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]

Executive Summary - Nu Skin Enterprises Inc. reported Q4 2023 revenue of $488.6 million, a decrease of 6% year-over-year, slightly above guidance [1][3] - Full-year 2023 revenue was $1.97 billion, down 12% from 2022, with a foreign exchange impact of approximately 3% [1][5] - Rhyz revenue grew significantly, with Q4 2023 revenue at $65.1 million, a 101% increase, and full-year revenue at $216.6 million, a 41% increase [1][5] Financial Performance - Q4 2023 EPS was $0.15, or $0.37 excluding restructuring and other charges, compared to $1.15 or $0.89 in Q4 2022 [1][4] - Full-year 2023 EPS was $0.17, or $1.85 excluding inventory write-off and other charges, compared to $2.07 or $2.90 in 2022 [1][5] - Gross margin for Q4 2023 was 72.1%, slightly up from 71.7% in Q4 2022 [3] Customer and Affiliate Metrics - Total customers decreased by 15% year-over-year to 977,039 [1][19] - Paid affiliates decreased by 30% to 166,886, with a notable adjustment in eligibility requirements impacting the numbers [1][19] - Sales leaders decreased by 10% to 44,059 [1][19] Strategic Initiatives - The company is focusing on transforming its core business and investing in the Rhyz ecosystem to enhance long-term growth [2] - Plans include a new market expansion model starting in India anticipated in 2025 and building a digital-first affiliate opportunity platform [2] - The board declared a quarterly cash dividend of $0.06 per share, payable on March 6, 2024 [6] 2024 Outlook - Q1 2024 revenue is projected to be between $400 million and $435 million, reflecting a decline of 17% to 10% [5] - Full-year 2024 revenue guidance is set at $1.73 billion to $1.87 billion, with an expected foreign currency headwind of approximately 1% [5] - EPS for 2024 is expected to be between $0.75 and $1.15, or $0.95 to $1.35 on a non-GAAP basis [5][32]

Revenue and Financial Performance - Revenue in 2023 was $2.0 billion, primarily generated by the Nu Skin, Pharmanex, and ageLOC brands[9] - Rhyz companies contributed $216.6 million, or 11%, of the total revenue in 2023[10] - 26% of revenue came from the United States, with the remaining 74% from international markets[11] - Foreign-currency fluctuations negatively impacted revenue by 3% in 2023 compared to 2022[11] - Beauty products accounted for $858.6 million (43.6%) of revenue, while wellness products contributed $886.1 million (45.0%)[18] - ageLOC beauty products represented 46% of the beauty category revenue and 20% of total revenue in 2023[20] - ageLOC wellness products accounted for 46% of the wellness category revenue and 21% of total revenue in 2023[21] - Total Nu Skin revenue for 2023 was $1,752.5 million, a 20% decrease from 2022's $2,072.4 million[56] - Mainland China revenue for 2023 was $298.1 million, a 15% decrease from 2022's $360.4 million[56] - 74% of the company's sales in 2023 occurred in markets outside the United States, denominated in local currencies[186] - The company had $31.8 million in cash denominated in Chinese RMB and a $17.7 million intercompany receivable with its Argentina subsidiary as of December 31, 2023[187] Product Launches and Innovation - The company launched ageLOC LumiSpa iO and ageLOC WellSpa iO connected devices in 2023[13] - ageLOC TRMe personalized weight wellness line was launched in several markets in 2023, with plans for additional market launches in 2024[14] - Product launch process generates significant activity and high purchasing levels, resulting in higher-than-normal revenue increases during the quarter[54] - Sales of the ageLOC LumiSpa iO device in 2022 were below expectations, reflecting challenges in product acceptance[166] Digital Transformation and Social Commerce - The company is undergoing a significant digital transformation to achieve widespread adoption of social commerce, involving the development of new digital tools, apps, and an improved website design[31] - The digital transformation will require significant expenditures over the next several years and presents risks, including restrictions on multi-level marketing content by some social media platforms[32] - The company is undergoing a digital transformation to adopt social commerce, requiring significant expenditures over the next several years[168] Sales Force and Compensation - The company tracks Customers, Paid Affiliates, and Sales Leaders to monitor growth trends, with 977,039 Customers, 166,886 Paid Affiliates, and 44,059 Sales Leaders globally as of 2023[40] - The company's global sales compensation plan is considered one of the most generous in the direct selling industry, offering multi-level compensation for Sales Leaders[46] - Sales incentives, meetings, and recognition programs are key to motivating and training the sales force globally[52] - The company's sales force is composed of Brand Affiliates, who can earn money through retail markups and sales compensation under the global sales compensation plan[45] - Global sales compensation plan and Mainland China business model play a significant role in attracting and incentivizing the sales force, providing a competitive advantage[51] - The company had approximately 44,059 Sales Leaders as of December 31, 2023, with 294 occupying the highest levels under the global sales compensation plan[197] - In Mainland China, approximately 98 key Sales Leaders played a significant role in managing, training, and servicing the sales