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Nu Skin (NUS) Appears Dull on High Cost & Currency Headwinds
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Nu Skin Enterprises, Inc. (NUS - Free Report) appears to be in a tight spot because of macroeconomic factors and inflation, which puts pressure on consumer spending. The global integrated beauty and wellness company’s strong international presence exposes it to the risk of volatile currency movements.
Thanks to such factors, Nu Skin recently lowered revenue and earnings guidance for 2023. The company anticipates revenues of $2.00-$2.08 billion in 2023, suggesting a 10-6% year-over-year decline. Earlier, revenues were expected to be $2.03-$2.18 billion. Management envisions an adjusted earnings per share (EPS) of $2.30-$2.60 compared with the $2.41-$2.81 stated earlier. The projection suggests a decline from the adjusted earnings of $2.90 reported last year.
Shares of the Zacks Rank #4 (Sell) company have slumped 44.6% year to date compared with the industry’s 20.5% decline. Let’s discuss this in detail.
Image Source: Zacks Investment Research
What’s Hurting Nu Skin’s Performance?
Nu Skin has been witnessing continued macroeconomic hurdles. Macroeconomic factors and related price increases have affected specific key markets, leading to a slowdown in consumer spending and customer acquisition. These factors hurt the company’s second-quarter 2023 results, wherein the top and bottom lines declined year over year and missed the Zacks Consensus Estimate.
The company’s quarterly adjusted earnings of 54 cents a share declined from the 77 cents reported in the year-ago quarter. Revenues of $500.3 million tumbled roughly 11%. Sales leaders were down 9% year over year to 45,807. Nu Skin’s customer base dropped 25% to 1,041,118. The company’s paid affiliates were down 23% to 187,652.
Nu Skin’s margins have been contracting year over year in the past few quarters. In the second quarter, gross profit of $364.7 million declined from the $412.5 million reported in the year-ago quarter. The gross margin was 72.9%, down from 73.6% reported in the year-ago quarter. The operating margin contracted to 8.5% from the 9.2% reported in the year-ago quarter.
The company is also battling unfavorable currency headwinds. Any adverse currency fluctuation will likely weigh on the company’s operating performance. In second-quarter 2023, revenues included a negative impact of 3% from foreign currency fluctuations. The company envisions unfavorable foreign currency impacts of 3-2% on 2023 revenues.
Wrapping Up
With the help of advanced technology and well-strategized product programs, Nu Skin tries to capture greater market share and maintain growth momentum. The company’s long-term strategies stand on three key pillars — Products, Programs and Platforms. The company has been successfully launching innovative beauty devices, which have become an essential part of its growth. Strength in the company’s Nu Vision 2025 strategy bodes well.
However, whether these upsides can help Nu Skin counter the downsides above is yet to be seen.
Some Solid Staple Bets
MGP Ingredients (MGPI - Free Report) , which produces and markets ingredients and distillery products, currently sports a Zacks Rank #1 (Strong Buy). MGPI has a trailing four-quarter earnings surprise of 18% on average. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for MGP Ingredients’ current financial-year sales and earnings per share suggests growth of 5.8% and 10.4%, respectively, from the corresponding year-ago reported figures.
Flowers Foods (FLO - Free Report) emphasizes providing high-quality baked items. The company currently carries a Zacks Rank #2 (Buy). The expected EPS growth rate for three to five years is 2.3%.
The Zacks Consensus Estimate for Flowers Foods’ current financial-year sales suggests growth of 6.7% from the year-ago period’s actuals. FLO has a trailing four-quarter earnings surprise of 7.6% on average.
Utz Brands Inc. (UTZ - Free Report) manufactures a diverse portfolio of salty snacks, carrying a Zacks Rank #2. UTZ’s expected EPS growth rate for three to five years is 11.4%.
The Zacks Consensus Estimate for Utz Brands’ current fiscal year sales suggests growth of 3.7% from the year-ago reported numbers. UTZ has a trailing four-quarter earnings surprise of 12.3% on average.
