Core Viewpoint - Nu Skin Enterprises, Inc. (NUS) is expected to report a decline in both revenue and earnings for the fourth quarter of 2023, with significant year-over-year decreases anticipated [1][3]. Revenue Summary - The Zacks Consensus Estimate for fourth-quarter revenues is $479.4 million, reflecting an 8.2% decrease from the same quarter last year [1]. - For the full year 2023, revenues are projected to be nearly $2 billion, indicating an 11.9% decline compared to the previous year [1][3]. - Management anticipates fourth-quarter revenues between $440 million and $480 million, suggesting a decline of 8-16%, including a negative foreign currency impact of 3-2% [3]. Earnings Summary - The consensus estimate for quarterly earnings is 29 cents per share, representing a 67.4% decline from the prior-year quarter [1]. - For 2023, the earnings estimate is $1.76 per share, indicating a drop of 39.3% from the previous year's level [1]. - Management expects adjusted EPS for the fourth quarter to be between 15 and 30 cents, which also suggests a year-over-year decline [3]. Performance Metrics - Nu Skin has a trailing four-quarter earnings surprise of 17.4% on average, but it reported a negative earnings surprise of 12.5% in the last quarter [2]. - The company is currently ranked 3 (Hold) by Zacks and has an Earnings ESP of -17.24%, indicating low odds for an earnings beat this time [4]. Influencing Factors - Persistent macroeconomic challenges are affecting consumer spending and customer acquisition, negatively impacting Nu Skin's core business [3]. - The company is implementing cost-control measures to support its profitability amidst these challenges [4].

Core Viewpoint - The market anticipates a year-over-year decline in Nu Skin Enterprises' earnings due to lower revenues, with the earnings report expected on February 14, 2024, being crucial for stock price movement [1] Group 1: Earnings Expectations - Nu Skin is projected to report quarterly earnings of $0.29 per share, reflecting a year-over-year decrease of 67.4% [2] - Expected revenues for the quarter are $479.35 million, down 8.2% from the same quarter last year [2] Group 2: Estimate Revisions - The consensus EPS estimate has been revised 1.52% higher in the last 30 days, indicating a reassessment by analysts [3] - The Most Accurate Estimate for Nu Skin is lower than the Zacks Consensus Estimate, resulting in an Earnings ESP of -17.24%, suggesting a bearish outlook from analysts [6] Group 3: Earnings Surprise Prediction - The Zacks Earnings ESP model indicates that a positive Earnings ESP is a strong predictor of an earnings beat, particularly when combined with a Zacks Rank of 1, 2, or 3 [5] - Nu Skin currently holds a Zacks Rank of 3, making it challenging to predict a beat on the consensus EPS estimate [6][7] Group 4: Historical Performance - In the last reported quarter, Nu Skin was expected to post earnings of $0.64 per share but delivered only $0.56, resulting in a surprise of -12.50% [8] - Over the past four quarters, Nu Skin has beaten consensus EPS estimates three times [8] Group 5: Conclusion - An earnings beat or miss may not solely dictate stock movement, as other factors can influence investor sentiment [9] - Nu Skin does not appear to be a compelling candidate for an earnings beat, and investors should consider additional factors before making decisions [9]

Core Viewpoint - Nu Skin Enterprises, Inc. (NUS) is advancing its Nu Vision 2025 strategy to become a leading integrated beauty and wellness company, leveraging technology and product programs to capture market share despite facing macroeconomic challenges [1][6]. Product Launches - NUS is launching innovative beauty devices, including the ageLOC TRMe personalized weight management system and ageLOC WellSpa iO, enhancing its growth strategy [2]. - The company has successfully introduced its Vera and Stela apps across all markets, further solidifying its position in the beauty device sector [2]. Strategic Initiatives - The Nu Vision 2025 strategy focuses on personalized beauty and wellness, social commerce, and digital platform expansion, aiming to improve customer engagement and recurring revenues [4][5]. - The EmpowerMe strategy is designed to empower affiliates, enhance product consumption, and increase customer lifetime value [4]. Operational Developments - NUS is implementing cost-control measures and has acquired BeautyBio, a clean skincare and beauty device brand, to strengthen its market position [3]. - The company has launched Equinox, a new global e-commerce platform in North America, expected to enhance customer experience and operational efficiency [5]. Market Challenges - NUS is facing persistent macroeconomic obstacles that have negatively impacted consumer spending and customer acquisition, particularly in Mainland China and the Americas [6]. - The company's stock has decreased by 3.4% over the past three months, contrasting with the industry's 3.2% growth [6].

