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Nu Skin (NUS) More Than Doubles in a Year: Innovation a Driver
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Efforts to strengthen sales leaders and expand the customer base have been working in favor of Nu Skin Enterprises, Inc. (NUS - Free Report) . Also, the company’s focus on innovation and effective product launches is yielding. Thanks to these upsides, shares of Nu Skin have surged 125.1% in the past year compared with the industry’s rally of 55.1%. Let’s delve deeper.
Focus on Innovation
With the help of advanced technology and well-strategized product programs, Nu Skin tries to capture greater market share and maintain growth momentum. In fact, the company’s long-term strategies stand on three key pillars — Products, Programs and Platforms. Notably, management is optimistic about the company’s global introduction of beauty device system —ageLOC Boost (2020). This recently-introduced device recorded sales of nearly $100 million in the second half of 2020.
Moreover, the company is optimistic about momentum in 2021, driven by impressive product pipeline, robust digital efforts along with steady improvement in customers and sales leaders. Keeping along these lines, management expects to expand its customer reach via the launch of Boost and Nutricentials products in the first half of 2021. Further, Nu Skin expects to unveil new products in the remaining half of the year. Apart from product launches, Nu Skin’s well-knit product strategies and customer retention programs have been driving growth in several market locations.
Growth Efforts on Track
Nu Skin is focused on empowering sales leaders and customer base through product launches and engaging technology platforms among other initiatives. Moreover, the company is conducting a number of promotional seminars online amid the pandemic. Additionally, Nu Skin rolled out its Velocity sales compensation plan as well as enJoy rewards program in the past three years. These programs are doing well and continue to drive growth in sales leaders and customers. In the fourth quarter of 2020, sales leaders were up 29% year over year to 70,435, while Nu Skin’s customer base surged 34% to 1,557,302. Sales leader’s growth was driven by successful introduction of Boost and Nutricentials products.
A shift to work-from-home and at-home trends amid the pandemic has led to increased online shopping, which presents a unique opportunity for the company’s business. With these macro trends, Nu Skin is making significant investments in the digital platform to build a socially-enabled business. In this regard, the company rolled out its personal recommendation app, Vera in 2020. By the end of 2021, Nu Skin intends to expand the Vera experience to add a wellness journey that will be connected to other parts of its portfolio. Further, management is on track to introduce its digital ecosystem, Empower Me.
The company is leveraging its technology to scale up business, grow customers in new segments and expand its affiliate business to younger demographics. In January, Nu Skin announced the buyout of 3i Solutions — an innovative company — which develops and produces ingredients for consumer markets with the help of proprietary encapsulation technologies. Such technologies will help Nu Skin create new product forms and boost performance of its formulations in beauty and wellness.
Is all Rosy for Nu Skin?
Nu Skin’s gross margin has been contracting year over year for a while now due to increased freight costs. This was witnessed in the fourth quarter, with gross margin contracting from 75.9% to 74%. Nu Skin business’ gross margin also declined to 76.5% from 78.5% reported in the prior-year quarter. Apart from the abovementioned factor, a geographic mix shift owing to strong growth in the West region affected gross margin. In its fourth-quarter earnings call, management highlighted that the abovementioned downsides are likely to keep putting pressure on gross margin in 2021. Also, escalated selling expenses as well as general and administrative costs were a drag on the company’s performance.
That being said, we believe that the aforementioned upsides are likely to help this Zacks Rank #3 (Hold) company stay poised amid these headwinds.
The Hain Celestial (HAIN - Free Report) , currently carrying a Zacks Rank #2, has a trailing four-quarter earnings surprise of 26.7%, on average.
Medifast, Inc. (MED - Free Report) , currently carrying a Zacks Rank #2, has a trailing four-quarter earnings surprise of 17.4%, on average.
Zacks Names “Single Best Pick to Double”
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research SherazMian hand-picks one to have the most explosive upside of all.
You know this company from its past glory days, but few would expect that it’s poised for a monster turnaround. Fresh from a successful repositioning and flush with A-list celeb endorsements, it could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in a little more than 9 months and Nvidia which boomed +175.9% in one year.
