We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Nu Skin (NUS) Up 28.5% Since Last Earnings Report: Can It Continue?
Read MoreHide Full Article
It has been about a month since the last earnings report for Nu Skin Enterprises (NUS - Free Report) . Shares have added about 28.5% 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’s Q3 Earnings & Revenue Miss Estimate, View Cut
Nu Skin posted dismal third-quarter 2022 results. The top and bottom lines missed the Zacks Consensus Estimate and declined year over year. Results were affected by higher-than-anticipated macro headwinds, including prolonged COVID-related disruptions in Mainland China, sluggishness in South Korea, continued inflation and unfavorable currency.
Despite the tough environment, the company introduced ageLOC LumiSpa iO in the said quarter. This, along with the expansion of ageLOC Meta and Beauty Focus Collagen+ products, and further advancement of its social commerce initiatives, contributed to constant-currency growth in four of the company’s reporting segments.
NUS also remains focused on Nu Vision 2025 for driving long-term growth and shareholder value. It 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. As part of its EmpowerMe strategy, the company plans to launch its next connected device, ageLOC Body iO, in the second half of 2023. In the first half, it intends to roll out enhancements to its TR90 weight management and body shaping line with a more personalized approach called TRMe.
Q3 Highlights
Nu Skin’s third-quarter adjusted earnings of 47 cents a share declined 51.5% from $97 reported in the year-ago quarter. The metric lagged the Zacks Consensus Estimate of 78 cents.
Revenues of $537.8 million fell 16% year over year on a reported basis. Revenues included a negative impact of 7% from foreign currency fluctuations. On a constant-currency (cc) basis, revenues declined 9%. The top line lagged the Zacks Consensus Estimate of $570 million. Sales leaders were down 22% year over year to 49,824. Nu Skin’s customer base dropped 11% to 1,239,384. The company’s paid affiliates were down 11% to 243,276.
Adjusted gross profit of $391.2 million declined 18.9% year over year, while the adjusted gross margin contracted 250 bps to 72.7%. The downside was due to product mix, inflation and foreign currency exchange. Nu Skin business’s adjusted gross margin contracted 190 bps to 76.7%.
Selling expenses declined to $216.5 million from $260.3 million reported in the prior-year quarter. As a percentage of revenues, the metric contracted 30 bps to 40.3% in the reported quarter. Nu Skin business’s selling expenses remained flat year over year at 43.5%. General and administrative expenses of $138 million declined from $156.5 million in the year-ago quarter. As a percentage of revenues, general and administrative expenses expanded 130 bps to 25.7%.
Adjusted operating income of $36.7 million declined from $65.4 million in the year-ago quarter. The adjusted operating margin contracted 340 bps to 6.8%.
Segmental Results
Segment-wise, revenues (at cc) declined 34% in Mainland China, 4% in the Americas, 11% in South Korea, 1% in Japan and 22% in EMEA. The metric rose 13% and 6% in the Southeast Asia/Pacific and Hong Kong/Taiwan regions, respectively. Total Nu Skin revenues fell 11% at cc from the prior-year quarter.
Other Financial Details
Nu Skin ended the quarter with cash and cash equivalents of $294.1 million, long-term debt of $382.3 million, and total stockholders' equity of $841.9 million.
In the reported quarter, the company paid out dividends of $19.3 million and repurchased $40 million worth of shares. With this, it currently has $185.4 million remaining under the current share repurchase authorization. In a recent development, management announced a dividend of 38.5 cents per share, payable on Dec 7, 2022, of shareholders’ record as of Nov 25.
Guidance
Nu Skin anticipates revenues of $2.20-$2.25 billion for 2022, suggesting a 16-18% decline from the year-ago period’s reported figure. The company envisions an unfavorable foreign currency impact of 5-7% on 2022 revenues. It earlier expected revenues of $2.33-$2.41 billion.
Management expects 2022 adjusted earnings of $2.40-$2.60 per share, down from the prior mentioned $3.30-$3.60. The current projection also suggests a decline from adjusted earnings of $4.14 reported last year.
For the fourth quarter, Nu Skin expects revenues between $500 million and $550 million, including an unfavorable foreign currency impact of 8-10%. The current revenue projection suggests an 18-26% decline from the year-ago quarter’s reported level. The company expects adjusted earnings of 40-60 cents a share for the fourth quarter, down from $1.11 reported in the year-ago period.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in estimates revision.
The consensus estimate has shifted -53.19% due to these changes.
VGM Scores
At this time, Nu Skin has a subpar Growth Score of D, a grade with the same score on the momentum front. However, the stock was allocated a grade of B on the value side, putting it in the second quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. It's no surprise Nu Skin has a Zacks Rank #4 (Sell). We expect a below average return from the stock in the next few months.