Q3 2023 Important Information Regarding Forward-Looking Statements:This presentation 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, stateme ...

Financial Data and Key Metrics Changes - In Q3 2023, the company reported revenue of $499 million and non-GAAP earnings per share of $0.56, excluding a strategic inventory write-down [5][18] - The revenue was impacted by a negative foreign currency effect of 1.5%, equating to $8.1 million [18] - The gross margin was reported at 58.6%, or 71.8% when excluding the inventory charge, compared to 61.8% for the core Nu Skin business [19][20] Business Line Data and Key Metrics Changes - The Rhyz segments experienced over 40% year-over-year growth and now account for 12% of total business, with expectations to grow to 20% to 25% in the next two years [12] - The introduction of ageLOC WellSpa iO contributed to notable gains in Japan, Hong Kong, Taiwan, and Europe [5] - Selling expenses as a percentage of revenue decreased to 37.6%, largely due to growth in the Rhyz manufacturing segment [20] Market Data and Key Metrics Changes - The company faced significant challenges in Mainland China, where consumer spending slowed, impacting overall sales [5][4] - In the Americas, prolonged inflation has led to a more cautious and price-sensitive consumer [5] - Growth was noted in Southeast Asia Pacific and South Korea segments, partially offsetting challenges in other regions [5] Company Strategy and Development Direction - The company is focusing on three strategic imperatives: EmpowerMe personalization, social commerce, and digital ecosystem [7] - A strategic global realignment of the product portfolio is planned, with an anticipated elimination of 20% to 30% of non-strategic SKUs over the next 12 to 18 months [16] - The company aims to enhance its connected device roadmap, targeting 30% of revenue from connected devices by 2025 [8] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the macro-environmental headwinds impacting consumers globally and indicated a cautious outlook for the near term [4][13] - The company plans to introduce a new mental wellness category in 2024, reflecting strategic investments made in recent years [13] - Management emphasized the importance of simplifying the business to focus on core value drivers and enhancing operational efficiency [14][16] Other Important Information - The company announced a $65.7 million inventory write-off to optimize its product portfolio [18][19] - General and administrative expenses declined by $7 million year-over-year, reflecting prudent expense management [21] - The company maintained a strong balance sheet and financial prudence, ensuring the ability to invest in the business while returning value to shareholders [17] Q&A Session Summary Question: Impact of weakening Chinese consumer on product launches - Management noted that the weakening consumer sentiment in China has led to a more cost-conscious approach, with plans to focus on lower-priced products [26][27] Question: Changes in promotional strategies in China - Management confirmed that promotions are critical to the strategy, especially in response to the price-sensitive consumer environment [29][30] Question: Growth rates in the beauty market - Management indicated that mass consumer goods are performing well, while luxury segments face pressure, but they remain optimistic about the long-term potential of beauty devices [32][33] Question: Long-term outlook for China - Management expressed confidence in the long-term potential of the Chinese market, particularly in second and third-tier cities, despite current challenges [36][38] Question: Changes in go-to-market strategy in China - Management acknowledged that the go-to-market strategy has been less progressive in China compared to other markets due to macroeconomic challenges [39][41] Question: Inflation impact on 2024 outlook - Management is monitoring inflationary pressures and their impact on pricing and operating margins, with a cautious outlook for 2024 [42][43]

