Revenue Performance - Revenue for Q1 2024 decreased 13.3% to $417.3 million, down from $481.5 million in Q1 2023, with a 3.8% negative impact from foreign-currency fluctuations[95]. - Revenue for the three-month period ended March 31, 2024 decreased 13.3% to $417.3 million, compared to $481.5 million in the prior-year period[117]. - Revenue from the Americas segment decreased by 25.8% year-over-year, with subscription sales disruptions negatively impacting revenue[101][108]. - Mainland China revenue declined by 10.2% year-over-year, affected by macroeconomic challenges and decreased consumer spending[101][109]. - Japan's revenue decline was impacted by a 10.3% negative effect from unfavorable foreign-currency fluctuations[101][110]. - Total Customers decreased to 875,261, down 19% from 1,083,536 in the prior year[107]. Earnings and Profitability - Earnings per share for Q1 2024 decreased 104% to $(0.01), compared to $0.23 in Q1 2023, primarily due to the decline in revenue[97]. - Net income for the first quarter of 2024 was $(0.5) million, compared to $11.4 million in the prior-year period[125]. - Gross profit as a percentage of revenue was 70.5% for the first quarter of 2024, down from 72.3% in the prior-year period, with a 3.1 percentage decrease in gross margin attributed to increased write-offs[118]. - Selling expenses as a percentage of revenue decreased to 36.8% for the first quarter of 2024, compared to 39.1% in the prior-year period[119]. - General and administrative expenses decreased to $124.6 million in the first quarter of 2024, down from $133.9 million in the prior-year period[120]. Cash Flow and Capital Management - Cash from operations generated in the first three months of 2024 was $3.3 million, compared to a net outflow of $22.1 million during the prior-year period[126]. - Working capital as of March 31, 2024 was $338.0 million, down from $373.0 million as of December 31, 2023[127]. - Capital expenditures for the three months ended March 31, 2024 were $12.3 million, with an estimated total of $40–60 million planned for 2024[127]. - The company believes that existing cash balances, future cash flows from operations, and existing lines of credit will be adequate to fund cash needs on both short- and long-term bases[133]. - The company has the option to realign strategic plans, including a reduction in capital spending, stock repurchases, or dividend payments if cash flow needs are not met[133]. Strategic Initiatives and Growth - The launch of the ageLOC WellSpa iO smart connected device generated approximately $23.7 million in revenue during Q1 2024[96]. - Rhyz segments experienced a 57.5% growth, driven by acquisitions and organic growth, helping to partially offset declines in core Nu Skin segments[96]. - The company anticipates continued growth in the Rhyz segments, which are expected to diversify revenue and create synergies for owned and partner brands[96]. Foreign Currency and Risk Management - The company may seek to reduce exposure to fluctuations in foreign currency exchange rates through foreign currency exchange contracts and intercompany loans[149]. - The company regularly monitors foreign currency risks and takes measures to reduce the impact of foreign exchange fluctuations on operating results[149]. - The company uses constant-currency revenue change as a non-GAAP financial measure to facilitate period-to-period comparisons of performance[143]. - The company performed a sensitivity analysis indicating that a 5% reduction in annual earnings before interest and tax did not cause estimated fair values of reporting units to decline below carrying values[141]. - The company adopted highly inflationary accounting for its subsidiary in Argentina, with the functional currency becoming the U.S. dollar[148]. Tax and Interest Expenses - Interest expense increased to $7.3 million in the first quarter of 2024, compared to $4.9 million in the prior-year period[123]. - The effective tax rate for the first quarter of 2024 was 148.4% of pre-tax book income, compared to 22.0% in the prior-year period[124]. Impairment and Valuation - The fair value of all reporting units exceeded their carrying amounts by approximately 1% - 7%, indicating no impairment charge was required[139]. - Revenue and profitability forecasts considered recent and historical performance, strategic initiatives, industry trends, and macroeconomic factors[139].

Company Performance - Nu Skin Enterprises (NUS) reported quarterly earnings of $0.09 per share, exceeding the Zacks Consensus Estimate of $0.05 per share, but down from $0.37 per share a year ago, indicating an earnings surprise of 80% [1] - The company posted revenues of $417.31 million for the quarter ended March 2024, missing the Zacks Consensus Estimate by 3.09% and down from $481.46 million year-over-year [1] - Over the last four quarters, Nu Skin has surpassed consensus EPS estimates three times but has only topped consensus revenue estimates once [1] Stock Performance and Outlook - Nu Skin shares have declined approximately 36.9% since the beginning of the year, contrasting with the S&P 500's gain of 8.8% [2] - The future performance of Nu Skin's stock will largely depend on management's commentary during the earnings call and the company's earnings outlook [2] Earnings Estimates and Industry Context - The current consensus EPS estimate for the upcoming quarter is $0.37 on revenues of $458.3 million, and for the current fiscal year, it is $1.13 on revenues of $1.81 billion [4] - The Cosmetics industry, to which Nu Skin belongs, is currently ranked in the bottom 35% of over 250 Zacks industries, suggesting potential challenges for stock performance [4] - The Zacks Rank for Nu Skin is currently 3 (Hold), indicating that shares are expected to perform in line with the market in the near future [3]