force[197] Regulatory and Compliance Challenges - Mainland China's regulatory environment is challenging, and the company is evaluating potential changes to its sales compensation structure, which could negatively impact sales[47] - Direct selling regulations in Mainland China limit sales compensation to 30% of revenue generated by independent direct sellers[62] - The FDA will implement the Modernization of Cosmetics Regulation Act of 2022 (MoCRA) in 2024, increasing regulatory burden for cosmetic manufacturers[67] - Mainland China's regulatory environment is complex, with restrictions on multi-level compensation and evolving direct selling regulations[60] - The company faces risks from government scrutiny and investigations in Mainland China, which have previously limited business operations[61] - The FDA prohibits certain ingredients in cosmetic products, and future restrictions on currently used ingredients could impact the company's product formulations[68] - The FDA has issued warning letters to cosmetic companies for improper structure/function claims, posing a risk of regulatory action or lawsuits for the company[69] - OTC drug products must comply with FDA monographs or require an approved NDA, potentially requiring reformulation or cessation of marketing if non-compliant[70] - In Mainland China, the product registration process for cosmetics can take 3-6 months for general cosmetics and over 2 years for special cosmetics[71] - The FDA Food Safety Modernization Act (FSMA) enhances food safety regulations, including mandatory recalls and stricter import requirements for food and dietary supplements[73] - Dietary supplements in the U.S. are regulated under DSHEA, requiring notification of structure/function claims to the FDA before marketing[74] - New dietary ingredients not marketed before October 15, 1994, require FDA notification and evidence of safety, with a 75-day pre-marketing submission period[75] - In Mainland China, health food product registration can take over 4 years, and marketing general foods without health claims carries regulatory risks[77] - The FDA's good manufacturing practices (GMP) regulations increase compliance costs and require rigorous quality control for dietary supplements and food products[81] - Advertising and product claims for dietary supplements in the U.S. must be substantiated and cannot imply disease treatment or prevention without FDA approval[83] - The FTC sent notices of penalty offense to nearly 700 companies, including the company, in 2023 regarding substantiation for product claims[89] - South Korea imposes a sales compensation limit of 35% of the total price of goods or services supplied[143] - The FTC issued warnings to over 1,100 companies, including the company, regarding unfair or deceptive practices related to earnings claims and endorsements[133] - Social media platforms like TikTok, WhatsApp, Pinterest, and Facebook prohibit or restrict content related to multi-level marketing, impacting the company's sales force promotion efforts[136] - The U.S. Department of Labor adopted a regulation in January 2024 that could reclassify more workers as employees, potentially impacting the company's sales force structure[146] - The company has been required to modify its sales compensation plans in markets like South Korea and Vietnam to comply with local regulations, which has negatively impacted sales force morale[142] - Mainland China's regulatory environment remains challenging, with increased government scrutiny and inspections since 2019[150] - The company faces risks of fines, suspensions, or license terminations in Mainland China if its operations or sales force activities are deemed non-compliant with local regulations[152] - Mainland China's regulatory environment imposes significant restrictions on direct selling, including prohibitions on multi-level compensation and overseas personnel participation[155] - Regulatory scrutiny in Mainland China has halted new direct selling licenses since early 2019, impacting expansion plans[160][161] - Product registration in Mainland China for health foods takes a minimum of two years, delaying new product launches[163] - Direct selling in Mainland China is limited to specific product categories like cosmetics, health foods, and household appliances[164] Manufacturing and Supply Chain - Manufacturing subsidiaries and third-party suppliers accounted for 23% and 77% of product sourcing, respectively, in 2023[27] - Production difficulties and quality control issues have led to stock outages and inventory write-downs, impacting sales[198] - Reliance on sole suppliers for key products like ageLOC Galvanic Facial Spa and Nu Skin Facial Spa devices poses risks if contracts are not maintained[199] - Supply shortages or price increases for unique natural ingredients in products like ageLOC Meta and ageLOC Youth could harm revenue[199] - Disruptions in manufacturing, supply chain, and distribution operations could significantly affect the company's business[200] - Climate change impacts, including extreme weather and rising costs, may disrupt production and sourcing of components[201] - Transportation channel disruptions, such as port congestion and increased fuel expenses, have raised shipping costs and reduced profitability[204] - Manufacturing facilities face regulatory risks, including labor and environmental regulations, which could result in financial penalties[205] - Product