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
Nu Skin (NUS) Up 28.5% Since Last Earnings Report: Can It Continue?
It has been about a month since the last earnings report for Nu Skin Enterprises (NUS - Free Report) . Shares have added about 28.5% 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’s Q3 Earnings & Revenue Miss Estimate, View Cut
Nu Skin posted dismal third-quarter 2022 results. The top and bottom lines missed the Zacks Consensus Estimate and declined year over year. Results were affected by higher-than-anticipated macro headwinds, including prolonged COVID-related disruptions in Mainland China, sluggishness in South Korea, continued inflation and unfavorable currency.
Despite the tough environment, the company introduced ageLOC LumiSpa iO in the said quarter. This, along with the expansion of ageLOC Meta and Beauty Focus Collagen+ products, and further advancement of its social commerce initiatives, contributed to constant-currency growth in four of the company’s reporting segments.
NUS also remains focused on Nu Vision 2025 for driving long-term growth and shareholder value. It 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. As part of its EmpowerMe strategy, the company plans to launch its next connected device, ageLOC Body iO, in the second half of 2023. In the first half, it intends to roll out enhancements to its TR90 weight management and body shaping line with a more personalized approach called TRMe.
Q3 Highlights
Nu Skin’s third-quarter adjusted earnings of 47 cents a share declined 51.5% from $97 reported in the year-ago quarter. The metric lagged the Zacks Consensus Estimate of 78 cents.
Revenues of $537.8 million fell 16% year over year on a reported basis. Revenues included a negative impact of 7% from foreign currency fluctuations. On a constant-currency (cc) basis, revenues declined 9%. The top line lagged the Zacks Consensus Estimate of $570 million. Sales leaders were down 22% year over year to 49,824. Nu Skin’s customer base dropped 11% to 1,239,384. The company’s paid affiliates were down 11% to 243,276.
Adjusted gross profit of $391.2 million declined 18.9% year over year, while the adjusted gross margin contracted 250 bps to 72.7%. The downside was due to product mix, inflation and foreign currency exchange. Nu Skin business’s adjusted gross margin contracted 190 bps to 76.7%.
Selling expenses declined to $216.5 million from $260.3 million reported in the prior-year quarter. As a percentage of revenues, the metric contracted 30 bps to 40.3% in the reported quarter. Nu Skin business’s selling expenses remained flat year over year at 43.5%. General and administrative expenses of $138 million declined from $156.5 million in the year-ago quarter. As a percentage of revenues, general and administrative expenses expanded 130 bps to 25.7%.
Adjusted operating income of $36.7 million declined from $65.4 million in the year-ago quarter. The adjusted operating margin contracted 340 bps to 6.8%.
Segmental Results
Segment-wise, revenues (at cc) declined 34% in Mainland China, 4% in the Americas, 11% in South Korea, 1% in Japan and 22% in EMEA. The metric rose 13% and 6% in the Southeast Asia/Pacific and Hong Kong/Taiwan regions, respectively. Total Nu Skin revenues fell 11% at cc from the prior-year quarter.
Other Financial Details
Nu Skin ended the quarter with cash and cash equivalents of $294.1 million, long-term debt of $382.3 million, and total stockholders' equity of $841.9 million.
In the reported quarter, the company paid out dividends of $19.3 million and repurchased $40 million worth of shares. With this, it currently has $185.4 million remaining under the current share repurchase authorization. In a recent development, management announced a dividend of 38.5 cents per share, payable on Dec 7, 2022, of shareholders’ record as of Nov 25.
Guidance
Nu Skin anticipates revenues of $2.20-$2.25 billion for 2022, suggesting a 16-18% decline from the year-ago period’s reported figure. The company envisions an unfavorable foreign currency impact of 5-7% on 2022 revenues. It earlier expected revenues of $2.33-$2.41 billion.
Management expects 2022 adjusted earnings of $2.40-$2.60 per share, down from the prior mentioned $3.30-$3.60. The current projection also suggests a decline from adjusted earnings of $4.14 reported last year.
For the fourth quarter, Nu Skin expects revenues between $500 million and $550 million, including an unfavorable foreign currency impact of 8-10%. The current revenue projection suggests an 18-26% decline from the year-ago quarter’s reported level. The company expects adjusted earnings of 40-60 cents a share for the fourth quarter, down from $1.11 reported in the year-ago period.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in estimates revision.
The consensus estimate has shifted -53.19% due to these changes.
VGM Scores
At this time, Nu Skin has a subpar Growth Score of D, a grade with the same score on the momentum front. However, the stock was allocated a grade of B on the value side, putting it in the second quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. It's no surprise Nu Skin has a Zacks Rank #4 (Sell). We expect a below average return from the stock in the next few months.