Recent Updates
Recently added Catalysts
NUS Neutral Sentiment Score: 47/100

Nu Skin Enterprises Reports Fourth Quarter and 2022 Financial Results Company Provides Initial Outlook for Q1 and FY 2023

Key Takeaway: Nu Skin Enterprises reported its fourth quarter and full-year 2022 financial results, showing a decline in revenue and customer base due to macroeconomic challenges. Despite a 17% decrease in annual revenue, the company highlighted ongoing achievements in product development and digital integration. Looking ahead, Nu Skin provided an uncertain initial outlook for Q1 and full-year 2023, projecting potential revenue drops amidst foreign currency impacts. The management remains cautiously optimistic about their long-term strategy and upcoming product innovations.

Market Sentiment Analysis

POSITIVE FACTORS

  • The company achieved key milestones in 2022, including new product introductions.
  • Nu Skin reported annual revenue growth of 4% in the U.S. despite global challenges.
  • The management feels confident about their long-term strategy, Nu Vision 2025.

CONCERNS & RISKS

  • Overall revenue decreased by 17% year-over-year, indicating a decline in sales.
  • The customer base declined by 16%, reflecting challenges in retaining customers.
  • The company forecasts a potential revenue drop for Q1 2023 of 26% to 19%.

Full Press Release Details

Nu Skin Enterprises Reports Fourth Quarter and 2022 Financial Results
Company Provides Initial Outlook for Q1 and FY 2023
PROVO, Utah - Feb. 15, 2023 - Nu Skin Enterprises,
Inc. (NYSE: NUS) today announced fourth quarter and full year 2022 results.
Q4 2022 vs. Prior-year Quarter
Revenue: $522.3 million; (22)% (7)% FX impact or $(51) million
Earnings Per Share (EPS): $1.15 or $0.89 excluding restructuring and impairment charges associated with the company's strategic resource reallocation and a recent IRS - approved favorable tax method change, compared to $(0.18) or $1.11 excluding restructuring and impairment charges in Q4 2021
Customers: 1,147,124; (16)%
Paid Affiliates: 236,956; (13)%
Sales Leaders: 48,737; (21)%
Revenue: $2.23 billion; (17)% (5)% FX impact or $(150) million
Earnings Per Share (EPS): $2.07 or $2.90 excluding restructuring and impairment charges and a tax method change, compared to $2.86 or $4.14 excluding restructuring and impairment charges
"We made steady progress toward our Nu Vision 2025 strategy, despite persistent macro-economic challenges, which primarily included COVID-related disruptions in Mainland
China, global inflation and foreign currency headwinds," said Ryan Napierski, Nu Skin president and CEO. "We achieved several key milestones during 2022 including the introduction of our first connected device, ageLOC LumiSpa iO, further
strengthening our position as the world's leading beauty device system brand; the rollout of our Vera and Stela apps in all markets, which provide increased consumer and affiliate engagement; and steady advancements with our social commerce model.
While we saw our sales channel contract primarily due to macroeconomic factors, we drove annual revenue growth of 4 percent in the U.S. and 2 percent in Southeast Asia/Pacific. Japan and Hong Kong/Taiwan also grew in constant currency, while reported
revenue was down due to FX headwinds.
"Looking ahead, while the macro-environment remains uncertain, we expect it to steadily improve throughout the year. We remain confident in our Nu Vision 2025 strategy to