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Nu Skin (NUS) Appears Dull on High Cost & Currency Headwinds
Nu Skin Enterprises, Inc. (NUS - Free Report) appears to be in a tight spot because of macroeconomic factors and inflation, which puts pressure on consumer spending. The global integrated beauty and wellness company’s strong international presence exposes it to the risk of volatile currency movements.
Thanks to such factors, Nu Skin recently lowered revenue and earnings guidance for 2023. The company anticipates revenues of $2.00-$2.08 billion in 2023, suggesting a 10-6% year-over-year decline. Earlier, revenues were expected to be $2.03-$2.18 billion. Management envisions an adjusted earnings per share (EPS) of $2.30-$2.60 compared with the $2.41-$2.81 stated earlier. The projection suggests a decline from the adjusted earnings of $2.90 reported last year.
Shares of the Zacks Rank #4 (Sell) company have slumped 44.6% year to date compared with the industry’s 20.5% decline. Let’s discuss this in detail.
Image Source: Zacks Investment Research
What’s Hurting Nu Skin’s Performance?
Nu Skin has been witnessing continued macroeconomic hurdles. Macroeconomic factors and related price increases have affected specific key markets, leading to a slowdown in consumer spending and customer acquisition. These factors hurt the company’s second-quarter 2023 results, wherein the top and bottom lines declined year over year and missed the Zacks Consensus Estimate.
The company’s quarterly adjusted earnings of 54 cents a share declined from the 77 cents reported in the year-ago quarter. Revenues of $500.3 million tumbled roughly 11%. Sales leaders were down 9% year over year to 45,807. Nu Skin’s customer base dropped 25% to 1,041,118. The company’s paid affiliates were down 23% to 187,652.
Nu Skin’s margins have been contracting year over year in the past few quarters. In the second quarter, gross profit of $364.7 million declined from the $412.5 million reported in the year-ago quarter. The gross margin was 72.9%, down from 73.6% reported in the year-ago quarter. The operating margin contracted to 8.5% from the 9.2% reported in the year-ago quarter.
The company is also battling unfavorable currency headwinds. Any adverse currency fluctuation will likely weigh on the company’s operating performance. In second-quarter 2023, revenues included a negative impact of 3% from foreign currency fluctuations. The company envisions unfavorable foreign currency impacts of 3-2% on 2023 revenues.
Wrapping Up
With the help of advanced technology and well-strategized product programs, Nu Skin tries to capture greater market share and maintain growth momentum. The company’s long-term strategies stand on three key pillars — Products, Programs and Platforms. The company has been successfully launching innovative beauty devices, which have become an essential part of its growth. Strength in the company’s Nu Vision 2025 strategy bodes well.
However, whether these upsides can help Nu Skin counter the downsides above is yet to be seen.
Some Solid Staple Bets
MGP Ingredients (MGPI - Free Report) , which produces and markets ingredients and distillery products, currently sports a Zacks Rank #1 (Strong Buy). MGPI has a trailing four-quarter earnings surprise of 18% on average. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for MGP Ingredients’ current financial-year sales and earnings per share suggests growth of 5.8% and 10.4%, respectively, from the corresponding year-ago reported figures.
Flowers Foods (FLO - Free Report) emphasizes providing high-quality baked items. The company currently carries a Zacks Rank #2 (Buy). The expected EPS growth rate for three to five years is 2.3%.
The Zacks Consensus Estimate for Flowers Foods’ current financial-year sales suggests growth of 6.7% from the year-ago period’s actuals. FLO has a trailing four-quarter earnings surprise of 7.6% on average.
Utz Brands Inc. (UTZ - Free Report) manufactures a diverse portfolio of salty snacks, carrying a Zacks Rank #2. UTZ’s expected EPS growth rate for three to five years is 11.4%.
The Zacks Consensus Estimate for Utz Brands’ current fiscal year sales suggests growth of 3.7% from the year-ago reported numbers. UTZ has a trailing four-quarter earnings surprise of 12.3% on average.