Nu Skin (NUS) Trims FY24 View Despite Q2 Earnings Beat

Core Insights - Nu Skin Enterprises, Inc. (NUS) reported second-quarter 2024 results with earnings and net sales exceeding Zacks Consensus Estimates, but both metrics declined year over year due to a challenging macroeconomic environment [1] - The company is narrowing its annual guidance range in light of first-half 2024 performance and increasing foreign exchange headwinds [1] - Management is focusing on transforming its operating model and cost-saving measures to enhance its position as a leading integrated beauty, wellness, and lifestyle ecosystem [1] Financial Performance - Adjusted earnings were 21 cents per share, down from 54 cents in the prior year but above the Zacks Consensus Estimate of 18 cents [2] - Revenues totaled $439.1 million, a decline of 12.2% year over year, impacted negatively by 4.2% from foreign currency fluctuations; on a constant-currency basis, revenues fell 8% [2] - Rhyz revenues increased by 32.3% year over year, contributing positively to the overall revenue performance [2] - Sales leaders decreased by 16% to 38,592, while the customer base dropped by 14% to 893,514, and paid affiliates fell by 17% to 155,486 [2] Profitability Metrics - Gross profit was $307.2 million, down from $364.7 million in the previous year, with a gross margin of 70%, down from 72.9% [3] - Selling expenses decreased to $165.5 million from $185.2 million, representing 37.7% of revenues, up from 37% in the prior year [3] - General and administrative expenses were $117.9 million, down from $137 million, accounting for 26.9% of revenues, a slight decrease from 27.4% [3] - Adjusted operating margin contracted to 5.4% from 8.5% in the year-ago quarter [4] Regional Performance - Revenue declines were noted across various regions, including a 15.1% drop in the Americas and a 24.5% decline in Mainland China; however, other revenues surged by 100.8% year over year [5] Guidance and Future Outlook - Nu Skin anticipates 2024 revenues between $1.73 billion and $1.81 billion, indicating a decline of 12-8% from the previous year, with unfavorable foreign currency impacts of 4-3% [7] - Adjusted earnings per share (EPS) are projected to be between 75-95 cents, down from $1.85 in 2023 [7] - For Q3 2024, the company expects revenues between $430 million and $465 million, reflecting a decline of 14% to 7% year over year, with adjusted earnings of 15-25 cents per share [7] Financial Position - At the end of the quarter, the company had cash and cash equivalents of $224.3 million, long-term debt of $428.3 million, and total stockholders' equity of $686.2 million [6] - The company declared a cash dividend of 6 cents per share, payable on September 11, 2024 [6]