help drive long-term growth and increase shareholder value, which we will update on our earnings call today. During the year, we will be advancing our EmpowerMe personalized beauty and wellness strategy by introducing our body iO smart, connected
device system and rolling out our TRMe weight management line. We will also continue to enhance our Vera and Stela apps with additional capabilities, features and improvements to streamline the overall user experience. In addition, as we continue to
expand our affiliate-powered social commerce model, we will focus on stabilizing performance in more challenged regions and leveraging best practices from our markets that are further along in their social commerce transition. Lastly, as we navigate
the year ahead, we will continue to be conservative in our guidance and prudent in our cost management while we invest in our future."
Q4 2022 Year-over-year Operating Results
Revenue: $522.3 million compared to $673.4 million (7)% FX impact or $(51) million
Gross Margin: 71.7% compared to 74.2% or 75.2% excluding restructuring and impairment charges in Q4 2021 Impacted by geographic footprint, foreign currency and global inflationary pressures Nu Skin business was 74.9% compared to 77.9%
Selling Expenses: 38.5% compared to 39.1% Nu Skin business was 40.5% compared to 41.4%
G&A Expenses: 24.4% compared to 24.4%
Operating Margin: 5.3% or 8.8% excluding restructuring and impairment charges, compared to 3.0% or 11.7% excluding restructuring and impairment charges
Other Income / (Expense): $(3.1) million compared to $(1.9) million
Income Tax Rate: (134.9)% or (3.7)% excluding restructuring and impairment charges and a recent IRS-approved favorable tax method change, compared to 150.1% or 26.9% excluding restructuring and impairment charges
EPS: $1.15 or $0.89 excluding restructuring and impairment charges and a tax method change, compared to $(0.18) or $1.11 excluding restructuring and impairment charges
Dividend Payments: $19.0 million
Stock Repurchases: $10.0 million $175.4 million remaining in authorization
Q1 and Full-year 2023 Outlook
Q1 2023 Revenue: $450 to $490 million; (26) to (19)% Approximately (6) to (5)% FX impact
Q1 2023 EPS: $0.17 to $0.27 or $0.25 to $0.35 non-GAAP
2023 Revenue: $2.03 to $2.18 billion; (9)% to (2)% Approximately (2) to (1)% FX impact
2023 EPS: $2.27 to $2.67 or $2.35 to $2.75 non-GAAP
"Our initial 2023 guidance assumes the global macro environment remains challenging in the near-term, improving throughout the year," said Mark
Lawrence, chief financial officer. "Our annual revenue guidance is $2.03 to $2.18 billion, with an approximate 1 to 2 percent foreign currency headwind. We anticipate reported EPS of $2.27 to $2.67 or $2.35 to $2.75 excluding charges associated
with a modest amount of 2023 restructuring. For the first quarter, we project revenue of $450 to $490 million, assuming a negative foreign currency impact of approximately 5 to 6 percent, with reported earnings per share of $0.17 to $0.27 or $0.25
to $0.35 when excluding an anticipated first-quarter restructuring and impairment charge of $5 to $10 million."
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 March 1, 2023.
About Nu Skin Enterprises, Inc.
Nu Skin Enterprises, Inc. (NYSE: NUS) is a global integrated 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 nearly 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 macro-environment and the company's performance, growth, shareholder value, financial position, strategies, vision, transformation, initiatives, product pipeline and product introductions, digital and social-commerce