Revenue Performance - Revenue for Q3 2023 decreased 7% to $498.8 million, compared to $537.8 million in Q3 2022, and for the first nine months of 2023, revenue decreased 13% to $1.5 billion from $1.7 billion in the prior-year period[99]. - The decline in revenue was primarily driven by macroeconomic pressures affecting consumer spending and customer acquisition, with Customers, Paid Affiliates, and Sales Leaders declining 21%, 23%, and 6% year-over-year, respectively[99][100]. - Revenue from the Americas segment decreased 30% in Q3 2023 to $91.7 million, while the Asia/Pacific segment saw an 18% decline to $68.7 million[104]. - Total Nu Skin revenue for Q3 2023 was $498.8 million, a 7% decrease, while total revenue for the first nine months was $1.48 billion, down 13%[104]. - Mainland China revenue was negatively impacted by 6% due to unfavorable foreign currency fluctuations, despite a year-over-year increase in sales leaders and paid affiliates[114]. - Southeast Asia/Pacific reported a significant decline in revenue, with ageLOC Meta generating $17.1 million in the first nine months of 2023, down from $40.3 million in the same period of 2022[116]. Earnings and Profitability - Earnings per share for Q3 2023 decreased 45% to $(0.74), compared to $(0.51) in Q3 2022, and for the first nine months, it decreased 97% to $0.03 from $0.94[101]. - The third quarter of 2023 included an inventory write-off charge of $65.7 million, contributing to the decline in earnings per share[101]. - Gross profit as a percentage of revenue fell to 58.6% for the third quarter of 2023, down from 67.7% in the prior-year period[127]. - In Q3 2023, the company reported a net loss of $37.0 million, compared to a net loss of $25.4 million in Q3 2022[135]. - For the first nine months of 2023, net income was $1.3 million, a significant decrease from $47.6 million in the same period of 2022[135]. - The effective tax rate for Q3 2023 was (7.3)%, compared to 12.3% in Q3 2022, reflecting a decline in profitability[134]. Customer Metrics - Total customers decreased by 21% year-over-year to 978,907 in September 2023, down from 1,239,384 in September 2022[110]. - The number of Customers, Paid Affiliates, and Sales Leaders declined significantly, impacting overall business performance[108][109]. - The Americas segment experienced a decline in revenue, customers, paid affiliates, and sales leaders due to macroeconomic challenges, with a 27% decrease in customers[112]. - South Korea's paid affiliates decreased by approximately 17,000 due to changes in eligibility requirements for rewards[117]. Product Performance - The new product ageLOC TRMe generated approximately $30.2 million in revenue for Q3 2023 and $66.3 million for the first nine months, while ageLOC WellSpa iO generated $35.6 million in Q3 2023[100]. - The Manufacturing segment under Rhyz Investments reported a 20% increase in revenue for Q3 2023 to $49.7 million, while Rhyz other segment revenue surged 1,910% to $10.8 million[104]. - The Manufacturing segment revenue increased by 20% for the third quarter of 2023, driven by new customer onboarding and automation efforts[123]. Cash Flow and Expenditures - The company generated $64.5 million in cash from operations in the first nine months of 2023, down from $82.5 million in the prior-year period[136]. - As of September 30, 2023, cash and cash equivalents were $250.0 million, a decrease from $278.5 million as of December 31, 2022[136]. - Capital expenditures for the nine months ended September 30, 2023, were $38.1 million, with an estimated total of $50–60 million for the year[138]. - The new manufacturing plant in Mainland China is expected to begin production in Q4 2023, with total expenditures for the project projected at approximately $60 million[138]. Strategic Initiatives - The company plans to continue launching new products in Q4 2023, with previews in Mainland China for ageLOC TRMe and ageLOC WellSpa iO[100]. - The company expects total charges of approximately $15–$25 million in severance costs for the fourth quarter of 2023 as part of its strategic plan[131]. Foreign Currency and Market Risks - A significant portion of the company's revenue and expenses are recognized outside of the United States, with local currencies considered the functional currency for most subsidiaries[154]. - The subsidiary in Argentina adopted highly inflationary accounting as of July 1, 2018, with net sales from Argentina being less than 2% of consolidated net sales for the three- and nine-month periods ended September 30, 2023 and 2022[155]. - The company does not use derivative financial instruments for trading or speculative purposes and regularly monitors foreign currency risks[156]. - The company continues to evaluate its foreign currency hedging policy to reduce exposure to fluctuations in foreign currency exchange rates[156]. - A weakening of the U.S. dollar positively impacts reported revenue and earnings, while a strengthening negatively impacts them[154]. - The uncertainty of exchange rate fluctuations makes it difficult to predict their effect on future business and financial condition[154].