launch challenges, including forecasting difficulties and supply chain pressures, may negatively impact sales and revenue[206] Market and Geographic Segments - Nu Skin operates in nearly 50 markets, divided into seven segments: Mainland China, South Korea, Southeast Asia/Pacific, Americas, Japan, Hong Kong/Taiwan, and Europe & Africa[55] - In Mainland China, the company utilizes a unique business model involving retail stores, sales employees, independent direct sellers, and independent marketers, differing from other markets[34][48] - The company operates a cross-border e-commerce platform in Mainland China, selling products like ageLOC Meta and ageLOC Youth, which are not registered for direct selling[157] - Mainland China's e-commerce platform allows sales force members to promote and refer customers, earning a promotion bonus separate from direct selling compensation[158] - The company faced a significant negative impact on revenue and the number of Sales Leaders and Customers in Mainland China due to adverse publicity and government actions in 2014[130] - Japan's strict regulatory requirements and consumer complaints have led to ongoing scrutiny of the company's Brand Affiliates[131] - The ongoing conflict in Russia and Ukraine has caused distraction to the company's sales force[183] - Sales Leaders in Mainland China declined by 32% from December 31, 2021 to December 31, 2022 due to COVID-related pressures[193] Human Capital and Diversity - The company had approximately 3,700 full- and part-time employees worldwide as of December 31, 2023, excluding approximately 11,500 sales employees in Mainland China[100] - The company's human capital strategy includes a "Best You" wellness program, leadership training, and global employee experience surveys every six months[102][105] - The company's Diversity, Equity, and Inclusion initiatives include employee resource groups and training to address unintentional biases in hiring[103][104] Leadership and Governance - Steven J. Lund has served as Executive Chairman of the board since 2012 and previously held roles including President and CEO from 1996 to 2003[111] - Ryan S. Napierski has been President since 2017 and CEO since 2021, with prior roles including President of Global Sales and Operations and President of Nu Skin Japan[112] - James D. Thomas was appointed CFO in July 2023, having served as Interim CFO since March 2023 and as Chief Accounting Officer since 2019[113] - Chayce D. Clark has been Executive Vice President and General Counsel since 2021, joining the company in 2015 as Assistant General Counsel[114] - Steven K. Hatchett became Executive Vice President and Chief Product Officer in 2022, having joined the company in 2018 as Senior Vice President of Global Manufacturing[115] Risks and Challenges - Risks associated with direct selling include challenges to the network marketing system, regulatory scrutiny, and potential harm from improper sales force actions[117] - Operations in Mainland China face risks from government scrutiny, regulatory changes, and challenges in obtaining necessary approvals[117] - The company is exposed to risks from epidemics, international market conditions, and competition, which could negatively impact business performance[117] - Manufacturing and operational risks include production difficulties, supply chain disruptions, and challenges in managing growth[118] - Legal and regulatory risks include potential product liability claims, non-compliance with anti-corruption laws, and changes in tax and customs laws[118] - The company faces risks from foreign-currency fluctuations, with a strengthening U.S. dollar potentially reducing reported revenue, gross profit, and net income[186] - High inflation and currency devaluations in international markets could negatively impact the company's balance sheet and results of operations[188] - The company is exposed to risks from currency controls, which could limit the timing and amount of cash repatriation[187] - The company's sales force productivity was negatively impacted by COVID-19, including travel restrictions and supply chain interruptions[180] - Inflation and economic challenges in Mainland China negatively impacted 2022 and 2023 sales, with potential continued effects in 2024[170] - The company faces intense competition from direct selling, affiliate marketing, and gig economy companies, with AI adoption becoming a critical factor[172][173] Product Registration and Medical Devices - The company's Nu Skin Facial Spa and RenuSpa iO devices were cleared for marketing through the FDA's 510(k) process as medical devices with cosmetic benefits[91] - The company registered ageLOC Boost as a medical device in Thailand and is seeking medical device registration for Nu Skin WellSpa iO in Thailand[93] - The company's Pharmanex BioPhotonic Scanner, ageLOC LumiSpa, and other devices are registered as "health care equipment" or "household appliances" in Mainland China[94] Rhyz Companies and Segments - Rhyz companies generated $216.6 million, or 11% of the company's 2023 reported revenue (excluding sales to the core Nu Skin business)[99] - The company's Rhyz Manufacturing Segment includes Elevate Nutraceuticals, 3i Solutions, CasePak, and Wasatch Product Development[98] - The company's Rhyz Other Segment includes Beauty Biosciences, LifeDNA, and Mavely, focusing on digital and retail channels, DNA assessment, and social commerce[99]