focus Collagen+, and the momentum from these product launches helped drive strong revenue growth in several markets including the U.S.,
Taiwan and Southeast Asia. Our business in Mainland China and several other markets was disrupted due to severe COVID-related lockdowns and other factors, and the conflict in Ukraine and Russia negatively impacted business throughout the EMEA region.
"As we look ahead to the remainder of the year, we are focused on the strategic imperatives that underpin Nu Vision 2025, including: EmpowerMe, our personalized beauty and
wellness strategy with connected beauty device introductions beginning in the third quarter; expansion of our affiliate-powered social commerce business model; and the continued enhancement of our digital platform. While we anticipate near-term
headwinds given the dynamic macro environment, we remain confident in the significant growth potential of our business, achieving our vision for the future and driving value for our shareholders."
Q1 2022 Year-over-year Operating Results
| Revenue: | $604.9 million compared to $677.0 million (3)% FX impact | ||
| Gross Margin: | 73.3% compared to 74.8% Impacted by product mix and promotions Nu Skin business was 76.5% compared to 77.8% | ||
| Selling Expenses: | 40.1% compared to 40.8% Nu Skin business was 43.0% compared to 43.7% | ||
| G&A Expenses: | 24.6% compared to 24.8% | ||
| Operating Margin: | 8.6% compared to 9.3% | ||
| Other Income / (Expense): | $(1.5) million compared to $1.6 million | ||
| Income Tax Rate: | 23.6% compared to 26.5% | ||
| EPS: | $0.76 compared to $0.91 |
| Dividend Payments: | $19.3 million | ||
| Stock Repurchases: | $10.0 million $235.4 million remaining in authorization |
Q2 and Full-year 2022 Outlook
| Q2 2022 Revenue: | $590 to $620 million; (16) to (12)% Approximately (3) to (4)% FX impact | ||
| Q2 2022 EPS: | $0.75 to $0.85; (35) to (26)% | ||
| 2022 Revenue: | $2.51 to $2.62 billion; (7) to (3)% Approximately (3) to (4)% FX impact | ||
| 2022 EPS: | $3.60 to $3.90; 26 to 36% on a reported basis, or (13) to (6)% non-GAAP |
"Our results outperformed expectations in the first quarter including a beat in revenue and earnings per share driven in
part by sales late in the quarter ahead of an April 1 price increase," added Mark Lawrence, chief financial officer. "In light of the ongoing global uncertainties, including increasing COVID-related factors, foreign exchange pressure and
geopolitical conflict, we are adjusting our annual guidance. Our 2022 revenue guidance is $2.51 to $2.62 billion with a 3 to 4 percent foreign currency headwind and EPS of $3.60 to $3.90. We are projecting second quarter revenue of $590 to $620
million with a 3 to 4 percent foreign currency headwind and EPS of $0.75 to $0.85."
The Nu Skin Enterprises management team will host a conference call with the investment community today at 5 p.m. (ET). Those wishing to access the
webcast, as well as the financial information presented during the call, can visit the Investor Relations page on the company's website at ir.nuskin.com. A replay of the webcast will be available on the same page through May 18, 2022.
About Nu Skin Enterprises, Inc.
Nu Skin Enterprises, Inc. (NYSE: NUS) is a leading beauty and wellness company, powered by a dynamic affiliate opportunity platform. The company helps
people look, feel and live their best with products that combine the best of science, technology and nature. Backed by more than 35 years of scientific research, Nu Skin develops innovative products including Nu Skin personal care, Pharmanex
nutrition and the ageLOC anti-aging brand which includes an award-winning line of beauty device systems. Nu Skin operates in approximately 50 markets worldwide in the Americas, Asia, Europe, Africa and the Pacific. Rhyz Inc. is the company's
strategic investment arm that includes a collection of technology and manufacturing companies to support growth in the core Nu Skin business. Nu Skin is committed to sustainability, including global initiatives such as transitioning to reduced and
sustainable packaging for all products by 2030. The Nu Skin Force for Good Foundation also strives to improve children's health, education and economic circumstances throughout the world. For more information, visit nuskin.com.
