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Nu Skin (NUS) Down More Than 20% in 3 Months: Here's Why
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Nu Skin Enterprises, Inc. (NUS - Free Report) is battling persistent macroeconomic challenges, which have been hurting its customer acquisition. The global integrated beauty and wellness company’s international presence keeps it exposed to risks of unfavorable currency rates. These downsides hurt Nu Skin’s third-quarter 2023 performance. Also, management lowered its 2023 outlook.
Shares of the Zacks Rank #5 (Strong Sell) company have slumped 23.9% in the past three months compared with the industry’s 8.1% decline. The stock has underperformed the Zacks Consumer Staples’s decline of 1% during this time.
Let’s delve deeper.
Macroeconomic Challenges Hurt Q3 Results
Nu Skin has been encountering persistent macroeconomic obstacles, which continued in the third quarter of 2023. The macroeconomic challenges impacted consumer spending and customer acquisition, mainly in the Mainland China and the Americas segments. This was compounded by the continued strength of the U.S. dollar. Together, these factors dented NUS’ performance.
The company’s quarterly revenues missed the Zacks Consensus Estimate and declined year over year. Revenues of $498.8 million declined 7.3%, with sales leaders falling 6% year over year to 47,031. Nu Skin’s customer base dropped 21% to 978,907 and paid affiliates were down 23% to 186,162. The company’s margin performance remained disappointing in the quarter.
Image Source: Zacks Investment Research
Volatile Currency Movements
Nu Skin’s strong international presence exposes it to the risk of volatile currency movements. Any adverse currency fluctuation is likely to dent the company’s operating performance. In third-quarter 2023, revenues included a negative impact of 1% from foreign currency fluctuations. The company envisions unfavorable foreign currency impacts of 3-2% on 2023 revenues.
Path Ahead Looks Rough
Escalating macroeconomic pressures are hampering the core business in key markets. This and unfavorable currency translations, prompted management to revise its 2023 outlook downward. Nu Skin anticipates 2023 revenues of $1.92-$1.96 billion, suggesting a 14-12% year-over-year decline. Earlier, revenues were expected to be $2.00-$2.08 billion.
Management envisions an adjusted earnings per share (EPS) of $1.62-$1.77 compared with the $2.30-$2.60 expected earlier. The projection suggests a decline from adjusted earnings of $2.90 reported last year.
For the fourth quarter, Nu Skin expects revenues between $440 million and $480 million, including an unfavorable foreign currency impact of 3-2%. The current revenue projection suggests a decline of 16% to 8% from the year-ago quarter’s reported level.
Final Thoughts
Nu Skin is on track with the core elements, including the introduction of EmpowerMe, personalized beauty and wellness strategy, expansion of its affiliate-powered social commerce business model and the enhancement of its digital platform. With the help of advanced technology and well-strategized product programs, management tries to capture greater market share and maintain growth momentum. However, let’s see if these upsides can help NUS stay afloat amid such hurdles.
The Zacks Consensus Estimate for MGP Ingredients’ current financial year sales and earnings suggests growth of almost 6% and 14.2%, respectively, from the year-ago reported figures. MGPI has a trailing four-quarter earnings surprise of 16.2% on average.
Celsius Holdings (CELH - Free Report) , which offers functional drinks and liquid supplements, carries a Zacks Rank #2. CELH delivered an earnings surprise of 81.6% in the third quarter of 2023.
The Zacks Consensus Estimate for Celsius Holdings’ current financial year sales and earnings suggests growth of 98.5% and 185.2%, respectively, from the year-ago reported numbers.
Vital Farms Inc. (VITL - Free Report) offers a range of produced pasture-raised foods. It currently has a Zacks Rank #2. VITL has a trailing four-quarter earnings surprise of 145% on average.
The Zacks Consensus Estimate for Vital Farms’ current financial year sales suggests growth of 29.4% from the year-ago reported figure.
