Nu Skin (NUS) Down More Than 25% in 3 Months: Here's Why

Core Insights - Nu Skin Enterprises, Inc. is facing ongoing macroeconomic challenges, including inflation affecting consumer spending and customer acquisition globally, alongside adverse currency fluctuations [1][2][4] - The company's stock has decreased by 27.3% over the past three months, contrasting with a 19.7% growth in the industry [1] Macroeconomic Setbacks - In Q4 2023, Nu Skin's revenues were $488.6 million, reflecting a year-over-year decline of approximately 6% [2] - Sales leaders decreased by 10% year-over-year to 44,059, while the customer base fell by 15% to 977,039 [2] - Paid affiliates dropped by 30% to 166,866, with an adjusted decline of 13% [2] Volatile Currency Movements - The company experienced a negative impact of 1% on revenues due to foreign currency fluctuations in Q4 2023 [3] - For 2024, Nu Skin anticipates a similar unfavorable foreign currency impact of 1% on revenues and nearly 3-2% for Q1 [3] Challenging Outlook - Management expects continued pressure on consumer spending due to persistent hyperinflation, alongside unfavorable currency translations [4] - Revenue projections for 2024 are estimated between$ 1.73 billion and $1.87 billion, indicating a decline of 12-5% from the previous year [4] - Adjusted EPS is forecasted to be between 95 cents and$ 1.35, down from $1.85 in 2023 [4] Q1 2024 Expectations - For Q1 2024, Nu Skin anticipates revenues between$ 400 million and $435 million, suggesting a decline of 17% to 10% from the same quarter last year [5] - The expected bottom line ranges from a loss of 7 cents to earnings of 3 cents per share [5] Strategic Initiatives - Nu Skin aims to create long-term enterprise value by focusing on three core initiatives: accelerating growth in Rhyz, launching a market expansion strategy starting in India in 2025, and enhancing its digital-first affiliate platform [6] - Despite these initiatives, the ongoing macroeconomic challenges remain significant in the near term [6]