Important Information Regarding Forward-Looking Statements:
This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, that represent the company's current expectations
and beliefs. All statements other than statements of historical fact are "forward-looking statements" for purposes of federal and state securities laws and include, but are not limited to, statements of management's expectations regarding the
company's performance, growth, shareholder value, strategies, vision, transformation, initiatives, product pipeline and product introductions, digital and social-commerce tools and initiatives, customers, sales leaders and affiliates; operational
improvements, projections regarding revenue, expenses, operating income, earnings per share, foreign currency fluctuations, uses of cash and other financial items; statements of belief; and statements of assumptions underlying any of the foregoing.
In some cases, you can identify these statements by forward-looking words such as "believe," "expect," "anticipate," "project," "outlook," "guidance," "remain," "become," "plan," "opportunity," "expand," "will," "would," "could," "may," "might," the
negative of these words and other similar words.
The forward-looking statements and related assumptions involve risks and uncertainties that could cause actual results and outcomes to differ
materially from any forward-looking statements or views expressed herein. These risks and uncertainties include, but are not limited to, the following:
The company's financial performance and the forward-looking statements contained herein are further qualified by a detailed discussion of
associated risks set forth in the documents filed by the company with the Securities and Exchange Commission. The forward-looking statements set forth the company's beliefs as of the date that such information was first provided, and the company
assumes no duty to update the forward-looking statements contained in this release to reflect any change except as required by law.
Non-GAAP Financial Measures: Constant-currency revenue
change is a non-GAAP financial measure that removes the impact of fluctuations in foreign-currency exchange rates, thereby facilitating period-to-period comparisons of the company's performance. It is calculated by translating the current period's
revenue at the same average exchange rates in effect during the applicable prior-year period and then comparing that amount to the prior-year period's revenue. The company believes that constant-currency revenue change is useful to investors,
lenders and analysts because such information enables them to gauge the impact of foreign-currency fluctuations on the company's revenue from period to period.
Earnings per share and adjusted earnings per share growth, each excluding impairment and restructuring charges, also are non-GAAP financial
measures. Impairment and restructuring charges are not part of the ongoing operations of our underlying business. The company believes that these non-GAAP financial measures are useful to investors, lenders and analysts because removing the impact
of impairment and restructuring charges facilitates period-to-period comparisons of the company's performance. Please see the reconciliations of these items to our earnings per share and earnings per share growth calculated under GAAP, below.
The following table sets forth revenue for the three-month periods ended March 31, 2022 and 2021 for each of our reportable segments (U.S. dollars in thousands):
| Three Months Ended March 31, | Constant- Currency | |||||||||||||||
| 2022 | 2021 | Change | Change | |||||||||||||
| Nu Skin | ||||||||||||||||
| Mainland China | $ | 124,495 | $ | 149,593 | (17 | )% | (18 | )% | ||||||||
| Americas | 123,580 | 133,761 | (8 | )% | (6 | )% | ||||||||||
| Southeast Asia/Pacific | 90,236 | 83,289 | 8 | % | 11 | % | ||||||||||
| South Korea | 72,133 | 81,131 | (11 | )% | (4 | )% | ||||||||||
| Japan | 61,791 | 69,864 | (12 | )% | (3 | )% | ||||||||||
| EMEA | 52,968 | 76,180 | (30 | )% | (25 | )% | ||||||||||
| Hong Kong/Taiwan | 38,494 | 36,345 | 6 | % | 6 | % | ||||||||||
| Other | 620 | 878 | (29 | )% | (29 | )% | ||||||||||
