Nu Skin Enterprises Reports Third Quarter 2023 Financial Results

PROVO, Utah - Nov. 1, 2023 - Nu Skin Enterprises Inc.

(NYSE: NUS) today announced third quarter 2023 results.

Q3 2023 vs. Prior-year Quarter

Revenue	$498.8 million; (7)%
	(1)% FX impact or $(8.1) million
Earnings Per Share (EPS)	$(0.74) or $0.56 excluding an inventory write-off compared to $(0.51) or $0.47 excluding restructuring and impairment charges
Customers	978,907; (21)%
Paid Affiliates	186,162; (23)% or (13)% excluding an adjustment to eligibility requirements
Sales Leaders	47,031; (6)%

"Our third quarter results were softer than expected as persistent macro-economic challenges in several of our key markets negatively affected consumer spending and customer

acquisition, particularly in our Mainland China and Americas segments, along with a continued strong U.S. dollar," said Ryan Napierski, Nu Skin president and CEO. "Although we are disappointed in the third quarter results of our Nu Skin business, we

are encouraged by stabilization and modest growth in three of our Nu Skin reporting segments, highlighted by double-digit gains in Europe/Africa. We are also pleased with accelerated growth of our Rhyz businesses as we lean further into our synergistic

enterprise ecosystem.

"We continued to advance key initiatives aimed at driving long-term success, such as introducing ageLOC WellSpa iO , a smart device system focused on holistic wellness and

beauty; rolling out a new channel growth incentive; and gaining additional traction in monthly active users of our Vera and Stela apps," continued Napierski. "Given the current global headwinds and their impact, we are strategically re-evaluating

several aspects of our Nu Skin business, including our product portfolio, global processes and organization, and operational footprint. This is to ensure we continue executing on the transformational initiatives that will shape Nu Skin's future,

including the introduction of a new mental wellness category in 2024. We are also aggressively managing costs to help drive growth and profitability as we work toward our long-term vision."

Q3 2023 Year-over-year Operating Results

Revenue	$498.8 million compared to $537.8 million
	(1)% FX impact or $(8.1) million
Gross Margin	58.6% or 71.8% excluding an inventory write-off compared to 67.7% or 72.7% excluding restructuring and impairment charges
	Nu Skin business was 61.8% or 76.8% excluding inventory write-off compared to 73.0% or 76.7% excluding restructuring and impairment charges
Selling Expenses	37.6% compared to 40.3%
	Nu Skin business was 41.7% compared to 43.5%
G&A Expenses	26.2% compared to 25.7%
Operating Margin	(5.3)% or 7.9% excluding an inventory write-off compared to (3.8)% or 6.8% excluding restructuring and impairment charges
Other Expense	$(8.1) million compared to $(8.7) million or $(5.4) million excluding restructuring and impairment charges
Income Tax Rate	(7.3)% or 10.1% excluding an inventory write-off compared to 12.3% or 24.0% excluding restructuring and impairment charges
EPS	($0.74) or $0.56 excluding an inventory write-off compared to $(0.51) or $0.47 excluding restructuring and impairment charges

Dividend Payments	$19.5 million
Stock Repurchases	$13.0 million
	$162.4 million remaining in authorization

Q4 and Full-year 2023 Outlook

Q4 2023 Revenue	$440 to $480 million; (16)% to (8)%
	Approximately (3) to (2)% FX impact
Q4 2023 EPS	$(0.14) to $0.01 or $0.15 to $0.30 non-GAAP
2023 Revenue	$1.92 to $1.96 billion; (14)% to (12)%
	Approximately (3) to (2)% FX impact
2023 EPS	$(0.10) to $0.05 or $1.62 to $1.77 non-GAAP

"Given the state of our business and in line with our global strategic review, we made the decision to accelerate our product portfolio optimization

resulting in a $65.7 million Q3 inventory write-off and are adjusting our annual guidance, which includes an anticipated Q4 restructuring charge of $15 to $25 million," added James D. Thomas, chief financial officer. "Our 2023 revenue is now expected

to be $1.92 to $1.96 billion, with an approximate 3 percent foreign currency headwind. We anticipate reported EPS of $(0.10) to $0.05 or adjusted EPS of $1.62 to $1.77, which excludes inventory write-off and restructuring charges. For the fourth

quarter, we project revenue of $440 to $480 million, assuming a negative foreign currency impact of approximately 3 percent, with reported earnings per share of $(0.14) to $0.01 or $0.15 to $0.30 when excluding the fourth quarter charge."

