Nu Skin Enterprises, Inc. NUS posted dismal third-quarter 2024 results, with the top and bottom lines missing Zacks Consensus Estimate. Earnings and net sales declined year over year amid macroeconomic pressure and challenges in the direct selling industry. Taking into account persistent pressure in the core Nu Skin business, management is lowering its 2024 outlook.

In the third quarter, Nu Skin posted adjusted earnings of 17 cents a share, excluding inventory write-off, restructuring and impairment impact. The metric declined from the adjusted figure of 56 cents reported in the year-ago quarter. The bottom line missed the Zacks Consensus Estimate of 20 cents.

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Quarterly revenues of $430.1 million tumbled 13.8% year over year. Revenues included a negative impact of 3.4% from foreign currency fluctuations. On a constant-currency basis, revenues fell 10.4%. Rhyz revenues rose 20.9% year over year to $73.1. Nu Skin’s top line missed the Zacks Consensus Estimate of $444.1 million.

Sales leaders were down 19% year over year to 38,284. Nu Skin’s customer base dropped 15% to 831,768. The company’s paid affiliates were down 20% to 149,264. On an adjusted basis, paid affiliates tumbled 11%.

Nu Skin Enterprises, Inc. Price, Consensus and EPS Surprise

Nu Skin Enterprises, Inc. price-consensus-eps-surprise-chart | Nu Skin Enterprises, Inc. Quote

A Closer Look at NUS’ Q3 Results

Gross profit of $301.5 million increased from $292.3 million reported in the year-ago quarter. The gross margin (excluding inventory write-off impact) came in at 70.1%, down from 71.8% reported in the year-ago quarter. The Nu Skin business’ gross margin (excluding inventory write-off impact) came in at 76.5%, down from 76.8% reported in the year-ago quarter.

Selling expenses declined to $167.6 million from the $187.8 million reported in the prior-year quarter. As a percentage of revenues, the metric was 39%, up from 37.6% reported in the year-ago quarter. Nu Skin business’ selling expenses were 43.5%, up from 41.7% reported in the prior-year quarter.

General and administrative expenses of $115.6 million declined from $130.9 million in the year-ago quarter. As a percentage of revenues, general and administrative expenses were 26.9%, up from 26.2% in the year-ago period.

The company’s operating margin (excluding inventory write-off, restructuring and impairment impact) contracted to 4.2% from 7.9% reported in the year-ago quarter.

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Regional Revenue Results for NUS’ Q3

Region-wise, revenues declined 15.8%, 13.4%, 24.5%, 11.6%, 29.1%, 22.9% and 17.1% in the Americas, Southeast Asia/Pacific, Mainland China, Japan, South Korea, Europe & Africa and Hong Kong/Taiwan, respectively. Meanwhile, NUS’ other revenues surged significantly to $2,518 million.

NUS’ Financial Health Snapshot

This Zacks Rank #3 (Hold) company ended the quarter with cash and cash equivalents of $227.8 million, long-term debt of $373.5 million and total stockholders' equity of $706.9 million. In the reported quarter, the company paid out dividends of $3 million while not making any share repurchases. The company has $162.4 million remaining under the current share repurchase authorization.

Nu Skin announced a cash dividend of 6 cents per share, payable on Dec. 11, 2024, of shareholders’ record as of Nov. 29.

What to Expect From Nu Skin in 2024

Nu Skin anticipates revenues in the band of $1.70-$1.73 billion for 2024, which suggests a 12-14% decline from the year-ago period’s reported figure. The company envisions unfavorable foreign currency impacts of 4-3% on 2024 revenues. Earlier, the metric was expected to be in the range of $1.73-$1.81 billion.

Management envisions an adjusted earnings per share (EPS) of 65-75 cents. The projection suggests a decline from adjusted earnings of $1.85 recorded in 2023. Management had envisioned an adjusted EPS of 75-95 cents for 2024.

For the fourth-quarter 2024, the company expects revenues between $410 million and $445 million, including an unfavorable foreign currency impact of nearly 1% to 2%. The revenue projection suggests a decline of 9% to 16% from the year-ago quarter’s reported level. The company expects adjusted earnings of 19-29 cents a share.

The company’s shares have declined 35.9% in the past three months against the industry’s 4.3% growth.

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