Full Press Release Details
Nu Skin Enterprises Reports Second Quarter Results
PROVO, Utah - Aug. 8, 2024 - Nu Skin Enterprises
Inc. (NYSE: NUS) today announced second quarter results in line with top-line guidance.
Q2 2024 vs. Prior-year Quarter
| Revenue | $439.1 million; (12.2)% (4.2)% FX impact or $(21.0) million Rhyz revenue $67.8 million; 32.3% | ||
| Earnings Per Share (EPS) | $(2.38) or $0.21 excluding restructuring and impairment charges, compared to $0.54 | ||
| Customers | 893,514; (14)% | ||
| Paid Affiliates | 155,486; (17)% or (9)% excluding an adjustment to eligibility requirements | ||
| Sales Leaders | 38,592; (16)% |
"We are pleased with our progress as we perform to plan on our transformational efforts, and we are on track as evidenced by our second quarter results," said Ryan
Napierski, Nu Skin president and CEO. "Our revenue was in-line with our expectations despite a 4 percent FX headwind, while adjusted earnings per share slightly exceeded our projections due to heightened operational discipline, excluding our
restructuring and impairment charges. As our core Nu Skin business continues to navigate the macro-economic environment, we were encouraged by sequential gains in several of our markets including the U.S. and most of Southeast Asia/Pacific.
Additionally, our Rhyz business grew 32 percent versus the prior-year quarter led by strong performances in our Mavely affiliate platform and manufacturing companies.
"We are intensifying our transformation efforts to become a leading integrated beauty, wellness and lifestyle ecosystem by building synergistic value between our Nu Skin
core and Rhyz. In late July, we held our first Western market, in-person affiliate event in over five years with a similar event for Eastern markets coming in September. At the event, we were able to drive energy and alignment among our leaders as we
previewed our MYND360 cognitive health division and promoted new activation efforts to grow our salesforce. We also announced plans for a Nu Skin/Mavely app, with Mavely's more than 1,200 brands and 70,000 everyday influencers, for our Nu Skin
affiliates, anticipated for second-half introduction in the U.S.
"We are enhancing our developing market strategy including a revised business model, targeted product offering and streamlined operating infrastructure beginning with Latin
America and parts of Southeast Asia in the second half. In addition, we are intensifying our plans to enter India with a proprietary business model that will be a catalyst for expansion into other emerging markets. We are also exploring integrated
brand building initiatives, including digital marketing and third-party marketplaces, as we strive to be wherever our customers seek to find us."
Q2 2024 Year-over-year Operating Results
| Revenue | $439.1 million compared to $500.3 million (4.2)% FX impact or $(21.0) million Rhyz revenue $67.8 million; +32.3% | ||
| Gross Margin | 70.0% compared to 72.9% Nu Skin business was 76.1% compared to 77.2% | ||
| Selling Expenses | 37.7% compared to 37.0% Nu Skin business was 42.2% compared to 40.2% | ||
| G&A Expenses | 26.9% compared to 27.4% | ||
| Operating Margin | (28.6)% or 5.4% excluding restructuring and impairment charges compared to 8.5% | ||
| Interest Expense | $6.7 million compared to $5.8 million | ||
| Other Income/(Expense) | $0.6 million compared to $0.4 million | ||
| Income Tax Rate | 10.2% or 41.4% excluding restructuring and impairment charges compared to 27.5% | ||
| EPS | $(2.38) or $0.21 excluding restructuring and impairment charges compared to $0.54 |
| Dividend Payments | $3.0 million | ||
| Stock Repurchases | $0.0 million $162.4 million remaining in authorization |
Q3 and Full-year 2024 Outlook
| Q3 2024 Revenue | $430 to $465 million; (14)% to (7)% Approximately (4) to (3)% FX impact | ||
| Q3 2024 EPS | $0.08 to $0.18 or $0.15 to $0.25 non-GAAP | ||
| 2024 Revenue | $1.73 to $1.81 billion; (12)% to (8)% Approximately (4) to (3)% FX impact | ||
| 2024 EPS | $(2.01) to $(1.81) or $0.75 to $0.95 non-GAAP |
"As we continue to refine our operating model during our transformation, we remain diligent in pursuing cost saving initiatives going forward,
including additional product portfolio optimization along with expense management," said James D. Thomas, chief financial officer. "We remain on track with our cost efficiency program as reflected by our reductions in G&A expense, helping to
protect profitability despite revenue pressures. During the quarter, we generated $51.2 million in cash from operations, reduced inventory levels and paid down debt to strengthen our balance sheet. We also performed an impairment analysis and
recorded a $141 million non-cash charge for impairment of goodwill and other intangibles as a result of the decline in stock price and current market conditions.