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 Nov. 15, 2023.

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 nearly 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. Rhyz is the strategic investment arm of Nu Skin Enterprises. 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, shareholder value, strategies, transformation, initiatives, product pipeline and product introductions/launches, digital and social-commerce tools and initiatives,

customers, sales leaders, and affiliates; projections regarding revenue, expenses, future restructuring and impairment charges, 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," "aim," "anticipate," "project," "continue," "outlook," "guidance," "remain,"

"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, other expense and income tax rate, each excluding inventory write-off charges and/or restructuring

and impairment charges, also are non-GAAP financial measures. Inventory write-off charges and 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 inventory write-off charges and restructuring and impairment charges facilitates period-to-period comparisons of the company's performance. Please see the

reconciliations of these items to our earnings per share, gross margin, operating margin, other expense and income tax rate calculated under GAAP, below.

The following table sets forth revenue for the three-month periods ended September 30, 2023, and 2022 for each of our reportable segments (U.S. dollars in thousands):

	Three Months Ended September 30,			Change			Constant- Currency Change
2023		2022
Nu Skin
Americas	$	91,671			$	131,591		(30	)%	(27	)%
Mainland China		70,225				75,151		(7	)%	(1	)%
Southeast Asia/Pacific		68,743				83,502		(18	)%	(16	)%
South Korea		63,709				67,237		(5	)%	(7	)%
Japan		53,399				53,276		-		5	%
Europe & Africa		50,048				45,099		11	%	3	%
Hong Kong/Taiwan		40,724				39,587		3	%	6	%
Nu Skin other		(274	)			496		(155	)%	(155	)%
Total Nu Skin		438,245				495,939		(12	)%	(10	)%
Rhyz Investments
Manufacturing		49,714				41,328		20	%	20	%
Rhyz other		10,813				538		1910	%	1910	%
Total Rhyz Investments		60,527				41,866		45	%	45	%
Total	$	498,772			$	537,805		(7	)%	(6	)%

The following table sets forth revenue for the nine-month periods ended September 30, 2023, and 2022 for each of our reportable segments (U.S. dollars in thousands):

	Nine Months Ended September 30,		Change			Constant- Currency Change
	2023		2022
Nu Skin
Americas	$	300,469		$	379,616		(21	)%	(17	)%
Mainland China		226,563			286,454		(21	)%	(16	)%
Southeast Asia/Pacific		200,317			267,805		(25	)%	(23	)%
South Korea		187,719			208,678		(10	)%	(8	)%
Japan		156,867			171,019		(8	)%	(1	)%
Europe & Africa		144,460			148,938		(3	)%	(4	)%
Hong Kong/Taiwan		112,380			117,408		(4	)%	(1	)%
Nu Skin other		208			2,434		(91	)%	(91	)%
Total Nu Skin		1,328,983			1,582,352		(16	)%	(13	)%
Rhyz Investments
Manufacturing		131,032			119,898		9	%	9	%
Rhyz other		20,476			1,069		1815	%	1815	%
Total Rhyz Investments		151,508			120,967		25	%	25	%
Total	$	1,480,491		$	1,703,319		(13	)%	(10	)%

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 September 30, 2023, and 2022:

	Three Months Ended September 30,		Change
2023		2022
Customers
Americas		231,215		316,123	(27	)%
Mainland China		189,221		256,183	(26	)%
Southeast Asia/Pacific		111,151		153,432	(28	)%
South Korea		109,550		134,549	(19	)%
Japan		114,316		121,202	(6	)%
Europe & Africa		169,320		187,906	(10	)%
Hong Kong/Taiwan		54,134		69,989	(23	)%
Total Customers		978,907		1,239,384	(21	)%

