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Why Is Nu Skin (NUS) Up 3.7% Since Last Earnings Report?
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It has been about a month since the last earnings report for Nu Skin Enterprises (NUS - Free Report) . Shares have added about 3.7% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Nu Skin due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.
Nu Skin Q3 Earnings Beat Estimates, Revenues Down
Nu Skin posted third-quarter 2021 results, wherein quarterly earnings came in at 97 cents a share, which beat the Zacks Consensus Estimate of 86 cents. However, the metric declined 10% from $1.08 per share reported in the year-ago quarter.
Revenues of $641.2 million fell 9% year over year on a reported basis. Revenues included a positive impact of 2% from foreign-currency fluctuations. On a constant-currency (cc) basis, revenues declined 11%. Management highlighted that revenues were lower than anticipated owing to the disruptions caused by the spread of the COVID delta variant. This led to unexpected government restrictions hindering selling as well as promotional activities across various markets, especially Mainland China and Southeast Asia. That said, the company was impressed by continued growth in the United States on the back of the Beauty Focus Collagen+ launch. Also, double-digit growth in Korea driven by product promotions and sales leader initiatives were a breather. The top line surpassed the Zacks Consensus Estimate of $639.2 million.
Sales leaders were down 15% year over year to 58,565. Nu Skin’s customer base dropped 9% to 1,395,271.
Gross profit of $482.2 million decreased from almost $520 million reported in the year-ago quarter. Gross margin expanded year over year from 73.9% to 75.2%. Nu Skin business’ gross margin expanded to 78.6% from 76.3% driven by favorable product mix, product cost declines as well as supply chain efficiencies.
Selling expenses declined from $280.7 million in the prior-year quarter to $255.7 million. As a percentage of sales, the metric came in at 39.9% and remained flat year over year. Nu Skin business’ selling expenses were 42.7% of sales, up from 42.4% in the year-ago quarter.
General and administrative expenses of $161.1 million decreased from $165.1 million in the year-ago quarter. The company’s effective expenses management contributed to the upside. As a percentage of sales, general and administrative expenses expanded from 23.5% to 25.1%.
Operating income of $65.4 million declined from $74.2 million in the year-ago quarter. Further, operating margin was 10.2%, down from 10.6% reported in the year-ago quarter.
Segmental Results
Segment-wise, revenues (at cc) declined 26% in Mainland China, 2% in Americas, 23% in Southeast Asia/Pacific, 11% in EMEA, 5% in Japan and 8% in Hong Kong/Taiwan. The same increased 8% in South Korea at cc. Total Nu Skin revenues of $598.6 million fell 11% at cc from the prior-year quarter’s figure of $662.4 million.
The company benefited from impressive revenue growth in the Grow Tech business at cc. Revenues in the Manufacturing business increased 2% at cc.
Other Financial Details
Nu Skin ended the quarter with cash and cash equivalents of $282.4 million, long-term debt of $278.6 million and total stockholders' equity of $936.5 million.
During the reported quarter, the company paid out dividends of $19 million and repurchased $10 million worth of shares. With this, it currently has $255.4 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 Dec 8, 2021, to shareholders of record as of Nov 26.
Guidance
Based on the third-quarter results, management adjusted its 2021 guidance downward. The company now anticipates 2021 revenues in the range of $2.67-$2.70 billion, which calls for an increase of 3-5% year over year. The metric was previously expected in the range of $2.81-$2.87 billion, suggesting an increase of 9-11% year over year. The company envisions a favorable currency impact of 2-3% on 2021 revenues. Management now expects 2021 earnings per share (EPS) in the range of $3.93-$4.03, indicating an increase of 8-11%. Earlier, the company had projected EPS within $4.30-$4.50, suggesting a rise of 18-14%. For the fourth quarter of 2021, the company projects revenues of $645-$675 million that includes unfavorable currency impacts of nearly 1%. The projection suggests a decline of 10-14% from the year-ago quarter’s level. Quarterly EPS is anticipated between 90 cents and $1.00, indicating 29-36% slump from the year-ago quarter’s levels.
How Have Estimates Been Moving Since Then?
It turns out, estimates review flatlined during the past month. The consensus estimate has shifted 12.43% due to these changes.
VGM Scores
Currently, Nu Skin has a subpar Growth Score of D, however its Momentum Score is doing a bit better with a C. However, the stock was allocated a grade of A on the value side, putting it in the top quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Nu Skin has a Zacks Rank #5 (Strong Sell). We expect a below average return from the stock in the next few months.
