Revenue Performance - Revenue for Q3 2023 decreased 7% to 498.8million,comparedto537.8 million in Q3 2022, and for the first nine months of 2023, revenue decreased 13% to 1.5billionfrom1.7 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 91.7million,whiletheAsia/Pacificsegmentsawan1868.7 million[104]. - Total Nu Skin revenue for Q3 2023 was 498.8million,a71.48 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 17.1millioninthefirstninemonthsof2023,downfrom40.3 million in the same period of 2022[116]. Earnings and Profitability - Earnings per share for Q3 2023 decreased 45% to (0.74),comparedto(0.51) in Q3 2022, and for the first nine months, it decreased 97% to 0.03from0.94[101]. - The third quarter of 2023 included an inventory write-off charge of 65.7million,contributingtothedeclineinearningspershare[101].−Grossprofitasapercentageofrevenuefellto58.637.0 million, compared to a net loss of 25.4millioninQ32022[135].−Forthefirstninemonthsof2023,netincomewas1.3 million, a significant decrease from 47.6millioninthesameperiodof2022[135].−TheeffectivetaxrateforQ32023was(7.3)30.2 million in revenue for Q3 2023 and 66.3millionforthefirstninemonths,whileageLOCWellSpaiOgenerated35.6 million in Q3 2023[100]. - The Manufacturing segment under Rhyz Investments reported a 20% increase in revenue for Q3 2023 to 49.7million,whileRhyzothersegmentrevenuesurged1,91010.8 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 64.5millionincashfromoperationsinthefirstninemonthsof2023,downfrom82.5 million in the prior-year period[136]. - As of September 30, 2023, cash and cash equivalents were 250.0million,adecreasefrom278.5 million as of December 31, 2022[136]. - Capital expenditures for the nine months ended September 30, 2023, were 38.1million,withanestimatedtotalof50–60 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 60million[138].StrategicInitiatives−ThecompanyplanstocontinuelaunchingnewproductsinQ42023,withpreviewsinMainlandChinaforageLOCTRMeandageLOCWellSpaiO[100].−Thecompanyexpectstotalchargesofapproximately15–$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].
Nu Skin(NUS)2023-11-01 16:00