Nu Skin(NUS) - 2025 Q1 - Quarterly Report

Revenue Performance - Revenue for Q1 2025 decreased by 12.7% to $364.5 million, down from$417.3 million in Q1 2024, with a 3.0% negative impact from foreign-currency fluctuations[74] - Total revenue for Q1 2025 decreased by 12.7% to $364.5 million, down from$417.3 million in Q1 2024[102] - Revenue from the Americas segment decreased by 8.0% to $69.1 million, while the Mainland China segment saw a decline of 21.8$47.8 million[79] - The total revenue decline of 12.7% was attributed to macroeconomic challenges affecting consumer spending and customer acquisition[75] Customer Metrics - The number of Customers, Paid Affiliates, and Sales Leaders declined by 11%, 15%, and 20% year-over-year, respectively[74] - Total customers decreased by 11% year-over-year to 776,712, with significant declines in Mainland China (25%) and South Korea (28%) markets[84] - Paid affiliates decreased by 15% year-over-year to 131,518, with the largest drop in Southeast Asia/Pacific (25%) and South Korea (20%) markets[84] - Sales leaders decreased by 20% year-over-year to 31,036, with a notable decline in Mainland China (35%) and Southeast Asia/Pacific (18%) markets[84] Earnings and Profitability - Earnings per share for Q1 2025 increased to $2.14, compared to$(0.01) in the prior-year period, primarily due to a pre-tax gain of approximately $176.2 million from the sale of the Mavely business[76] - Net income for Q1 2025 was$107.5 million, a significant increase from a net loss of $(0.5) million in Q1 2024[113] - Gross profit margin decreased to 67.8$113.2 million in Q1 2025 from $124.6 million in Q1 2024, primarily due to reduced labor and promotional expenses[106] Capital and Cash Management - As of March 31, 2025, working capital increased to$264.6 million from $242.0 million as of December 31, 2024, primarily due to proceeds from the sale of Mavely[115] - The company had$213.6 million in cash and cash equivalents as of March 31, 2025, up from $198.0 million at the end of 2024[121] - The company repurchased 0.6 million shares of Class A common stock for$5.0 million in Q1 2025, with $157.4 million remaining available for repurchases[119] - The company maintains a consolidated leverage ratio not exceeding 2.75 to 1.00 and was in compliance with all debt covenants as of March 31, 2025[117] Future Outlook and Strategic Initiatives - The company anticipates nominal revenue from its India market pre-opening in Q4 2025, with a formal launch planned for mid-2026[75] - The company is focusing on business model optimization and the rollout of enhancements to its sales performance plan in 2025[75] - The company is preparing for the launch of its next connected device, the Prysm iO, as part of its long-term vision[75] Tax and Financial Gains - The effective tax rate for Q1 2025 was 20.1$176.2 million from the sale of the Mavely entity for $230 million in January 2025[110] Cash Flow and Dividends - In Q1 2025, the company generated$0.4 million in cash from operations, a decrease from $3.3 million in the same period last year[114] - A quarterly cash dividend of$0.06 per share was declared in February 2025, totaling $3.0 million paid on March 5, 2025[120] Currency and Repatriation - The company has$30.9 million in cash denominated in Chinese RMB, with restrictions on repatriation until necessary financial statements are filed[122] - The company plans to repatriate undistributed earnings from non-U.S. operations as necessary, considering cash needs for dividends, stock repurchases, and capital investments[122]