Financial Data and Key Metrics Changes - In Q2 2023, the company reported revenue of $500.3 million and earnings per share (EPS) of $0.54, both in line with guidance and reflecting an 8% year-over-year growth in Mainland China [5][17] - The gross margin for Q2 was 72.9%, down 70 basis points year-over-year, while the operating margin was 8.5%, compared to 9.2% in the prior year [17] - The company anticipates Q3 2023 revenue between $500 million and $540 million, with EPS guidance of $0.54 to $0.69 [20] Business Line Data and Key Metrics Changes - The growth in China was offset by softness in other markets, particularly in Southeast Asia Pacific, Europe, Africa, and Latin America, due to macroeconomic pressures [6] - The Americas and South Korea launched new products, but performance was below expectations due to declines in channel dynamics [7] - The RISE ecosystem reported a 33% year-over-year growth, indicating strong performance in manufacturing [12] Market Data and Key Metrics Changes - The company experienced a negative foreign currency impact of 3% or $16.4 million in Q2 [17] - The Americas and South Korea markets faced challenges in customer acquisition due to aggressive price increases [6] Company Strategy and Development Direction - The company is focused on its multiyear transformation, "Nu Vision 2025," aiming to become a leading integrated beauty and wellness company [4] - Key initiatives include the launch of the ageLOC WellSpa iO device and the EmpowerStart program to enhance affiliate-powered social commerce [8][9] - The acquisition of BeautyBio and a majority stake in Life DNA reflects the company's commitment to personalization and innovation in the beauty and wellness space [13][14] Management's Comments on Operating Environment and Future Outlook - Management remains cautiously optimistic about growth in China, citing positive trends in affiliate counts and product uptake [5][26] - The company acknowledges ongoing macroeconomic challenges but believes future opportunities will expand as strategic investments are made [20][21] Other Important Information - The company is implementing a new e-commerce platform, Equinox, to enhance operational efficiencies and customer experience [11] - Adjustments to eligibility requirements for rewards among paid affiliates are being made to focus on those actively building a consumer base [10] Q&A Session Summary Question: Insights on the BeautyBio acquisition - Management highlighted the strategic importance of BeautyBio's IP and capabilities, with expected revenue uplift of $10 million to $15 million in the second half of the year [24][25] Question: Growth in China and affiliate count - Management expressed cautious optimism regarding growth in China, attributing it to improved channel dynamics and product uptake [26][27] Question: Full year guidance adjustments - The company adjusted its guidance due to stronger-than-expected foreign currency impacts and macroeconomic evaluations [29][30] Question: Factors for expected growth in Q4 - Key factors include positive trends in China and the anticipated impact of the WellSpa iO product launch [34][35] Question: U.S. consumer behavior changes - Management noted trade-off decisions among U.S. consumers, impacting higher-end product sales [41][42] Question: Distribution strategy for BeautyBio - BeautyBio operates independently and is not a direct seller; the company plans to explore synergies without full integration [49][50] Question: TRMe product launch status - The TRMe product is rolling out market by market, with a cautious approach to the U.S. market due to competitive dynamics [55][56]

Revenue Performance - Revenue for Q2 2023 decreased 11% to $500.3 million, compared to $560.6 million in Q2 2022, and for the first half of 2023, revenue decreased 16% to $1.0 billion from $1.2 billion in the prior year[96]. - Revenue from the Americas segment decreased 14% to $107.6 million in Q2 2023, while the Mainland China segment reported a 2% increase to $88.4 million[101]. - The Southeast Asia/Pacific segment saw a significant decline of 32% in Q2 2023, with revenue of $63.8 million[101]. - The total revenue for the first half of 2023 was $981.7 million, down 16% from $1.165 billion in the same period last year[101]. - Revenue for the second quarter of 2023 decreased by 11% to $500.3 million, compared to $560.6 million in the prior-year period[122]. Customer Metrics - The number of