Core Viewpoint - Nu Skin Enterprises, Inc. is facing challenges in customer and affiliate acquisition due to a tough macroeconomic environment and volatile foreign currency movements, which are expected to persist into 2024 [1][2] Financial Projections - For 2024, Nu Skin anticipates revenues between $1.73 billion and $1.87 billion, indicating a decline of 12% to 5% from the previous year [2] - The company expects adjusted EPS to be between 95 cents and $1.35, down from $1.85 in 2023 [2] - For Q2 2024, revenues are projected to be between $420 million and $455 million, reflecting a decline of 16% to 9% year-over-year [2] - Adjusted earnings for Q2 are expected to be between 10 and 20 cents per share, compared to 54 cents in the same period last year [2] Strategic Initiatives - Nu Skin is implementing its Nu Vision 2025 strategy to become a leading integrated beauty and wellness company, focusing on personalized beauty and wellness through the EmpowerMe strategy and a digital platform [3] - The EmpowerMe strategy aims to enhance product consumption and attract new customers and affiliates, thereby increasing recurring revenues and lifetime value [3] Product Innovation - The company is launching innovative beauty devices, contributing to its growth, with successful products like ageLOC WellSpa iO and Mind 360 targeting the brain health market [4] - Nu Skin plans to enter the Indian market, which is a rapidly growing direct-selling market, to strengthen its customer base [4] Rhyz Business Growth - The Rhyz business is a key component of Nu Skin's strategy, showing nearly 60% revenue growth in Q1 2024 and accounting for 15% of total revenues, with expectations to reach 20% to 25% by 2025 [5][6] Market Position and Valuation - Nu Skin's shares have decreased by 11.5% over the past three months, while the industry has seen a decline of 19.5% [7] - The company's forward 12-month price-to-earnings ratio is 8.49, significantly lower than the industry average of 24.62 and the S&P 500's 21.91, indicating potential undervaluation [7] - Nu Skin holds a Value Score of A, suggesting strong potential for price appreciation based on fundamental metrics [7]

Core Viewpoint - Nu Skin Enterprises, Inc. is facing significant challenges due to persistent macroeconomic headwinds, impacting customer and affiliate acquisition, and leading to a negative outlook for 2024 [1][2][4]. Macroeconomic Challenges - The company has been affected by inflationary pressures on consumer spending for premium products, resulting in a 13.3% year-over-year decline in quarterly revenues to $417.3 million [2]. - On a constant-currency basis, revenues fell by 9.5%, with sales leaders down 12% year over year to 38,609, and the customer base dropping 19% to 875,261 [2]. - Paid affiliates decreased by 30% to 154,171, with an adjusted basis showing a 14% decline [2]. Currency Impact - Nu Skin's revenues in the first quarter of 2024 were adversely affected by foreign currency fluctuations, which had a negative impact of 3.8% [3]. - The company anticipates unfavorable foreign currency impacts of 2-3% on 2024 revenues and 4-3% on second-quarter revenues [3]. Future Outlook - Management expects macroeconomic hurdles to persist, reaffirming a negative outlook for 2024 with projected revenues between $1.73 billion and $1.87 billion, indicating a decline of 12-5% from the previous year [4][5]. - Adjusted EPS is expected to be between 95 cents and $1.35, down from $1.85 in 2023 [5]. - For the second quarter of 2024, revenues are projected to be between $420 million and $455 million, reflecting a decline of 16% to 9% year-over-year [5]. - Adjusted earnings for the second quarter are expected to be between 10-20 cents per share, compared to 54 cents in the same period last year [5]. Stock Performance - Nu Skin's shares have decreased by 38.5% over the past six months, contrasting with the industry's decline of 17.4% [5].

Core Viewpoint - Nu Skin Enterprises reported a decline in both revenue and earnings for Q1 2024, primarily impacted by foreign currency fluctuations, while managing costs effectively to support its bottom line [2][5]. Financial Performance - Adjusted earnings were 9 cents per share, down from 37 cents year-over-year, but exceeded the Zacks Consensus Estimate of 5 cents [2]. - Revenues totaled $417.3 million, a 13.3% decline year-over-year, missing the Zacks Consensus Estimate of $431 million, with a negative impact of 3.8% from foreign currency [2][3]. - Gross profit decreased to $294.1 million, with a gross margin of 70.5%, down from 72.3% in the previous year [3]. Customer and Sales Metrics - Sales leaders decreased by 12% to 38,609, while the customer base fell by 19% to 875,261 [3]. - Paid affiliates dropped by 30% to 154,171, with an adjusted decline of 14% [3]. Cost Management - Selling expenses reduced to $153.5 million from $188.1 million, representing 36.8% of revenues, down from 39.1% [3]. - General and administrative expenses decreased to $124.6 million, accounting for 29.9% of revenues, up from 27.8% [4]. Regional Revenue Performance - Revenue declines were noted across various regions, with the Americas down 20.1% and Mainland China down 39.3% [4]. - Other revenues surged by 684.3% year-over-year [4]. Financial Position and Guidance - Cash and cash equivalents stood at $212.5 million, with long-term debt of $453.2 million and total stockholders' equity of $810.2 million [5]. - For 2024, Nu Skin anticipates revenues between $1.73 billion and $1.87 billion, indicating a 12-5% decline from the previous year [6]. - Adjusted EPS guidance for 2024 is set between 95 cents and $1.35, down from $1.85 in 2023 [7]. Estimate Trends - There has been a downward trend in consensus estimates, with a significant shift of -52.7% noted [8][10]. Industry Comparison - Nu Skin operates within the Zacks Cosmetics industry, where competitor Helen of Troy reported a slight revenue increase of 1% in its latest quarter [11].