tools and initiatives, customers, sales leaders, affiliates, and 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," "continue," "outlook," "guidance,"
"remain," "become," "plan," "potential," "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, gross margin, operating margin, and income tax rate, each excluding restructuring and impairment charges and/or tax method
changes, also are non-GAAP financial measures. Restructuring and impairment charges and tax method changes 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 restructuring and impairment charges and tax method changes facilitates period-to-period comparisons of the company's performance. Please see the reconciliations of these items to our
earnings per share and other income (expense) calculated under GAAP, below.
The following table sets forth revenue for the three-month periods ended December 31, 2022 and 2021 for each of our reportable segments (U.S. dollars in thousands):
Three Months Ended December 31, Constant- Currency
2022 2021 Change Change
Nu Skin
Americas $ 128,921 $ 144,000 (10) % (7) %
Mainland China 73,935 130,708 (43) % (37) %
Southeast Asia/Pacific 76,606 90,313 (15) % (8) %
South Korea 60,029 92,528 (35) % (26) %
Japan 53,877 63,215 (15) % 6 %
EMEA 55,337 68,066 (19) % (9) %
Hong Kong/Taiwan 39,789 47,816 (17) % (10) %
Nu Skin other 1,525 156 878 % 876 %
Total Nu Skin 490,019 636,802 (23) % (15) %
Rhyz Investments
Manufacturing 29,560 36,360 (19) % (19) %
Rhyz other 2,761 274 908 % 908 %
Total Rhyz Investments 32,321 36,634 (12) % (12) %
Total $ 522,340 $ 673,436 (22) % (15) %
The following table sets forth revenue for the years ended December 31, 2022 and 2021 for each of our reportable segments (U.S. dollars in thousands):
Year Ended December 31, Constant- Currency
2022 2021 Change Change
Nu Skin
Americas $ 508,537 $ 547,755 (7) % (5) %
Mainland China 360,389 568,774 (37) % (35) %
Southeast Asia/Pacific 344,411 336,651 2 % 7 %
South Korea 268,707 354,252 (24) % (15) %
Japan 224,896 266,216 (16) % -
EMEA 204,275 283,200 (28) % (19) %
Hong Kong/Taiwan 157,197 162,611 (3) % 1 %
Nu Skin other 3,959 3,653 8 % 8 %
Total Nu Skin 2,072,371 2,523,112 (18) % (12) %
Rhyz Investments
Manufacturing 149,458 172,120 (13) % (13) %
Rhyz other 3,830 437 776 % 776 %
Total Rhyz Investments 153,288 172,557 (11) % (11) %
Total $ 2,225,659 $ 2,695,669 (17) % (12) %
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 December 31, 2022 and 2021:
Three Months Ended December 31,
Customers 2022 2021 Change
Americas 299,287 336,564 (11) %
Mainland China 202,933 315,418 (36) %
Southeast Asia/Pacific 141,183 169,601 (17) %
South Korea 123,749 146,354 (15) %
Japan 119,152 122,813 (3) %
EMEA 197,917 210,414 (6) %
Hong Kong/Taiwan 62,903 66,395 (5) %
Total 1,147,124 1,367,559 (16) %
Three Months Ended December 31,
Paid Affiliates 2022 2021 Change
Americas 42,633 49,328 (14) %
Mainland China 23,436 30,546 (23) %
Southeast Asia/Pacific 38,653 44,050 (12) %
South Korea 45,058 52,036 (13) %
Japan 38,021 38,428 (1) %
EMEA 31,869 36,482 (13) %
Hong Kong/Taiwan 17,286 20,155 (14) %
Total 236,956 271,025 (13) %
Three Months Ended December 31,
Sales Leaders 2022 2021 Change
Americas 9,594 10,879 (12) %
Mainland China (1) 12,359 18,207 (32) %
Southeast Asia/Pacific 6,999 8,800 (20) %
South Korea 6,094 8,224 (26) %
Japan 5,936 5,864 1 %
EMEA 4,740 5,743 (17 )%
Hong Kong/Taiwan 3,015 3,666 (18) %
Total 48,737 61,383 (21) %
(1) The December 31, 2022 number reflects a modified Sales Leader definition, as described in our annual report on form 10-K.