"Given that we have performed in-line with expectations for the first half of the year while also considering the increasing FX headwind, we believe
it prudent to narrow our annual revenue guidance range. We are now projecting 2024 revenue in the $1.73 to $1.81 billion range, with earnings of $(2.01) to $(1.81) or $0.75 to $0.95 excluding restructuring and impairment charges. Our Q3 guidance
assumes continued sequential improvement with projected revenue of $430 to $465 million and earnings per share of $0.08 to $0.18 or $0.15 to $0.25 excluding restructuring and impairment charges."
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 Aug. 22, 2024.
About Nu Skin Enterprises Inc.
The Nu Skin Enterprises Inc. (NYSE: NUS) family of companies includes Nu Skin and Rhyz
Inc. Nu Skin is an integrated beauty and wellness company, powered by a dynamic
affiliate opportunity platform, which operates in nearly 50 markets worldwide. Backed by 40 years of scientific research, the company's products help people look, feel and live their best with brands including Nu Skin personal care, Pharmanex
nutrition and ageLOC anti-aging, which includes an award-winning line of beauty device systems. Formed in 2018, Rhyz is a synergistic ecosystem of consumer, technology and manufacturing companies focused on innovation within the beauty, wellness and lifestyle categories.
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 and growth opportunities, strategies, sales force, shareholder value, product previews and launches, product portfolio optimization, transformation, evolution,
operational and financial initiatives, digital tools and initiatives, new market expansion, and plans for developing and emerging markets; projections regarding revenue, expenses, margins, tax rates, earnings per share, foreign currency
fluctuations, future dividends, uses of cash, financial position 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," "become," ""plan," accelerate," "project," "continue," "outlook," "guidance," "improve," "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, operating margin and income tax rate, each excluding restructuring and impairment charges, also are non-GAAP financial measures.
Restructuring and impairment 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 these
charges facilitates period-to-period comparisons of the company's performance. Please see the reconciliations of these items to our earnings per share, operating margin and income tax rate calculated under GAAP, below.
The following table sets forth revenue for the three-month periods ended June 30, 2024, and 2023 for each of our reportable segments (U.S. dollars in
| Three Months Ended June 30, | Constant- Currency | |||||||||||||||
| 2024 | 2023 | Change | Change | |||||||||||||
| Nu Skin | ||||||||||||||||
| Americas | $ | 84,935 | $ | 107,641 | (21.1 | )% | (15.1 | )% | ||||||||
| Mainland China | 64,710 | 88,362 | (26.8 | )% | (24.5 | )% | ||||||||||
| Southeast Asia/Pacific | 60,341 | 63,764 | (5.4 | )% | (0.5 | )% | ||||||||||
| Japan | 42,587 | 50,862 | (16.3 | )% | (4.9 | )% | ||||||||||
| South Korea | 44,119 | 53,686 | (17.8 | )% | (14.3 | )% | ||||||||||
| Europe & Africa | 40,714 | 46,968 | (13.3 | )% | (12.3 | )% | ||||||||||
| Hong Kong/Taiwan | 33,846 | 37,108 | (8.8 | )% | (5.5 | )% | ||||||||||
| Nu Skin other | (4 | ) | 597 | (100.7 | )% | (100.8 | )% | |||||||||
| Total Nu Skin | 371,248 | 448,988 | (17.3 | )% | (12.6 | )% | ||||||||||