Financial Performance - Q1 2024 revenue was $417.3 million, a decrease of 13.3% year-over-year, with a foreign exchange impact of $(18.2) million[2] - Earnings per share (EPS) for Q1 2024 was $(0.01), compared to $0.23 in the prior year, or $0.09 excluding restructuring charges[2] - Total revenue for Q1 2024 was $417.3 million, a decrease of 13.3% from $481.5 million in Q1 2023[24] - Gross profit for Q1 2024 was $294.1 million, down 15.5% from $347.9 million in Q1 2023[24] - Operating income decreased to $8.8 million in Q1 2024, compared to $16.1 million in Q1 2023, reflecting a decline of 45.1%[24] - Net loss for Q1 2024 was $(533,000), a significant drop from net income of $11.4 million in Q1 2023[24] - The effective tax rate for Q1 2024 was 148.4%, compared to 22.0% in Q1 2023, indicating a substantial increase[30] Customer Metrics - The total number of customers decreased by 19% year-over-year to 875,261[2] - Paid affiliates decreased by 30% to 154,171, or 14% excluding an adjustment to eligibility requirements[2] - The company plans to implement changes in eligibility requirements for receiving certain rewards, which is expected to reduce customer numbers by approximately 14,000 in Japan and 5,000 in Europe & Africa[21] Revenue Guidance - Q2 2024 revenue guidance is projected between $420 million and $455 million, reflecting a decrease of 16% to 9% year-over-year[5] - Full-year 2024 revenue guidance is set between $1.73 billion and $1.87 billion, a decrease of 12% to 5% year-over-year[6] Profitability Metrics - The gross margin for Q1 2024 was 70.5%, down from 72.3% in the prior year[7] - Adjusted operating income, excluding restructuring impacts, was $15.96 million for Q1 2024, compared to $25.85 million in Q1 2023[28] - Diluted earnings per share for Q1 2024 was $(0.01), down from $0.23 in Q1 2023[31] - Adjusted EPS for Q2 2024 is projected to be between $0.01 and $0.10, while for the full year 2024, it is expected to range from $0.77 to $1.16[34] - Restructuring expenses impacted EPS by $0.15 in Q2 2024 and $0.29 for the full year 2024[34] - The tax impact on EPS was $(0.06) for Q2 2024 and $(0.11) for the full year 2024[34] Strategic Initiatives - The company plans to launch the new MYND360 cognitive health line and expand into India next year[3] Shareholder Returns - Dividend payments for the quarter were $3.0 million, with $162.4 million remaining in stock repurchase authorization[4] Asset and Liability Overview - Total current assets decreased to $647.3 million as of March 31, 2024, down from $701.9 million at the end of 2023[26] - Total liabilities decreased to $931.7 million as of March 31, 2024, compared to $984.5 million at the end of 2023[26] Revenue Growth - Rhyz revenue grew by 57.5% year-over-year to $62.5 million[2]

Group 1 - Nu Skin Enterprises, Inc. (NUS) is expected to report a decline in both revenue and earnings for the first quarter of 2024, with revenue estimated at $430.6 million, reflecting a 10.6% decrease year-over-year [1] - The earnings consensus estimate remains unchanged at 5 cents per share, indicating an 86.5% decline compared to the same quarter last year [1] - The company has faced persistent macroeconomic challenges, including inflation affecting consumer spending and a shift towards cheaper alternatives, leading to poor sales performance in key regions [2] Group 2 - Nu Skin's revenue forecast for Q1 2024 ranges from $400 million to $435 million, suggesting a year-over-year decline of 10% to 17%, with an expected adverse foreign currency impact of approximately 2-3% [2] - The company is implementing its Nu Vision 2025 strategy, focusing on personalized beauty and wellness, social commerce, and digital platform expansion, which may positively influence its performance [3] - The Zacks model indicates that Nu Skin does not have a strong likelihood of an earnings beat, with a Zacks Rank of 3 and an Earnings ESP of 0.00% [4]