NU SKIN ENTERPRISES, INC.
Consolidated Statements of Income (Unaudited)
(U.S. dollars in thousands, except per share amounts)
Three Months Ended December 31, Year Ended December 31,
2022 2021 2022 2021
Revenue $ 522,340 $ 673,436 $ 2,225,659 $ 2,695,669
Cost of sales 147,816 173,775 630,915 675,223
Gross profit 374,524 499,661 1,594,744 2,020,446
Operating expenses:
Selling expenses 201,031 263,265 879,634 1,080,153
General and administrative expenses 127,664 164,206 555,769 654,431
Restructuring and impairment expenses 18,370 51,870 48,494 51,870
Total operating expenses 347,065 479,341 1,483,897 1,786,454
Operating income (loss) 27,459 20,320 110,847 233,992
Other income (expense), net (3,104 ) (1,884 ) (21,877 ) (1,533 )
Income before provision for income taxes 24,355 18,436 88,970 232,459
Provision (benefit) for income taxes (32,860 ) 27,666 (15,808 ) 85,193
Net income (loss) $ 57,215 $ (9,230 ) $ 104,778 $ 147,266
Net income (loss) per share:
Basic $ 1.16 $ (0.19 ) $ 2.10 $ 2.93
Diluted $ 1.15 $ (0.18 ) $ 2.07 $ 2.86
Weighted-average common shares outstanding (000s):
Basic 49,452 49,862 50,002 50,193
Diluted 49,783 50,801 50,525 51,427
NU SKIN ENTERPRISES, INC.
Consolidated Balance Sheets (Unaudited)
(U.S. dollars in thousands)
December 31, 2022 December 31, 2021
ASSETS
Current assets:
Cash and cash equivalents $ 264,725 $ 339,593
Current investments 13,784 15,221
Accounts receivable, net 47,360 41,299
Inventories, net 346,183 399,931
Prepaid expenses and other 87,816 76,906
Total current assets 759,868 872,950
Property and equipment, net 444,806 453,674
Operating lease right-of-use assets 98,734 120,973
Goodwill 206,432 206,432
Other intangible assets, net 66,701 76,991
Other assets 244,429 175,460
Total assets $ 1,820,970 $ 1,906,480
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 53,963 $ 49,993
Accrued expenses 280,280 372,201
Current portion of long-term debt 25,000 107,500
Total current liabilities 359,243 529,694
Operating lease liabilities 76,540 88,759
Long-term debt 377,466 268,781
Other liabilities 110,425 106,474
Total liabilities 923,674 993,708
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 613,278 601,703
Treasury stock, at cost - 41.1 million and 40.7 million shares (1,569,061 ) (1,526,860 )
Accumulated other comprehensive loss (86,509 ) (73,896 )
Retained earnings 1,939,497 1,911,734
Total stockholders' equity 897,296 912,772
Total liabilities and stockholders' equity $ $1,820,970 $ 1,906,480
NU SKIN ENTERPRISES, INC.
Reconciliation of Gross Margin Excluding Impact of Restructuring and Impairment to GAAP Gross Margin
(in thousands, except for per share amounts)
Three months ended December 31, Year ended December 31,
2022 2021 2022 2021
Gross profit $ 374,524 $ 499,661 $ 1,594,744 $ 2,020,446
Impact of restructuring and impairment:
Inventory write-off - 6,656 26,905 6,656
Adjusted gross profit $ 374,524 $ 506,317 $ 1,621,649 $ 2,027,102
Gross margin 71.7 % 74.2 % 71.7 % 75.0 %
Gross margin, excluding restructuring impact 71.7 % 75.2 % 72.9 % 75.2 %
Revenue $ 522,340 $ 673,436 $ 2,225,659 $ 2,695,669
NU SKIN ENTERPRISES, INC.
Reconciliation of Operating Margin Excluding Impact of Restructuring and Impairment to GAAP Operating Margin
(in thousands, except for per share amounts)
Three months ended December 31, Year ended December 31,
2022 2021 2022 2021
Operating Income $ 27,459 $ 20,320 $ 110,847 $ 233,992
Impact of restructuring and impairment:
Restructuring and impairment 18,369 51,870 48,493 51,870