| Rhyz Investments | ||||||||||||||||
| Manufacturing | 51,473 | 45,551 | 13.0 | % | 13.0 | % | ||||||||||
| Rhyz other | 16,360 | 5,718 | 186.1 | % | 186.1 | % | ||||||||||
| Total Rhyz Investments | 67,833 | 51,269 | 32.3 | % | 32.3 | % | ||||||||||
| Total | $ | 439,081 | $ | 500,257 | (12.2 | )% | (8.0 | )% |
The following table sets forth revenue for the six-month periods ended June 30, 2024, and 2023 for each of our reportable segments (U.S. dollars in
| Six Months Ended June 30, | Constant- Currency | |||||||||||||||
| 2024 | 2023 | Change | Change | |||||||||||||
| Nu Skin | ||||||||||||||||
| Americas | $ | 159,966 | $ | 208,798 | (23.4 | )% | (17.5 | )% | ||||||||
| Mainland China | 125,777 | 156,338 | (19.5 | )% | (16.5 | )% | ||||||||||
| Southeast Asia/Pacific | 120,406 | 131,574 | (8.5 | )% | (4.4 | )% | ||||||||||
| Japan | 86,823 | 103,468 | (16.1 | )% | (5.3 | )% | ||||||||||
| South Korea | 85,082 | 124,010 | (31.4 | )% | (28.5 | )% | ||||||||||
| Europe & Africa | 82,987 | 94,412 | (12.1 | )% | (12.1 | )% | ||||||||||
| Hong Kong/Taiwan | 64,312 | 71,656 | (10.2 | )% | (7.6 | )% | ||||||||||
| Nu Skin other | 668 | 482 | 38.6 | % | 38.6 | % | ||||||||||
| Total Nu Skin | 726,021 | 890,738 | (18.5 | )% | (14.1 | )% | ||||||||||
| Rhyz Investments | ||||||||||||||||
| Manufacturing | 101,775 | 81,318 | 25.2 | % | 25.2 | % | ||||||||||
| Rhyz other | 28,591 | 9,663 | 195.9 | % | 195.9 | % | ||||||||||
| Total Rhyz Investments | 130,366 | 90,981 | 43.3 | % | 43.3 | % | ||||||||||
| Total | $ | 856,387 | $ | 981,719 | (12.8 | )% | (8.8 | )% |
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 June 30, 2024, and 2023:
| Three Months Ended June 30, | ||||||||||||
| 2024 | 2023 | Change | ||||||||||
| Customers | ||||||||||||
| Americas | 226,626 | 263,138 | (14 | )% | ||||||||
| Mainland China | 179,021 | 214,907 | (17 | )% | ||||||||
| Southeast Asia/Pacific | 88,662 | 106,283 | (17 | )% | ||||||||
| Japan | 109,357 | 112,484 | (3 | )% | ||||||||
| South Korea | 99,358 | 112,019 | (11 | )% | ||||||||
| Europe & Africa | 143,336 | 177,472 | (19 | )% | ||||||||
| Hong Kong/Taiwan | 47,154 | 54,815 | (14 | )% | ||||||||
| Total Customers | 893,514 | 1,041,118 | (14 | )% |
| Paid Affiliates | ||||||||||||
| Americas | 29,531 | 36,048 | (18 | )% | ||||||||
| Mainland China | 24,404 | 28,825 | (15 | )% | ||||||||
| Southeast Asia/Pacific (1) | 29,701 | 32,769 | (9 | )% | ||||||||
| Japan (1) | 21,575 | 36,765 | (41 | )% | ||||||||
| South Korea | 22,116 | 23,012 | (4 | )% | ||||||||
| Europe & Africa | 17,402 | 19,906 | (13 | )% | ||||||||
| Hong Kong/Taiwan | 10,757 | 10,327 | 4 | % | ||||||||
| Total Paid Affiliates | 155,486 | 187,652 | (17 | )% |
| Sales Leaders | ||||||||||||
| Americas | 6,070 | 7,872 | (23 | )% | ||||||||
| Mainland China | 10,266 | 13,777 | (25 | )% | ||||||||
| Southeast Asia/Pacific | 5,601 | 5,814 | (4 | )% | ||||||||
| Japan | 6,116 | 5,853 | 4 | % | ||||||||
| South Korea | 4,689 | 5,784 | (19 | )% | ||||||||
| Europe & Africa | 3,432 | 4,105 | (16 | )% | ||||||||
| Hong Kong/Taiwan | 2,418 | 2,602 | (7 | )% | ||||||||
| Total Sales Leaders | 38,592 | 45,807 | (16 | )% |
(1) The June 30, 2024, number is affected by a change in eligibility requirements for receiving certain rewards within our compensation structure. We
plan to implement these changes in additional segments over the next several quarters.
NU SKIN ENTERPRISES, INC.