Core Insights - Nu Skin Enterprises, Inc. is facing ongoing macroeconomic challenges, including inflation affecting consumer spending and customer acquisition globally, alongside adverse currency fluctuations [1][2][4] - The company's stock has decreased by 27.3% over the past three months, contrasting with a 19.7% growth in the industry [1] Macroeconomic Setbacks - In Q4 2023, Nu Skin's revenues were $488.6 million, reflecting a year-over-year decline of approximately 6% [2] - Sales leaders decreased by 10% year-over-year to 44,059, while the customer base fell by 15% to 977,039 [2] - Paid affiliates dropped by 30% to 166,866, with an adjusted decline of 13% [2] Volatile Currency Movements - The company experienced a negative impact of 1% on revenues due to foreign currency fluctuations in Q4 2023 [3] - For 2024, Nu Skin anticipates a similar unfavorable foreign currency impact of 1% on revenues and nearly 3-2% for Q1 [3] Challenging Outlook - Management expects continued pressure on consumer spending due to persistent hyperinflation, alongside unfavorable currency translations [4] - Revenue projections for 2024 are estimated between $1.73 billion and $1.87 billion, indicating a decline of 12-5% from the previous year [4] - Adjusted EPS is forecasted to be between 95 cents and $1.35, down from $1.85 in 2023 [4] Q1 2024 Expectations - For Q1 2024, Nu Skin anticipates revenues between $400 million and $435 million, suggesting a decline of 17% to 10% from the same quarter last year [5] - The expected bottom line ranges from a loss of 7 cents to earnings of 3 cents per share [5] Strategic Initiatives - Nu Skin aims to create long-term enterprise value by focusing on three core initiatives: accelerating growth in Rhyz, launching a market expansion strategy starting in India in 2025, and enhancing its digital-first affiliate platform [6] - Despite these initiatives, the ongoing macroeconomic challenges remain significant in the near term [6]

Core Insights - Nu Skin has launched the RenuSpa iO, a unique beauty and wellness device that utilizes adaptive microcurrent technology to enhance skin stimulation and overall wellbeing [2][3] - The device is designed to provide visible beauty benefits while also promoting comprehensive wellness, making it a significant addition to Nu Skin's product portfolio [2][3] Product Features - RenuSpa iO adapts more than 80 times per second to the skin's conductivity, ensuring a personalized experience [2] - The device is designed for use on various body areas, including the upper and lower legs, arms, and abdomen, with metallic nodes that fit body contours [2] - It offers a spa-like experience, aiming to improve mood and overall feelings of wellbeing while leaving the skin energized and refreshed [2] Clinical Testing - A 12-week study with 42 participants demonstrated that the RenuSpa iO could visibly tone, hydrate, and reduce the appearance of dimpled skin, with improvements noted in skin firmness and smoothness [3] - Participants used the device five times a week for five minutes per area, with measurements taken at baseline and at weeks 2, 4, 8, and 12 [3] Availability - The RenuSpa iO is now available in the U.S. for $375, and the Nu Skin Vera app enhances the user experience by providing live data insights and guided tutorials [3] Company Background - Nu Skin Enterprises operates in nearly 50 markets worldwide and has nearly 40 years of scientific research backing its products, which include personal care, nutrition, and anti-aging solutions [3] - The company also includes Rhyz Inc., formed in 2018, focusing on innovation within the beauty, wellness, and lifestyle sectors [3]

Core Insights - Nu Skin's shares fell 20.7% due to weak forward guidance despite a better-than-expected quarterly update [1] Financial Performance - For Q4 2023, Nu Skin's revenue decreased by 6% year-over-year to $488.6 million, with adjusted earnings of $0.37 per share, surpassing analyst expectations of $0.28 per share on revenue of $477.8 million [2] - The company faced challenges from macroeconomic pressures and ongoing business transformation efforts [2] Future Outlook - For full-year 2024, Nu Skin provided guidance of revenue between $1.73 billion and $1.87 billion, representing a decline of 12% to 5% from 2023, with adjusted earnings per share projected between $0.95 and $1.35 [3] - These projections are significantly below Wall Street's estimates of $2.05 per share on revenue of $2.01 billion for 2024 [3] - The ongoing restructuring may position Nu Skin for future growth, but current market sentiment is negative, reflected in the stock hovering near its 52-week low [3]