Inventory write-off - 6,656 26,905 6,656
Adjusted operating income $ 45,828 $ 78,846 $ 186,245 $ 292,518
Operating margin 5.3 % 3.0 % 5.0 % 8.7 %
Operating margin, excluding restructuring impact 8.8 % 11.7 % 8.4 % 10.9 %
Revenue $ 522,340 $ 673,436 $ 2,225,659 $ 2,695,669
NU SKIN ENTERPRISES, INC.
Reconciliation of Effective Tax Rate Excluding Impact of Restructuring to GAAP Effective Tax Rate
(in thousands, except for per share amounts)
Three months ended December 31, Year ended December 31,
2022 2021 2022 2021
Provision (benefit) for income taxes $ (32,860 ) $ 27,666 $ (15,808 ) $ 85,193
Impact of restructuring on provision for income taxes (903 ) (6,933 ) 10,651 (6,933 )
Impact of Tax Changes 32,187 - 32,187 -
Provision for income taxes, excluding impact of restructuring $ (1,576 ) $ 20,733 $ 27,030 $ 78,260
Income before provision for income taxes 24,355 18,436 88,970 232,459
Impact of restructuring and impairment expense:
Inventory write-off - 6,656 26,905 6,656
Restructuring and impairment 18,369 51,870 48,493 51,870
Impact of charges associated with our Q4 exit from Grow Tech:
Unrealized investment loss - - 9,009 -
Income before provision for income taxes, excluding impact of restructuring $ 42,724 $ 76,962 $ 173,377 $ 290,985
Effective tax rate -134.9 % 150.1 % -17.8 % 36.6 %
Effective tax rate, excluding restructuring impact -3.7 % 26.9 % 15.6 % 26.9 %
NU SKIN ENTERPRISES, INC.
Reconciliation of Earnings Per Share Excluding Impact of Restructuring to GAAP Earnings Per Share
(in thousands, except for per share amounts)
Three months ended December 31, Year ended December 31,
2022 2021 2022 2021
Net income $ 57,215 $ (9,230 ) $ 104,778 $ 147,266
Impact of restructuring and impairment expense:
Restructuring and impairment 18,369 51,870 48,493 51,870
Cost of sales - Restructuring - 6,656 26,905 6,656
Tax impact 903 6,933 (9,566 ) 6,933
Impact of charges associated with our Q4 exit from Grow Tech:
Unrealized loss on investment - - 9,009 -
Tax impact - - (1,085 ) -
Tax impact from method change (32,187 ) - (32,187 ) -
Adjusted net income $ 44,300 $ 56,229 $ 146,347 $ 212,725
Diluted earnings per share $ 1.15 $ (0.18 ) $ 2.07 $ 2.86
Diluted earnings per share, excluding restructuring impact $ 0.89 $ 1.11 $ 2.90 $ 4.14
Weighted-average common shares outstanding (000): 49,783 50,801 50,525 51,427
NU SKIN ENTERPRISES, INC.
Reconciliation of Earnings Per Share Excluding Impact of Restructuring to GAAP Earnings Per Share
Three months ended March 31, Year ended December 31,
2023 - Low- end 2023 High- end 2023 - Low- end 2023 High- end
Earnings Per Share $ 0.17 $ 0.27 $ 2.27 $ 2.67
Impact of restructuring and impairment expense:
Restructuring and impairment 0.10 0.10 0.10 0.10
Tax impact (0.02 ) (0.02 ) (0.02 ) (0.02 )
Adjusted EPS $ 0.25 $ 0.35 $ 2.35 $ 2.75
Media: media@nuskin.com, (801) 345-6397
Investors: investorrelations@nuskin.com, (801) 345-3577

Frequently Asked Questions

What were Nu Skin's Q4 2022 revenues?

Nu Skin's Q4 2022 revenues were $522.3 million, down 22% year-over-year.

How many customers did Nu Skin have in Q4 2022?

In Q4 2022, Nu Skin had 1,147,124 customers, a decrease of 16%.

What is the EPS for Nu Skin in Q4 2022?

Nu Skin's EPS for Q4 2022 was $1.15, or $0.89 excluding certain charges.

What is Nu Skin's 2023 revenue outlook?

Nu Skin projects 2023 revenue between $2.03 and $2.18 billion.

What strategies will Nu Skin pursue in 2023?

Nu Skin plans to introduce new products and enhance its app capabilities in 2023.

Last updated: Feb 15, 2023