| Total Nu Skin | 564,317 | 631,041 | (11 | )% | (8 | )% | ||||||||||
| Rhyz Investments | ||||||||||||||||
| Manufacturing | 40,341 | 45,985 | (12 | )% | (12 | )% | ||||||||||
| Rhyz other | 241 | - | ||||||||||||||
| Total Rhyz Investments | 40,582 | 45,985 | (12 | )% | (12 | )% | ||||||||||
| Total | $ | 604,899 | $ | 677,026 | (11 | )% | (8 | )% |
The following table provides information concerning the number of Customers, Paid Affiliates and Sales Leaders in our core Nu Skin business for the three-month periods
ended March 31, 2022 and 2021:
| Three Months Ended March 31, | ||||||||||||
| Customers | 2022 | 2021 | Change | |||||||||
| Mainland China | $ | 289,060 | 316,000 | (9 | )% | |||||||
| Americas | 318,458 | 374,867 | (15 | )% | ||||||||
| Southeast Asia/Pacific | 165,657 | 185,435 | (11 | )% | ||||||||
| South Korea | 140,648 | 152,390 | (8 | )% | ||||||||
| Japan | 122,616 | 126,525 | (3 | )% | ||||||||
| EMEA | 216,037 | 296,001 | (27 | )% | ||||||||
| Hong Kong/Taiwan | 68,975 | 66,042 | 4 | % | ||||||||
| Total | 1,321,451 | 1,517,260 | (13 | )% |
| Three Months Ended March 31, | ||||||||||||
| Paid Affiliates | 2022 | 2021 | Change | |||||||||
| Mainland China | $ | 22,762 | 41,944 | (46 | )% | |||||||
| Americas | 46,281 | 52,767 | (12 | )% | ||||||||
| Southeast Asia/Pacific | 43,262 | 45,871 | (6 | )% | ||||||||
| South Korea | 49,328 | 51,006 | (3 | )% | ||||||||
| Japan | 38,059 | 38,283 | (1 | )% | ||||||||
| EMEA | 33,834 | 43,696 | (23 | )% | ||||||||
| Hong Kong/Taiwan | 17,910 | 17,885 | - | |||||||||
| Total | 251,436 | 291,452 | (14 | )% |
| Three Months Ended March 31, | ||||||||||||
| Sales Leaders | 2022 | 2021 | Change | |||||||||
| Mainland China | $ | 14,146 | 23,013 | (39 | )% | |||||||
| Americas | 9,547 | 11,394 | (16 | )% | ||||||||
| Southeast Asia/Pacific | 8,012 | 8,446 | (5 | )% | ||||||||
| South Korea | 6,072 | 6,682 | (9 | )% | ||||||||
| Japan | 5,977 | 6,135 | (3 | )% | ||||||||
| EMEA | 5,455 | 7,479 | (27 | )% | ||||||||
| Hong Kong/Taiwan | 3,253 | 3,755 | (13 | )% | ||||||||
| Total | 52,462 | 66,904 | (22 | )% |
"Customers" are persons who have purchased directly from the Company during
the three months ended as of the date indicated. Our Customer numbers include members of our sales force who made such a purchase, including Paid Affiliates and those who qualify as Sales Leaders, but they do not include consumers who purchase
products directly from members of our sales force.
"Paid Affiliates" are any Brand Affiliates, as well as sales employees and
independent marketers in Mainland China, who earned sales compensation during the three-month period. In all of our markets besides Mainland China, we refer to members of our independent sales force as "Brand Affiliates" because their primary
role is to promote our brand and products through their personal social networks.
"Sales Leaders" are the three-month average of our monthly Brand Affiliates,
as well as sales employees and independent marketers in Mainland China, who had achieved certain qualification requirements as of the end of each month of the quarter.
NU SKIN ENTERPRISES, INC.
Consolidated Statements of Income (Unaudited)
(U.S. dollars in thousands, except per share amounts)
| Three Months Ended March 31, | ||||||||
| 2022 | 2021 | |||||||
| Revenue | $ | 604,899 | $ | 677,026 | ||||
| Cost of sales | 161,499 | 170,566 | ||||||
| Gross profit | 443,400 | 506,460 | ||||||
| Operating expenses: | ||||||||
| Selling expenses | 242,699 | 275,965 | ||||||
| General and administrative expenses | 148,556 | 167,582 | ||||||
| Total operating expenses | 391,255 | 443,547 | ||||||
| Operating income | 52,145 | 62,913 | ||||||
| Other income (expense), net | (1,453 | ) | 1,582 | |||||
| Income before provision for income taxes | 50,692 | 64,495 | ||||||
| Provision for income taxes | 11,976 | 17,065 | ||||||
| Net income | $ | 38,716 | $ | 47,430 | ||||
| Net income per share: | ||||||||
| Basic | $ | 0.77 | $ | 0.94 | ||||
| Diluted | $ | 0.76 | $ | 0.91 | ||||
| Weighted-average common shares outstanding (000s): | ||||||||
| Basic | 49,991 | 50,706 | ||||||
| Diluted | 51,066 | 52,172 |
NU SKIN ENTERPRISES, INC.