Paid Affiliates
Americas	32,769	44,745	(27	)%
Mainland China	27,509	23,088	19	%
Southeast Asia/Pacific	33,574	40,624	(17	)%
South Korea (1)	24,110	47,852	(50	)%
Japan	37,695	38,119	(1	)%
Europe & Africa (1)	19,254	31,409	(39	)%
Hong Kong/Taiwan (1)	11,251	17,439	(35	)%
Total Paid Affiliates	186,162	243,276	(23	)%

Sales Leaders
Americas	7,537	9,545	(21	)%
Mainland China	12,647	11,897	6	%
Southeast Asia/Pacific	6,351	7,618	(17	)%
South Korea	6,436	6,992	(8	)%
Japan	7,087	6,063	17	%
Europe & Africa	4,105	4,777	(14	)%
Hong Kong/Taiwan	2,868	2,932	(2	)%
Total Sales Leaders	47,031	49,824	(6	)%

(1) The September 30, 2023, 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 September 30,			Nine Months Ended September 30,
	2023			2022			2023		2022
Revenue	$	498,772			$	537,805		$	1,480,491		$	1,703,319
Cost of sales		206,505				173,500			475,635			483,099
Gross profit		292,267				364,305			1,004,856			1,220,220
Operating expenses:
Selling expenses		187,750				216,478			561,039			678,603
General and administrative expenses		130,882				137,987			401,825			428,105
Restructuring and impairment expenses		-				30,124			9,787			30,124
Total operating expenses		318,632				384,589			972,651			1,136,832
Operating income (loss)		(26,365	)			(20,284	)		32,205			83,388
Other expense, net		(8,086	)			(8,680	)		(14,955	)		(18,773	)
Income (loss) before provision for income taxes		(34,451	)			(28,964	)		17,250			64,615
Provision (benefit) for income taxes		2,504				(3,574	)		15,937			17,052
Net income (loss)	$	(36,955	)		$	(25,390	)	$	1,313		$	47,563
Net income (loss) per share:
Basic	$	(0.74	)		$	(0.51	)	$	0.03		$	0.95
Diluted	$	(0.74	)		$	(0.51	)	$	0.03		$	0.94
Weighted-average common shares outstanding (000s):
Basic		49,859				50,199			49,812			50,187
Diluted		49,859				50,199			50,029			50,822

NU SKIN ENTERPRISES, INC.

Consolidated Balance Sheets (Unaudited)

(U.S. dollars in thousands)

	September 30, 2023			December 31, 2022
ASSETS
Current assets:
Cash and cash equivalents	$	233,314			$	264,725
Current investments		16,673				13,784
Accounts receivable, net		77,251				47,360
Inventories, net		291,103				346,183
Prepaid expenses and other		82,781				87,816
Total current assets		701,122				759,868
Property and equipment, net		428,932				444,806
Operating lease right-of-use assets		86,315				98,734
Goodwill		229,469				206,432
Other intangible assets, net		108,972				66,701
Other assets		238,281				244,429
Total assets	$	1,793,091			$	1,820,970
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable	$	48,583			$	53,963
Accrued expenses		245,432				280,280
Current portion of long-term debt		140,000				25,000
Total current liabilities		434,015				359,243
Operating lease liabilities		68,208				76,540
Long-term debt		362,896				377,466
Other liabilities		105,785				110,425
Total liabilities		970,904				923,674
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		619,193				613,278
Treasury stock, at cost - 41.2 million and 41.1 million shares		(1,570,718	)			(1,569,061	)
Accumulated other comprehensive loss		(108,836	)			(86,509	)
Retained earnings		1,882,457				1,939,497
Total stockholders' equity		822,187				897,296
Total liabilities and stockholders' equity	$	1,793,091			$	$1,820,970

NU SKIN ENTERPRISES, INC.

Reconciliation of Gross Margin Excluding Impact of Inventory Write-off to GAAP Gross Margin