Customers, Paid Affiliates, and Sales Leaders declined by 25%, 23%, and 9% year-over-year, respectively[96]. - Total customers decreased by 25% year-over-year to 1,041,118 as of June 30, 2023, down from 1,380,615 in the prior year[106]. - Paid affiliates decreased by 23% year-over-year to 187,652, down from 242,133[106]. Earnings and Profitability - Earnings per share for Q2 2023 decreased 19% to $0.54, and for the first half of 2023, it decreased 47% to $0.76, primarily due to revenue decline and $9.8 million in restructuring charges[98]. - In Q2 2023, net income was $26.9 million, down from $34.2 million in Q2 2022, and for the first six months of 2023, net income was $38.3 million compared to $73.0 million in the same period of 2022[130]. - Gross profit as a percentage of revenue was 72.9% for the second quarter of 2023, down from 73.6% in the prior-year period[123]. Expenses and Charges - General and administrative expenses decreased to $137.0 million in the second quarter of 2023, compared to $141.6 million in the prior-year period[126]. - Selling expenses as a percentage of revenue decreased to 37.0% for the second quarter of 2023, down from 39.1% in the prior-year period[124]. - The company incurred total restructuring charges of approximately $53.3 million in 2022, with cash charges of $40.8 million and non-cash charges of $12.5 million[127]. Cash Flow and Capital Expenditures - Cash from operations in the first six months of 2023 was $13.4 million, a significant decrease from $54.1 million in the prior-year period, primarily due to an $18.5 million increase in inventory[131]. - As of June 30, 2023, cash and cash equivalents were $252.3 million, down from $278.5 million as of December 31, 2022, driven by dividend payments and capital expenditures[131]. - Working capital decreased to $347.5 million as of June 30, 2023, from $400.6 million as of December 31, 2022, mainly due to acquisitions of BeautyBio and LifeDNA[132]. - Capital expenditures for the first half of 2023 were $26.2 million, with an estimated total of $55–75 million planned for the year, including a new manufacturing plant in Mainland China[133]. Foreign Currency and Market Risks - The company regularly monitors foreign currency risks and takes measures to reduce the impact of foreign exchange fluctuations on operating results[150]. - A significant portion of the company's revenue and expenses are recognized outside of the United States, impacting reported revenue and earnings based on U.S. dollar fluctuations[148]. - The company’s reported revenue and earnings will be positively impacted by a weakening of the U.S. dollar and negatively impacted by a strengthening of the U.S. dollar[148]. - The functional currency for the subsidiary in Argentina became the U.S. dollar due to highly inflationary accounting adopted as of July 1, 2018[149]. Strategic Initiatives - The launch of ageLOC TRMe generated approximately $12.7 million in revenue during Q2 2023[97]. - Anticipated sales from the upcoming ageLOC WellSpa iO are projected to be between $70 million and $90 million for the second half of 2023[97]. - The company acquired 60% of LifeDNA for $4.0 million and 100% of Beauty Biosciences for $75.0 million in cash during Q2 2023[121]. Shareholder Returns - The company has $175.4 million available for stock repurchases under its existing plan, with no shares repurchased in the first half of 2023[135]. - The company anticipates continuing quarterly cash dividends, having declared $0.39 per share in February and May 2023, totaling approximately $39 million[136].

NU Skin Enterprises, Inc. (NYSE:NUS) Q1 2023 Earnings Conference Call May 3, 2023 5:00 PM ET Company Participants Scott Pond - VP, IR Ryan Napierski - President, CEO & Director Connie Tang - EVP & Chief Global Growth & Customer Experience Officer James Thomas - Interim CFO Conference Call Participants Chasen Bender - Citi Operator Good day and thank you for standing by. Welcome to the Quarter One Nu Skin Enterprises Earnings Conference Call. At this time, all participants are in a listen mode only. After th ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, DC 20549 Title of each class Trading Symbol(s) Name of each exchange on which registered Class A Common Stock, $.001 par value NUS New York Stock Exchange FORM 10-Q ☑ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2023 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM _____________ TO ________ ...