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Core Viewpoint - Nu Skin Enterprises, Inc. reported a decline in both revenue and earnings for the first quarter of 2024, with revenues missing the Zacks Consensus Estimate due to significant foreign currency headwinds, although cost management efforts positively impacted the bottom line [1][2]. Financial Performance - Adjusted earnings were 9 cents per share, down from 37 cents in the prior year, but exceeded the Zacks Consensus Estimate of 5 cents [2]. - Revenues totaled $417.3 million, a 13.3% year-over-year decline, with a 3.8% negative impact from foreign currency fluctuations; on a constant currency basis, revenues fell 9.5% [2]. - Rhyz revenues grew approximately 60% year-over-year, while overall revenues fell short of the Zacks Consensus Estimate of $431 million [2]. - Sales leaders decreased by 12% to 38,609, customer base dropped 19% to 875,261, and paid affiliates fell 30% to 154,171 [2]. Profitability Metrics - Gross profit was $294.1 million, down from $347.9 million year-over-year, with a gross margin of 70.5%, down from 72.3% [3]. - Selling expenses decreased to $153.5 million from $188.1 million, representing 36.8% of revenues, down from 39.1% [3]. - General and administrative expenses were $124.6 million, down from $133.9 million, accounting for 29.9% of revenues, up from 27.8% [3]. - Adjusted operating margin contracted by 160 basis points to 3.8% [4]. Regional Performance - Revenue declines by region (at constant currency) included 20.1% in the Americas, 6.1% in Mainland China, 8.1% in Southeast Asia/Pacific, 5.6% in Japan, 11.8% in Europe & Africa, 39.3% in South Korea, and 9.8% in Hong Kong/Taiwan; however, other revenues surged by 684.3% year-over-year [5]. Financial Position - At the end of the quarter, cash and cash equivalents were $212.5 million, long-term debt was $453.2 million, and total stockholders' equity was $810.2 million [6]. - The company paid out $3 million in dividends and has $162.4 million remaining under the current share repurchase authorization [6]. Guidance - For 2024, Nu Skin anticipates revenues between $1.73 billion and $1.87 billion, indicating a 12-5% decline from the previous year, with expected foreign currency impacts of 3-2% [7]. - Adjusted EPS is projected to be between 95 cents and $1.35, down from $1.85 in 2023; reported earnings are expected to range from 77 cents to $1.16 per share compared to 17 cents in 2023 [7]. - For Q2 2024, revenue expectations are between $420 million and $455 million, reflecting a decline of 16% to 9% year-over-year, with adjusted earnings projected at 10-20 cents per share [8].

Financial Data and Key Metrics Changes - Revenue for Q1 2024 was $417.3 million, at the midpoint of guidance, with a negative foreign currency impact of 3.8% or $18.2 million [14][18] - Reported earnings were negative $0.01 or $0.09 excluding restructuring charges, with a gross margin of 70.5%, down from 72.3% in the prior year [14][15] - Cash flow from operations improved to $3.3 million compared to a cash outflow of $22.1 million in the same period last year [17] Business Line Data and Key Metrics Changes - Rhyz business revenues increased by 57% to over $62 million, accounting for approximately 15% of total enterprise revenue [5][12] - Core Nu Skin business saw new product innovations contributing approximately $42 million to Q1 revenue [5] - Selling expense as a percentage of revenue decreased to 36.8% from 39.1% in the prior year [15] Market Data and Key Metrics Changes - Positive trends were noted in Europe and Africa, particularly for the Ageloc Trme product, while challenges persisted in South Korea and Japan due to negative consumer sentiment and FX pressures [6][7] - The Americas region faced pressures in the subscription business, particularly in North America, and adjustments were being made in Latin America [6][7] Company Strategy and Development Direction - The company is focused on channel activation and has introduced new incentives to energize the sales force [9][12] - Plans to enter the Indian market with a digital-first approach are underway, targeting a market opening in 2025 [10][12] - The introduction of Mind 360, targeting the cognitive health market, is a key part of the company's strategy moving forward [8][12] Management's Comments on Operating Environment and Future Outlook - Management acknowledged macroeconomic challenges, including inflationary pressures affecting consumer spending [6][42] - Despite these challenges, the company remains committed to its long-term vision of becoming a leading integrated beauty and wellness ecosystem [12][13] - The company is maintaining its 2024 revenue guidance in the range of $1.73 billion to $1.87 billion [18] Other Important Information - The company is implementing a SKU optimization plan to eliminate 25% to 30% of SKUs by the end of 2025 [13][30] - A focus on sustainable packaging and product delivery forms is part of the Mind 360 product line launch [53] Q&A Session Summary Question: Expectations for the remainder of the year and confidence in second half improvement - Management highlighted channel activation plans and new product launches as key drivers for expected improvement in the second half [21][23] Question: Details on affordable luxury innovation and product categories - The company is expanding its portfolio to include affordable luxury products priced between $10 to $30, while also reducing SKUs [25][26] Question: Cost savings and areas for further savings opportunities - Management discussed SKU rationalization and a rigorous approach to discounts and promotions as key areas for cost savings [29][30] Question: Insights on macro pressure and spending behavior - Management noted that while luxury goods are performing well, inflation is impacting consumer spending decisions [40][42] Question: Update on BeautyBio acquisition and its impact - The acquisition is providing unique IP and insights into omni-channel approaches, particularly in influencer marketing [46][48] Question: Clarification on Mind 360 product line - Mind 360 will offer a holistic approach to cognitive health, with products in various forms including supplements and gummies [51][53]

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]