Consolidated Statements of Income (Unaudited)
(U.S. dollars in thousands, except per share amounts)
| Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
| 2024 | 2023 | 2024 | 2023 | |||||||||||||
| Revenue | $ | 439,081 | $ | 500,257 | $ | 856,387 | $ | 981,719 | ||||||||
| Cost of sales | 131,904 | 135,542 | 255,146 | 269,130 | ||||||||||||
| Gross profit | 307,177 | 364,715 | 601,241 | 712,589 | ||||||||||||
| Operating expenses: | ||||||||||||||||
| Selling expenses | 165,463 | 185,165 | 319,005 | 373,289 | ||||||||||||
| General and administrative expenses | 117,921 | 137,044 | 242,487 | 270,943 | ||||||||||||
| Restructuring and impairment expenses | 149,350 | - | 156,484 | 9,787 | ||||||||||||
| Total operating expenses | 432,734 | 322,209 | 717,976 | 654,019 | ||||||||||||
| Operating income (loss) | (125,557 | ) | 42,506 | (116,735 | ) | 58,570 | ||||||||||
| Interest expense | 6,720 | 5,769 | 14,045 | 10,657 | ||||||||||||
| Other expense, net | 629 | 376 | 233 | 3,788 | ||||||||||||
| Income (loss) before provision for income taxes | (131,648 | ) | 37,113 | (130,547 | ) | 51,701 | ||||||||||
| Provision (benefit) for income taxes | (13,390 | ) | 10,221 | (11,756 | ) | 13,433 | ||||||||||
| Net income (loss) | $ | (118,258 | ) | $ | 26,892 | $ | (118,791 | ) | $ | 38,268 | ||||||
| Net income (loss) per share: | ||||||||||||||||
| Basic | $ | (2.38 | ) | $ | 0.54 | $ | (2.39 | ) | $ | 0.77 | ||||||
| Diluted | $ | (2.38 | ) | $ | 0.54 | $ | (2.39 | ) | $ | 0.76 | ||||||
| Weighted-average common shares outstanding (000s): | ||||||||||||||||
| Basic | 49,688 | 49,931 | 49,613 | 49,789 | ||||||||||||
| Diluted | 49,688 | 50,161 | 49,613 | 50,098 |
NU SKIN ENTERPRISES, INC.
Consolidated Balance Sheets (Unaudited)
(U.S. dollars in thousands)
| June 30, 2024 | December 31, 2023 | |||||||
| ASSETS | ||||||||
| Current assets: | ||||||||
| Cash and cash equivalents | $ | 224,250 | $ | 256,057 | ||||
| Current investments | 8,671 | 11,759 | ||||||
| Accounts receivable, net | 71,554 | 72,879 | ||||||
| Inventories, net | 243,994 | 279,978 | ||||||
| Prepaid expenses and other | 105,937 | 81,198 | ||||||
| Total current assets | 654,406 | 701,871 | ||||||
| Property and equipment, net | 411,918 | 432,965 | ||||||
| Operating lease right-of-use assets | 88,071 | 90,107 | ||||||
| Goodwill | 99,885 | 230,768 | ||||||
| Other intangible assets, net | 88,464 | 105,309 | ||||||
| Other assets | 243,228 | 245,443 | ||||||
| Total assets | $ | 1,585,972 | $ | 1,806,463 | ||||
| LIABILITIES AND STOCKHOLDERS' EQUITY | ||||||||
| Current liabilities: | ||||||||
| Accounts payable | $ | 36,305 | $ | 43,505 | ||||
| Accrued expenses | 242,288 | 260,366 | ||||||
| Current portion of long-term debt | 30,000 | 25,000 | ||||||
| Total current liabilities | 308,593 | 328,871 | ||||||
| Operating lease liabilities | 70,318 | 70,943 | ||||||
| Long-term debt | 428,327 | 478,040 | ||||||
| Other liabilities | 92,570 | 106,641 | ||||||
| Total liabilities | 899,808 | 984,495 | ||||||
| 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 | 621,440 | 621,853 | ||||||
| Treasury stock, at cost - 40.9 million and 41.1 million shares | (1,564,090 | ) | (1,570,440 | ) | ||||
| Accumulated other comprehensive loss | (116,995 | ) | (100,006 | ) | ||||
| Retained earnings | 1,745,718 | 1,870,470 | ||||||
| Total stockholders' equity | 686,164 | 821,968 | ||||||
| Total liabilities and stockholders' equity | $ | 1,585,972 | $ | 1,806,463 |
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 June 30, | Six months ended June 30, | |||||||||||||||
| 2024 | 2023 | 2024 | 2023 | |||||||||||||
| Operating Income | $ | (125,557 | ) | $ | 42,506 | $ | (116,735 | ) | $ | 58,570 | ||||||
| Impact of restructuring and impairment: | ||||||||||||||||
| Restructuring and impairment | 149,350 | - | 156,484 | 9,787 | ||||||||||||
| Adjusted operating income | $ | 23,793 | $ | 42,506 | $ | 39,749 | $ | 68,357 | ||||||||
| Operating margin | (28.6 | )% | 8.5 | % | (13.6 | )% | 6.0 | % | ||||||||
| Operating margin, excluding restructuring impact | 5.4 | % | 8.5 | % | 4.6 | % | 7.0 | % | ||||||||
| Revenue | $ | 439,081 | $ | 500,257 | $ | 856,387 | $ | 981,719 |
NU SKIN ENTERPRISES, INC.
