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Is a Beat in Store for Nu Skin (NUS) this Earnings Season?

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Nu Skin Enterprises, Inc. (NUS - Free Report) is set to report second-quarter 2017 results on Aug 2, after closing bell. The question lingering in investors’ minds is, whether this leading beauty company will be able to deliver a positive earnings surprise in the to-be-reported quarter.

The company’s earnings outpaced the Zacks Consensus Estimate in three out of the trailing four quarters, with an average beat of 8.3%.

We note that Nu Skin has exhibited a bullish run in the past year. Its shares outperformed both the industry and the broader sector. The stock has gained 18.7%, against the industry’s fall of 13.4%. Moreover, the Consumer Staples sector, of which they are part of, rose 1.1% over the same time frame.

Let’s see how things are shaping up prior to this announcement.

What Does the Zacks Model Unveil?

Our proven model shows that Nu Skin is likely to beat earnings estimates this quarter. A stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. You may uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Nu Skin has an Earnings ESP of +2.86% as the Most Accurate Estimate of 72 cents is pegged higher than the Zacks Consensus Estimate of 70 cents. This combined with the company’s Zacks Rank #2 make us reasonably confident of an earnings beat.

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

 

Estimates Trend and Factors at Play

A look at the estimate revision gives us an idea regarding analyst’s expectations before the company releases its earnings. The Zacks Consensus Estimate for the second quarter has remained stable over the past 30 days at 70 cents. The same for fiscal 2017 has declined by a penny to $3.07. The Zacks Consensus Estimate for the to-be-reported quarter and fiscal year depict a year-over-year decline of 11.1% and 0.9%, respectively. Management expects earnings for 2017 in the band of $3.10–$3.25 per share and 65–70 cents for the second quarter.

Further, analysts polled by Zacks expect revenues of $546.8 million for the quarter under review, a decline of 8.9% from the year-ago period.  The same for fiscal 2017 is pegged at $2.3 billion which is at the upper end of the management’s projected range of $2.26–$2.30 billion.

Sales of Nu Skin’s ageLOC Me and ageLOC Youth products was solid in the first quarter of 2017. This has encouraged management to schedule the launch of ageLOC LumiSpa product in the fourth quarter of 2017 that is expected to generate roughly $100 million in revenues. Moreover, the company has also been witnessing robust growth in the Mainland China, South Asia/Pacific and EMEA regions. Further, Nu Skin remains on track with its innovations and product launches which will boost sales and expand customer base.

However, currency headwind remains a major concern for the company, which is expected to hurt second-quarter revenues in between 1–2% range.

Still Interested in Consumer Staples Stocks? Check these

Here are some companies in the Consumer Staple sector you may want to consider as our model shows that these have the right combination of elements to post an earnings beat:

Tyson Foods, Inc. (TSN - Free Report) has an Earnings ESP of +1.64% and carries a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.

Church & Dwight Company, Inc. (CHD - Free Report) has an Earnings ESP of +2.56% and carries a Zacks Rank #2.

Kellogg Company (K - Free Report) has an Earnings ESP of +2.17% and carries a Zacks Rank #2.

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