Nu Skin (NUS) Q1 Earnings Beat, Revenues Hurt by Currency Woes

Core Viewpoint - Nu Skin Enterprises, Inc. reported a decline in both revenue and earnings for the first quarter of 2024, with revenues missing the Zacks Consensus Estimate due to significant foreign currency headwinds, although cost management efforts positively impacted the bottom line [1][2]. Financial Performance - Adjusted earnings were 9 cents per share, down from 37 cents in the prior year, but exceeded the Zacks Consensus Estimate of 5 cents [2]. - Revenues totaled $417.3 million, a 13.3% year-over-year decline, with a 3.8% negative impact from foreign currency fluctuations; on a constant currency basis, revenues fell 9.5% [2]. - Rhyz revenues grew approximately 60% year-over-year, while overall revenues fell short of the Zacks Consensus Estimate of $431 million [2]. - Sales leaders decreased by 12% to 38,609, customer base dropped 19% to 875,261, and paid affiliates fell 30% to 154,171 [2]. Profitability Metrics - Gross profit was $294.1 million, down from $347.9 million year-over-year, with a gross margin of 70.5%, down from 72.3% [3]. - Selling expenses decreased to $153.5 million from $188.1 million, representing 36.8% of revenues, down from 39.1% [3]. - General and administrative expenses were $124.6 million, down from $133.9 million, accounting for 29.9% of revenues, up from 27.8% [3]. - Adjusted operating margin contracted by 160 basis points to 3.8% [4]. Regional Performance - Revenue declines by region (at constant currency) included 20.1% in the Americas, 6.1% in Mainland China, 8.1% in Southeast Asia/Pacific, 5.6% in Japan, 11.8% in Europe & Africa, 39.3% in South Korea, and 9.8% in Hong Kong/Taiwan; however, other revenues surged by 684.3% year-over-year [5]. Financial Position - At the end of the quarter, cash and cash equivalents were $212.5 million, long-term debt was $453.2 million, and total stockholders' equity was $810.2 million [6]. - The company paid out $3 million in dividends and has $162.4 million remaining under the current share repurchase authorization [6]. Guidance - For 2024, Nu Skin anticipates revenues between $1.73 billion and $1.87 billion, indicating a 12-5% decline from the previous year, with expected foreign currency impacts of 3-2% [7]. - Adjusted EPS is projected to be between 95 cents and $1.35, down from $1.85 in 2023; reported earnings are expected to range from 77 cents to $1.16 per share compared to 17 cents in 2023 [7]. - For Q2 2024, revenue expectations are between $420 million and $455 million, reflecting a decline of 16% to 9% year-over-year, with adjusted earnings projected at 10-20 cents per share [8].