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Nu Skin (NUS) Down More Than 20% in 3 Months: Here's Why
Nu Skin Enterprises, Inc. (NUS - Free Report) is battling persistent macroeconomic challenges, which have been hurting its customer acquisition. The global integrated beauty and wellness company’s international presence keeps it exposed to risks of unfavorable currency rates. These downsides hurt Nu Skin’s third-quarter 2023 performance. Also, management lowered its 2023 outlook.
Shares of the Zacks Rank #5 (Strong Sell) company have slumped 23.9% in the past three months compared with the industry’s 8.1% decline. The stock has underperformed the Zacks Consumer Staples’s decline of 1% during this time.
Let’s delve deeper.
Macroeconomic Challenges Hurt Q3 Results
Nu Skin has been encountering persistent macroeconomic obstacles, which continued in the third quarter of 2023. The macroeconomic challenges impacted consumer spending and customer acquisition, mainly in the Mainland China and the Americas segments. This was compounded by the continued strength of the U.S. dollar. Together, these factors dented NUS’ performance.
The company’s quarterly revenues missed the Zacks Consensus Estimate and declined year over year. Revenues of $498.8 million declined 7.3%, with sales leaders falling 6% year over year to 47,031. Nu Skin’s customer base dropped 21% to 978,907 and paid affiliates were down 23% to 186,162. The company’s margin performance remained disappointing in the quarter.
Image Source: Zacks Investment Research
Volatile Currency Movements
Nu Skin’s strong international presence exposes it to the risk of volatile currency movements. Any adverse currency fluctuation is likely to dent the company’s operating performance. In third-quarter 2023, revenues included a negative impact of 1% from foreign currency fluctuations. The company envisions unfavorable foreign currency impacts of 3-2% on 2023 revenues.
Path Ahead Looks Rough
Escalating macroeconomic pressures are hampering the core business in key markets. This and unfavorable currency translations, prompted management to revise its 2023 outlook downward. Nu Skin anticipates 2023 revenues of $1.92-$1.96 billion, suggesting a 14-12% year-over-year decline. Earlier, revenues were expected to be $2.00-$2.08 billion.
Management envisions an adjusted earnings per share (EPS) of $1.62-$1.77 compared with the $2.30-$2.60 expected earlier. The projection suggests a decline from adjusted earnings of $2.90 reported last year.
For the fourth quarter, Nu Skin expects revenues between $440 million and $480 million, including an unfavorable foreign currency impact of 3-2%. The current revenue projection suggests a decline of 16% to 8% from the year-ago quarter’s reported level.
Final Thoughts
Nu Skin is on track with the core elements, including the introduction of EmpowerMe, personalized beauty and wellness strategy, expansion of its affiliate-powered social commerce business model and the enhancement of its digital platform. With the help of advanced technology and well-strategized product programs, management tries to capture greater market share and maintain growth momentum. However, let’s see if these upsides can help NUS stay afloat amid such hurdles.
Top-Ranked Staple Stocks
MGP Ingredients, Inc. (MGPI - Free Report) produces and markets ingredients and distillery products to the packaged goods industry. The company currently has a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The Zacks Consensus Estimate for MGP Ingredients’ current financial year sales and earnings suggests growth of almost 6% and 14.2%, respectively, from the year-ago reported figures. MGPI has a trailing four-quarter earnings surprise of 16.2% on average.
Celsius Holdings (CELH - Free Report) , which offers functional drinks and liquid supplements, carries a Zacks Rank #2. CELH delivered an earnings surprise of 81.6% in the third quarter of 2023.
The Zacks Consensus Estimate for Celsius Holdings’ current financial year sales and earnings suggests growth of 98.5% and 185.2%, respectively, from the year-ago reported numbers.
Vital Farms Inc. (VITL - Free Report) offers a range of produced pasture-raised foods. It currently has a Zacks Rank #2. VITL has a trailing four-quarter earnings surprise of 145% on average.
The Zacks Consensus Estimate for Vital Farms’ current financial year sales suggests growth of 29.4% from the year-ago reported figure.