Consolidated Balance Sheets (Unaudited)
(U.S. dollars in thousands)
| March 31, 2022 | December 31, 2021 | |||||||
| ASSETS | ||||||||
| Current assets: | ||||||||
| Cash and cash equivalents | $ | 302,216 | $ | 339,593 | ||||
| Current investments | 15,313 | 15,221 | ||||||
| Accounts receivable, net | 52,171 | 41,299 | ||||||
| Inventories, net | 381,585 | 399,931 | ||||||
| Prepaid expenses and other | 97,923 | 76,906 | ||||||
| Total current assets | 849,208 | 872,950 | ||||||
| Property and equipment, net | 448,822 | 453,674 | ||||||
| Operating lease right-of-use assets | 132,949 | 120,973 | ||||||
| Goodwill | 206,432 | 206,432 | ||||||
| Other intangible assets, net | 74,874 | 76,991 | ||||||
| Other assets | 179,964 | 175,460 | ||||||
| Total assets | $ | 1,892,249 | $ | 1,906,480 | ||||
| LIABILITIES AND STOCKHOLDERS' EQUITY | ||||||||
| Current liabilities: | ||||||||
| Accounts payable | $ | 40,719 | $ | 49,993 | ||||
| Accrued expenses | 343,737 | 372,201 | ||||||
| Current portion of long-term debt | 110,000 | 107,500 | ||||||
| Total current liabilities | 494,456 | 529,694 | ||||||
| Operating lease liabilities | 100,844 | 88,759 | ||||||
| Long-term debt | 258,995 | 268,781 | ||||||
| Other liabilities | 103,754 | 106,474 | ||||||
| Total liabilities | 958,049 | 993,708 | ||||||
| Commitments and contingencies | ||||||||
| Stockholders' equity: | ||||||||
| Class A common stock - 500 million shares authorized, $0.001 par value, 90.6 million shares issued | 91 | 91 | ||||||
| Additional paid-in capital | 599,258 | 601,703 | ||||||
| Treasury stock, at cost - 40.4 million and 40.7 million shares | (1,526,778 | ) | (1,526,860 | ) | ||||
| Accumulated other comprehensive loss | (69,528 | ) | (73,896 | ) | ||||
| Retained earnings | 1,931,157 | 1,911,734 | ||||||
| Total stockholders' equity | 934,200 | 912,772 | ||||||
| Total liabilities and stockholders' equity | $ | 1,892,249 | $ | 1,906,480 |
NU SKIN ENTERPRISES, INC.
Reconciliation of Earnings Per Share Excluding Impact of Restructuring and Impairment to GAAP Earnings Per Share
(in thousands, except per share amounts)
| Year Ended 2021 | 2022 EPS Guidance - low end | 2022 Projected Annual Growth Rate - low end | 2022 EPS Guidance - high end | 2022 Projected Annual Growth Rate - high end | ||||||||||||||||
| Net income | $ | 147,266 | ||||||||||||||||||
| Impact of restructuring and impairment: | ||||||||||||||||||||
| Restructuring and impairment | 51,870 | |||||||||||||||||||
| Inventory write-off | 6,656 | |||||||||||||||||||
| Income tax impact | 6,933 | |||||||||||||||||||
| Adjusted net income | $ | 212,725 | ||||||||||||||||||
| Diluted earnings per share | $ | 2.86 | $ | 3.60 | 26 | % | $ | 3.90 | 36 | % | ||||||||||
| Diluted earnings per share, excluding restructuring and impairment impact | $ | 4.14 | $ | 3.60 | (13 | %) | $ | 3.90 | (6 | %) | ||||||||||
| Weighted-average common shares outstanding (000s): | 51,427 |
Media: media@nuskin.com, (801) 345-6397
Investors: investorrelations@nuskin.com, (801) 345-3577