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Nu Skin (NUS) Stock Gains on Q1 Earnings Beat & Raised View

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Shares of Nu Skin Enterprises, Inc. (NUS - Free Report) rose 4.7% in the after-market trading session on May 5, as it delivered impressive first-quarter 2021 results.  Notably, the top and the bottom line increased year over year as well as beat the Zacks Consensus Estimate. Moreover, management raised its 2021 revenues and earnings view.

The company is encouraged about its recent innovations like ageLOC Boost and Nutricentials Bioadaptives. Moreover, it is optimistic about strong demand for new product introductions that are lined during the back half of 2021. These include Beauty Focus Collagen+, ageLOC Meta and a key Pharmanex product introduction. Further, the company continued to see solid momentum in the West markets, with robust adoption in social commerce business model.

Q1 Highlights

Nu Skin reported quarterly earnings of 91 cents a share, which beat the Zacks Consensus Estimate of 72 cents per share and surged significantly from 36 cents reported in the year-ago quarter.

Nu Skin Enterprises, Inc. Price, Consensus and EPS Surprise

 

Nu Skin Enterprises, Inc. Price, Consensus and EPS Surprise

Nu Skin Enterprises, Inc. price-consensus-eps-surprise-chart | Nu Skin Enterprises, Inc. Quote

 

Revenues of $677 million rallied 31% year over year on a reported basis. Moreover, the top line surpassed the Zacks Consensus Estimate of $633.3 million. On a constant-currency (cc) basis, revenues increased 25%. First-quarter revenues included a positive impact of 6% from foreign-currency fluctuations. Revenue growth can be attributed to increase in sales leaders and customer base.

Sales leaders were up 22% year over year to 60,619, while Nu Skin’s customer base increased 34% to 1,517,260. The company highlighted that its innovative beauty and wellness product efforts along with strength in its social commerce business model drove the upside.

Gross profit of $506.5 million increased from $392.2 million reported in the year-ago quarter. However, gross margin contracted year over year from 75.7% to 74.8%. That said, the metric expanded 80 basis points sequentially on the back of favorable product mix and lower air freight charges. Further, Nu Skin business’ gross margin declined to 77.8% from 78.1% reported in the prior-year quarter.

This Zacks Rank #4 (Sell) companies’ selling expenses increased from $206 million in the prior-year quarter to $273.7 million. As a percentage of sales, the metric came in at 40.4% compared with 39.8% reported in the year-ago quarter. Nu Skin business’ selling expenses were 43.4% of sales, up from 42% in the year-ago quarter.

Meanwhile, general and administrative expenses of $169.8 million increased from $149.6 million in the year-ago quarter. Nevertheless, as a percentage of sales, general and administrative expenses contracted from 28.9% to 25.1%.

Operating income of $62.9 million increased from $36.6 million in the year-ago quarter. Further, operating margin was 9.3%, up from 7.1% reported in the year-ago quarter. Notably, the company is on track to achieve its operating margin goal of 13%.

Segmental Results

Segment-wise, revenues at cc basis improved 97% in Americas/Pacific, 98% in EMEA, 1% in Mainland China, 11% in Japan. However, the same declined 5% in Southeast Asia, 3% in Hong Kong/Taiwan and 9% in Other. Further, revenues were flat in South Korea at cc. Consequently, Nu Skin business’ total revenues increased 22% at cc from the prior-year quarter’s figure to $630.9 million.

Additionally, the company benefited from an impressive 69% revenue growth in the manufacturing division at cc. Also, the Grow Tech business contributed significantly to revenue growth.

 

Other Financial Details

Nu Skin ended the quarter with cash and cash equivalents of $339.1 million, long-term debt of $298.1 million and stockholders' equity of $871.5 million.

During the reported quarter, the company paid out dividends of $19.3 million and repurchased $50.4 million worth of shares. With this, it currently has $275.4 million remaining under the current share repurchase authorization.

In a separate press release, Nu Skin announced a dividend of 38 cents per share payable on Jun 9, 2021 to shareholders of record as of May 28.

Guidance

Owing to solid first-quarter results coupled with impressive growth trend for customer and sales leader, the company revised its 2021 revenue and earnings per share (EPS) guidance upwards. Also, healthy product pipeline for 2021 is likely to contribute to the upside.

Management now expects 2021 revenues in the range of $2.80-$2.87 billion, which calls for an increase of 9-11% year over year. It anticipates favorable currency impact of 3-4% on revenues. Earlier, the company had projected the metric in the range of $2.71-$2.81 billion, indicating an increase of 5-9% year over year. Further, 2021 EPS are now projected within $4.05-$4.30, indicating an increase of 12-18%. Earlier, it had expected the metric within $3.80-$4.10 per share, suggesting an increase of 5-13%.

For the second quarter of 2021, the company projects revenues of $680-$705 million that will include favorable currency impacts of nearly 5%. The projection suggests an improvement of 11-15% year over year. Quarterly EPS is anticipated between 97 cents and $1.07, indicating 20-32% growth from the year-ago quarter’s levels.

Shares of Nu Skin have increased 14.2% in the past six months compared with the industry’s 23.4% growth.

Some Solid Staple Bets

Inter Parfums, Inc. (IPAR - Free Report) currently sporting a Zacks Rank #1 (Strong Buy), has a trailing four-quarter earnings surprise of 20.4%, on average. You can see the complete list of today’s Zacks #1 Rank stocks here.

Medifast, Inc. (MED - Free Report) , currently carrying a Zacks Rank #2 (Buy), has a trailing four-quarter earnings surprise of 12.7%, on average.

B&G Foods, Inc. (BGS - Free Report) currently carrying a Zacks Rank #2 (Strong Buy), has a trailing four-quarter earnings surprise of 4.2%, on average.

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