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Nu Skin (NUS) More Than Doubles in a Year: Innovation a Driver
Efforts to strengthen sales leaders and expand the customer base have been working in favor of Nu Skin Enterprises, Inc. (NUS - Free Report) . Also, the company’s focus on innovation and effective product launches is yielding. Thanks to these upsides, shares of Nu Skin have surged 125.1% in the past year compared with the industry’s rally of 55.1%. Let’s delve deeper.
Focus on Innovation
With the help of advanced technology and well-strategized product programs, Nu Skin tries to capture greater market share and maintain growth momentum. In fact, the company’s long-term strategies stand on three key pillars — Products, Programs and Platforms. Notably, management is optimistic about the company’s global introduction of beauty device system —ageLOC Boost (2020). This recently-introduced device recorded sales of nearly $100 million in the second half of 2020.
Moreover, the company is optimistic about momentum in 2021, driven by impressive product pipeline, robust digital efforts along with steady improvement in customers and sales leaders. Keeping along these lines, management expects to expand its customer reach via the launch of Boost and Nutricentials products in the first half of 2021. Further, Nu Skin expects to unveil new products in the remaining half of the year. Apart from product launches, Nu Skin’s well-knit product strategies and customer retention programs have been driving growth in several market locations.
Growth Efforts on Track
Nu Skin is focused on empowering sales leaders and customer base through product launches and engaging technology platforms among other initiatives. Moreover, the company is conducting a number of promotional seminars online amid the pandemic. Additionally, Nu Skin rolled out its Velocity sales compensation plan as well as enJoy rewards program in the past three years. These programs are doing well and continue to drive growth in sales leaders and customers. In the fourth quarter of 2020, sales leaders were up 29% year over year to 70,435, while Nu Skin’s customer base surged 34% to 1,557,302. Sales leader’s growth was driven by successful introduction of Boost and Nutricentials products.
A shift to work-from-home and at-home trends amid the pandemic has led to increased online shopping, which presents a unique opportunity for the company’s business. With these macro trends, Nu Skin is making significant investments in the digital platform to build a socially-enabled business. In this regard, the company rolled out its personal recommendation app, Vera in 2020. By the end of 2021, Nu Skin intends to expand the Vera experience to add a wellness journey that will be connected to other parts of its portfolio. Further, management is on track to introduce its digital ecosystem, Empower Me.
The company is leveraging its technology to scale up business, grow customers in new segments and expand its affiliate business to younger demographics. In January, Nu Skin announced the buyout of 3i Solutions — an innovative company — which develops and produces ingredients for consumer markets with the help of proprietary encapsulation technologies. Such technologies will help Nu Skin create new product forms and boost performance of its formulations in beauty and wellness.
Is all Rosy for Nu Skin?
Nu Skin’s gross margin has been contracting year over year for a while now due to increased freight costs. This was witnessed in the fourth quarter, with gross margin contracting from 75.9% to 74%. Nu Skin business’ gross margin also declined to 76.5% from 78.5% reported in the prior-year quarter. Apart from the abovementioned factor, a geographic mix shift owing to strong growth in the West region affected gross margin. In its fourth-quarter earnings call, management highlighted that the abovementioned downsides are likely to keep putting pressure on gross margin in 2021. Also, escalated selling expenses as well as general and administrative costs were a drag on the company’s performance.
That being said, we believe that the aforementioned upsides are likely to help this Zacks Rank #3 (Hold) company stay poised amid these headwinds.
3 Key Staple Picks
The Estee Lauder Companies (EL - Free Report) , currently carrying a Zacks Rank #2 (Buy), has a long-term earnings growth rate of 10.7%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The Hain Celestial (HAIN - Free Report) , currently carrying a Zacks Rank #2, has a trailing four-quarter earnings surprise of 26.7%, on average.
Medifast, Inc. (MED - Free Report) , currently carrying a Zacks Rank #2, has a trailing four-quarter earnings surprise of 17.4%, on average.
Zacks Names “Single Best Pick to Double”
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research SherazMian hand-picks one to have the most explosive upside of all.
You know this company from its past glory days, but few would expect that it’s poised for a monster turnaround. Fresh from a successful repositioning and flush with A-list celeb endorsements, it could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in a little more than 9 months and Nvidia which boomed +175.9% in one year.
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