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Nu Skin (NUS) Down More Than 25% in 3 Months: Here's Why
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Nu Skin Enterprises, Inc. (NUS - Free Report) has been grappling with persistent macroeconomic hurdles, with inflation putting pressure on consumer spending and customer acquisition globally. Apart from this, adverse currency fluctuations have been a concern for Nu Skin. Management expects the global macro landscape to remain difficult in the near term, though it is likely to keep improving through 2024.
Shares of this Zacks Rank #5 (Strong Sell) company have slumped 27.3% in the past three months against the industry’s growth of 19.7%.
Macroeconomic Setbacks
Nu Skin has been encountering persistent macroeconomic obstacles, which continued in the fourth quarter of 2023. Results in the Americas, South Korea, Europe and Southeast Asia regions were impacted by consumers increasingly gravitating toward lower-cost products and services, altering their purchasing patterns. Disruptions related to business transformation and currency headwinds also weighed on Nu Skin’s results.
Image Source: Zacks Investment Research
Quarterly revenues of $488.6 million fell around 6% year over year in the fourth quarter. Sales leaders were down 10% year over year to 44,059. Nu Skin’s customer base dropped 15% to 977,039. The company’s paid affiliates were down 30% to 166,866. On an adjusted basis, paid affiliates tumbled 13%.
Volatile Currency Movements
Nu Skin’s strong international presence exposes it to the risk of volatile currency movements. In the fourth quarter of 2023, revenues included a negative impact of 1% from foreign currency fluctuations. The company envisions unfavorable foreign currency impacts of 1% on 2024 revenues. It expects an unfavorable foreign currency impact of nearly 3-2% on first-quarter revenues.
Challenging Outlook
On its fourth-quarter 2023 earnings call, management stated that it expects to see continued pressure on consumer spending due to the lingering hyperinflationary scenario worldwide. This and unfavorable currency translations continue to remain hurdles. Nu Skin anticipates revenues in the band of $1.73-$1.87 billion for 2024, suggesting a 12-5% decline from the year-ago period’s reported figure.
Management envisions an adjusted EPS of 95 cents to $1.35. The projection suggests a decline from adjusted earnings of $1.85 recorded in 2023. Nu Skin’s bottom-line view reflects expectations of an increased global tax rate.
For the first quarter of 2024, Nu Skin expects revenues between $400 million and $435 million, which suggests a decline of 17% to 10% from the year-ago quarter’s reported level. Nu Skin expects the bottom line to range between a loss of 7 cents and earnings of 3 cents per share for the first quarter.
Wrapping Up
Nu Skin is dedicated to creating long-term enterprise value by realigning its focus to thrive in the dynamic beauty and wellness space. To this end, it plans to divide its investments evenly among three core initiatives, which include speeding up growth prospects in Rhyz, implementing a novel market expansion strategy — starting with India — expected to commence in 2025, and advancing the development of its digital-first affiliate opportunity platform.
While these initiatives bode well, the abovementioned macroeconomic bottlenecks cannot be ignored in the near term.
The Zacks Consensus Estimate for Post Holdings’ current financial-year sales and earnings indicates growth of 15.2% and 3.4%, 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 (Buy). 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.
Lamb Weston (LW - Free Report) , a frozen potato product company, currently carries a Zacks Rank #2. LW has a trailing four-quarter earnings surprise of 28.8%, on average.
The Zacks Consensus Estimate for Lamb Weston’s current fiscal year sales and earnings suggests growth of 28.3% and 26.9%, respectively, from the year-ago period numbers.
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Nu Skin (NUS) Down More Than 25% in 3 Months: Here's Why
Nu Skin Enterprises, Inc. (NUS - Free Report) has been grappling with persistent macroeconomic hurdles, with inflation putting pressure on consumer spending and customer acquisition globally. Apart from this, adverse currency fluctuations have been a concern for Nu Skin. Management expects the global macro landscape to remain difficult in the near term, though it is likely to keep improving through 2024.
Shares of this Zacks Rank #5 (Strong Sell) company have slumped 27.3% in the past three months against the industry’s growth of 19.7%.
Macroeconomic Setbacks
Nu Skin has been encountering persistent macroeconomic obstacles, which continued in the fourth quarter of 2023. Results in the Americas, South Korea, Europe and Southeast Asia regions were impacted by consumers increasingly gravitating toward lower-cost products and services, altering their purchasing patterns. Disruptions related to business transformation and currency headwinds also weighed on Nu Skin’s results.
Image Source: Zacks Investment Research
Quarterly revenues of $488.6 million fell around 6% year over year in the fourth quarter. Sales leaders were down 10% year over year to 44,059. Nu Skin’s customer base dropped 15% to 977,039. The company’s paid affiliates were down 30% to 166,866. On an adjusted basis, paid affiliates tumbled 13%.
Volatile Currency Movements
Nu Skin’s strong international presence exposes it to the risk of volatile currency movements. In the fourth quarter of 2023, revenues included a negative impact of 1% from foreign currency fluctuations. The company envisions unfavorable foreign currency impacts of 1% on 2024 revenues. It expects an unfavorable foreign currency impact of nearly 3-2% on first-quarter revenues.
Challenging Outlook
On its fourth-quarter 2023 earnings call, management stated that it expects to see continued pressure on consumer spending due to the lingering hyperinflationary scenario worldwide. This and unfavorable currency translations continue to remain hurdles. Nu Skin anticipates revenues in the band of $1.73-$1.87 billion for 2024, suggesting a 12-5% decline from the year-ago period’s reported figure.
Management envisions an adjusted EPS of 95 cents to $1.35. The projection suggests a decline from adjusted earnings of $1.85 recorded in 2023. Nu Skin’s bottom-line view reflects expectations of an increased global tax rate.
For the first quarter of 2024, Nu Skin expects revenues between $400 million and $435 million, which suggests a decline of 17% to 10% from the year-ago quarter’s reported level. Nu Skin expects the bottom line to range between a loss of 7 cents and earnings of 3 cents per share for the first quarter.
Wrapping Up
Nu Skin is dedicated to creating long-term enterprise value by realigning its focus to thrive in the dynamic beauty and wellness space. To this end, it plans to divide its investments evenly among three core initiatives, which include speeding up growth prospects in Rhyz, implementing a novel market expansion strategy — starting with India — expected to commence in 2025, and advancing the development of its digital-first affiliate opportunity platform.
While these initiatives bode well, the abovementioned macroeconomic bottlenecks cannot be ignored in the near term.
3 Solid Consumer Staple Picks
Post Holdings (POST - Free Report) , a consumer-packaged goods holding company, currently sports a Zacks Rank #1 (Strong Buy). POST has a trailing four-quarter earnings surprise of 52.2%, on average. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Post Holdings’ current financial-year sales and earnings indicates growth of 15.2% and 3.4%, 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 (Buy). 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.
Lamb Weston (LW - Free Report) , a frozen potato product company, currently carries a Zacks Rank #2. LW has a trailing four-quarter earnings surprise of 28.8%, on average.
The Zacks Consensus Estimate for Lamb Weston’s current fiscal year sales and earnings suggests growth of 28.3% and 26.9%, respectively, from the year-ago period numbers.