Nu Skin Q3 Earnings & Sales Miss Estimates, 2024 Guidance Cut

Core Insights - Nu Skin Enterprises, Inc. (NUS) reported disappointing third-quarter 2024 results, with both earnings and net sales falling short of Zacks Consensus Estimate, leading to a downward revision of its 2024 outlook due to ongoing macroeconomic pressures and challenges in the direct selling industry [1][10]. Financial Performance - Adjusted earnings for the third quarter were 17 cents per share, a decline from 56 cents in the same quarter last year, missing the Zacks Consensus Estimate of 20 cents [2]. - Quarterly revenues amounted to $430.1 million, a decrease of 13.8% year over year, with a negative impact of 3.4% from foreign currency fluctuations; on a constant-currency basis, revenues fell 10.4% [3]. - Gross profit increased to$ 301.5 million from $292.3 million year over year, but gross margin (excluding inventory write-off impact) decreased to 70.1% from 71.8% [5]. - Selling expenses decreased to$ 167.6 million from $187.8 million in the prior-year quarter, but as a percentage of revenues, it rose to 39% from 37.6% [6]. - General and administrative expenses were$ 115.6 million, down from $130.9 million year over year, but as a percentage of revenues, it increased to 26.9% from 26.2% [7]. Customer and Affiliate Metrics - Sales leaders decreased by 19% year over year to 38,284, while the customer base dropped 15% to 831,768, and paid affiliates fell by 20% to 149,264 [4]. Regional Revenue Performance - Revenue declines were noted across various regions: Americas (-15.8%), Southeast Asia/Pacific (-13.4%), Mainland China (-24.5%), Japan (-11.6%), South Korea (-29.1%), Europe & Africa (-22.9%), and Hong Kong/Taiwan (-17.1%) [7]. Financial Health - As of the end of the quarter, the company had cash and cash equivalents of$ 227.8 million, long-term debt of $373.5 million, and total stockholders' equity of$ 706.9 million [8]. - The company declared a cash dividend of 6 cents per share, payable on December 11, 2024, to shareholders of record as of November 29 [9]. Future Outlook - For 2024, Nu Skin anticipates revenues between $1.70 billion and$ 1.73 billion, indicating a 12-14% decline from the previous year, with unfavorable foreign currency impacts expected to affect revenues by 4-3% [10]. - Adjusted earnings per share for 2024 are projected to be between 65-75 cents, down from $1.85 in 2023 [11]. - For the fourth quarter of 2024, the company expects revenues between$ 410 million and $445 million, reflecting a decline of 9% to 16% from the previous year [12].