Core Insights - Nu Skin Enterprises, Inc. (NUS) reported a decline in both revenue and earnings for the fourth quarter of 2023, although results exceeded the Zacks Consensus Estimate [1][3] - The company is focusing on long-term enterprise value by investing in three core initiatives, including growth in Rhyz, market expansion starting in India, and enhancing its digital-first affiliate platform [2] Financial Performance - Adjusted earnings were 37 cents per share, down from 89 cents year-over-year, but above the Zacks Consensus Estimate of 29 cents [3] - Revenues totaled $488.6 million, a decrease of approximately 6% year-over-year, with a 1% negative impact from foreign currency fluctuations; Rhyz revenues grew by 101% [3] - Gross profit was $352.4 million, down from $374.5 million year-over-year, with a gross margin of 72.1%, slightly up from 71.7% [4] Regional Performance - Revenue declines were observed across various regions: Americas (-19%), South Korea (-22%), Europe & Africa (-18%), while Hong Kong/Taiwan saw a 5% increase [5] Other Financial Details - The company ended the quarter with cash and cash equivalents of $256.1 million and long-term debt of $478 million [6] - Nu Skin paid out dividends of $19.3 million during the quarter and has $162.4 million remaining under its share repurchase authorization [6] Guidance - For 2024, Nu Skin anticipates revenues between $1.73 billion and $1.87 billion, indicating a decline of 12-5% from the previous year [7] - The company expects adjusted EPS to range from 95 cents to $1.35, down from $1.85 in 2023 [8] - For Q1 2024, revenue expectations are between $400 million and $435 million, reflecting a decline of 17-10% year-over-year [8]

Company Performance - Nu Skin Enterprises (NUS) reported quarterly earnings of $0.37 per share, exceeding the Zacks Consensus Estimate of $0.29 per share, but down from $0.89 per share a year ago, indicating a 58.43% year-over-year decline [1] - The quarterly earnings surprise was 27.59%, while the previous quarter saw an earnings miss of -12.50% with actual earnings of $0.56 compared to an expected $0.64 [1] - Revenues for the quarter were $488.64 million, surpassing the Zacks Consensus Estimate by 1.94%, but down from $522.34 million year-over-year [1] Market Performance - Nu Skin shares have declined approximately 10.5% since the beginning of the year, contrasting with the S&P 500's gain of 3.8% [2] - The current consensus EPS estimate for the upcoming quarter is $0.34, with expected revenues of $490.01 million, and for the current fiscal year, the EPS estimate is $2.07 on revenues of $2.05 billion [4] Industry Outlook - The Cosmetics industry, to which Nu Skin belongs, is currently ranked in the bottom 39% of over 250 Zacks industries, suggesting potential challenges ahead [4] - Empirical research indicates a strong correlation between near-term stock movements and trends in earnings estimate revisions, which could impact Nu Skin's stock performance [3]

Financial Data and Key Metrics Changes - For 2023, the company generated revenue of $1.97 billion, with a negative foreign currency impact of 3% or $60 million [19] - Fourth quarter revenue was $488.6 million, exceeding previous guidance, with a negative foreign currency impact of 1% or $7.2 million [19] - Earnings per share for 2023 were $0.17, or $1.85 excluding restructuring and other charges, compared to $2.07 or $2.90 in the previous year [19] - Gross margin improved to 72.1% from 71.7%, with the core business gross margin at 77.4% compared to 74.9% in the prior year [20] - Operating margin for the fourth quarter was 3.3%, or 6.4% excluding restructuring and other charges, compared to 5.3% or 8.8% in the prior year [22] Business Line Data and Key Metrics Changes - The Rhyz business achieved over 100% growth, accounting for 13% of revenue in the fourth quarter [6][14] - The core Nu Skin business saw a gross margin improvement due to a strategic product portfolio rebalancing [20] - Selling expenses as a percentage of revenue decreased to 37.1% from 38.5% in the prior year, largely due to growth in the Rhyz segment [21] Market Data and Key Metrics Changes - The Americas, South Korea, Europe, and Southeast Asia faced challenges due to consumer spending shifts towards lower-priced goods [8] - Mainland China showed stabilization in the fourth quarter, aided by seasonal promotions, but ongoing economic challenges are anticipated [9] Company Strategy and Development Direction - The company is preparing to enter the $10 billion brain health market, focusing on holistic wellness solutions [7] - A new go-to-market model in Mainland China will be tested with Douyin, aiming to enhance market presence [9] - The company is rebalancing its capital allocation strategy to free up approximately $65 million annually for high-potential growth investments [12][24] Management Comments on Operating Environment and Future Outlook - Management acknowledged persistent macroeconomic pressures affecting consumer spending and customer acquisition globally [5] - The outlook for 2024 reflects continued macro challenges, but optimism remains for growth potential, particularly from the Rhyz segments [18][25] Other Important Information - The company plans to introduce new affordable luxury products targeting masstige customer segments [8] - A restructuring and cost efficiency program is expected to deliver annual savings of $40 million to $65 million before taxes [22] Q&A Session Summary Question: What was capital spending in 2023? - Capital spending in 2023 was $58 million [28] Question: What are the expected capital expenditures for 2024? - Estimated capital spending for 2024 is between $50 million and $60 million [30] Question: What are the priorities for the use of free cash flow under the new policy? - The priority is reinvestment in the business, focusing on Rhyz investments, growth prospects in India, and technology for the affiliate opportunity platform [32][33]