Reconciliation of Effective Tax Rate Excluding Impact of Restructuring and Impairment to GAAP Effective Tax Rate
(in thousands, except for per share amounts)
| Three months ended June 30, | Six months ended June 30, | |||||||||||||||
| 2024 | 2023 | 2024 | 2023 | |||||||||||||
| Provision (benefit) for income taxes | $ | (13,390 | ) | $ | 10,221 | $ | (11,756 | ) | $ | 13,433 | ||||||
| Impact of restructuring and impairment on provision for income taxes | 20,715 | - | 23,071 | 2,593 | ||||||||||||
| Provision for income taxes, excluding impact of restructuring and impairment | $ | 7,325 | $ | 10,221 | $ | 11,315 | $ | 16,026 | ||||||||
| Income before provision for income taxes | (131,648 | ) | 37,113 | (130,547 | ) | 51,701 | ||||||||||
| Impact of restructuring and impairment expense: | ||||||||||||||||
| Restructuring and impairment | 149,350 | - | 156,484 | 9,787 | ||||||||||||
| Income before provision for income taxes, excluding impact of restructuring and impairment | $ | 17,702 | $ | 37,113 | $ | 25,937 | $ | 61,488 | ||||||||
| Effective tax rate | 10.2 | % | 27.5 | % | 9.0 | % | 26.0 | % | ||||||||
| Effective tax rate, excluding restructuring and impairment impact | 41.4 | % | 27.5 | % | 43.6 | % | 26.1 | % |
NU SKIN ENTERPRISES, INC.
Reconciliation of Earnings Per Share Excluding Impact of Restructuring and Impairment to GAAP Earnings Per Share
(in thousands, except for per share amounts)
| Three months ended June 30, | Six months ended June 30, | |||||||||||||||
| 2024 | 2023 | 2024 | 2023 | |||||||||||||
| Net income | $ | (118,258 | ) | $ | 26,892 | $ | (118,791 | ) | $ | 38,268 | ||||||
| Impact of restructuring and impairment expense: | ||||||||||||||||
| Restructuring and impairment | 149,350 | - | 156,484 | 9,787 | ||||||||||||
| Tax impact | (20,715 | ) | - | (23,071 | ) | (2,593 | ) | |||||||||
| Adjusted net income | $ | 10,377 | $ | 26,892 | $ | 14,622 | $ | 45,462 | ||||||||
| Diluted earnings per share | $ | (2.38 | ) | $ | 0.54 | $ | (2.39 | ) | $ | 0.76 | ||||||
| Diluted earnings per share, excluding restructuring impact | $ | 0.21 | $ | 0.54 | $ | 0.29 | $ | 0.91 | ||||||||
| Weighted-average common shares outstanding (000) | 49,688 | 50,161 | 49,613 | 50,098 |
NU SKIN ENTERPRISES, INC.
Reconciliation of Earnings Per Share Excluding Impact of Restructuring and Impairment to GAAP Earnings Per Share
| Three months ended September 30, 2024 | Year ended December 31, 2024 | |||||||||||||||
| Low end | High end | Low end | High end | |||||||||||||
| Earnings Per Share | $ | 0.08 | $ | 0.18 | $ | (2.01 | ) | $ | (1.81 | ) | ||||||
| Impact of restructuring and impairment expense: | ||||||||||||||||
| Restructuring and impairment | 0.10 | 0.10 | 3.25 | 3.25 | ||||||||||||
| Tax impact | (0.03 | ) | (0.03 | ) | (0.50 | ) | (0.50 | ) | ||||||||
| Adjusted EPS | $ | 0.15 | $ | 0.25 | $ | 0.75 | $ | 0.95 |
Media: media@nuskin.com, (801) 345-6397
Investors: investorrelations@nuskin.com, (801) 345-3577