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Why Is Nu Skin (NUS) Up 3.7% Since Last Earnings Report?
It has been about a month since the last earnings report for Nu Skin Enterprises (NUS - Free Report) . Shares have added about 3.7% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Nu Skin due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.
Nu Skin Q3 Earnings Beat Estimates, Revenues Down
Nu Skin posted third-quarter 2021 results, wherein quarterly earnings came in at 97 cents a share, which beat the Zacks Consensus Estimate of 86 cents. However, the metric declined 10% from $1.08 per share reported in the year-ago quarter.
Revenues of $641.2 million fell 9% year over year on a reported basis. Revenues included a positive impact of 2% from foreign-currency fluctuations. On a constant-currency (cc) basis, revenues declined 11%. Management highlighted that revenues were lower than anticipated owing to the disruptions caused by the spread of the COVID delta variant. This led to unexpected government restrictions hindering selling as well as promotional activities across various markets, especially Mainland China and Southeast Asia. That said, the company was impressed by continued growth in the United States on the back of the Beauty Focus Collagen+ launch. Also, double-digit growth in Korea driven by product promotions and sales leader initiatives were a breather. The top line surpassed the Zacks Consensus Estimate of $639.2 million.
Sales leaders were down 15% year over year to 58,565. Nu Skin’s customer base dropped 9% to 1,395,271.
Gross profit of $482.2 million decreased from almost $520 million reported in the year-ago quarter. Gross margin expanded year over year from 73.9% to 75.2%. Nu Skin business’ gross margin expanded to 78.6% from 76.3% driven by favorable product mix, product cost declines as well as supply chain efficiencies.
Selling expenses declined from $280.7 million in the prior-year quarter to $255.7 million. As a percentage of sales, the metric came in at 39.9% and remained flat year over year. Nu Skin business’ selling expenses were 42.7% of sales, up from 42.4% in the year-ago quarter.
General and administrative expenses of $161.1 million decreased from $165.1 million in the year-ago quarter. The company’s effective expenses management contributed to the upside. As a percentage of sales, general and administrative expenses expanded from 23.5% to 25.1%.
Operating income of $65.4 million declined from $74.2 million in the year-ago quarter. Further, operating margin was 10.2%, down from 10.6% reported in the year-ago quarter.
Segmental Results
Segment-wise, revenues (at cc) declined 26% in Mainland China, 2% in Americas, 23% in Southeast Asia/Pacific, 11% in EMEA, 5% in Japan and 8% in Hong Kong/Taiwan. The same increased 8% in South Korea at cc. Total Nu Skin revenues of $598.6 million fell 11% at cc from the prior-year quarter’s figure of $662.4 million.
The company benefited from impressive revenue growth in the Grow Tech business at cc. Revenues in the Manufacturing business increased 2% at cc.
Other Financial Details
Nu Skin ended the quarter with cash and cash equivalents of $282.4 million, long-term debt of $278.6 million and total stockholders' equity of $936.5 million.
During the reported quarter, the company paid out dividends of $19 million and repurchased $10 million worth of shares. With this, it currently has $255.4 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 Dec 8, 2021, to shareholders of record as of Nov 26.
Guidance
Based on the third-quarter results, management adjusted its 2021 guidance downward. The company now anticipates 2021 revenues in the range of $2.67-$2.70 billion, which calls for an increase of 3-5% year over year. The metric was previously expected in the range of $2.81-$2.87 billion, suggesting an increase of 9-11% year over year. The company envisions a favorable currency impact of 2-3% on 2021 revenues. Management now expects 2021 earnings per share (EPS) in the range of $3.93-$4.03, indicating an increase of 8-11%. Earlier, the company had projected EPS within $4.30-$4.50, suggesting a rise of 18-14%. For the fourth quarter of 2021, the company projects revenues of $645-$675 million that includes unfavorable currency impacts of nearly 1%. The projection suggests a decline of 10-14% from the year-ago quarter’s level. Quarterly EPS is anticipated between 90 cents and $1.00, indicating 29-36% slump from the year-ago quarter’s levels.
How Have Estimates Been Moving Since Then?
It turns out, estimates review flatlined during the past month. The consensus estimate has shifted 12.43% due to these changes.
VGM Scores
Currently, Nu Skin has a subpar Growth Score of D, however its Momentum Score is doing a bit better with a C. However, the stock was allocated a grade of A on the value side, putting it in the top quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Nu Skin has a Zacks Rank #5 (Strong Sell). We expect a below average return from the stock in the next few months.