Back to top

Image: Bigstock

Nu Skin's (NUS) Q1 Earnings Beat Estimates, Decline Y/Y

Read MoreHide Full Article

Nu Skin Enterprises, Inc. (NUS - Free Report) released first-quarter 2020 results, with earnings and sales declining year over year. Reduced sales leaders, especially in Mainland China, hurt quarterly results. Also, Nu Skin continued to battle foreign currency headwinds. Nevertheless, both the top and the bottom line surpassed the Zacks Consensus Estimate.

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


Q1 Highlights

Nu Skin delivered quarterly earnings of 36 cents a share, which beat the Zacks Consensus Estimate of 24 cents. However, the bottom line tumbled 53% from earnings of 77 cents reported in the year-ago quarter.

Revenues of $518 million fell 17% year over year. Nevertheless, the metric surpassed the Zacks Consensus Estimate of $474 million. First-quarter revenues included a negative impact of 2% (or $14.3 million) from foreign currency fluctuations. Also, a reduced sales leader count due to declines across all regions hurt revenues.

Sales leaders were 49,551, down 22% year over year, with Mainland China accounting for majority of the decline. In fact, sales leaders deteriorated in all regions. Further, Nu Skin’s customer base fell 5% year over year to 1,130,947, with declines in all regions except Southeast Asia (up 5% year over year) and Mainland China (flat year over year).

Gross profit came in at $392.2 million, down 17.8% from the year-ago quarter’s figure. Gross margin contracted 80 basis points (bps) year over year to 75.7%. Nu Skin’s base business gross margin expanded 60 bps on a year-over-year basis to 78.1%.

Selling expenses amounted to $206 million, which accounted for 39.8% of revenues compared with 40% in the year-ago quarter. Meanwhile, general and administrative expenses of $149.6 million accounted for 28.9% of revenues, up from 25.4% in the year-ago quarter.

Operating income came in at $36.6 million, while operating margin fell year over year from 11% to 7.1%.

Regional Results

Revenues declined across all regions from the prior-year quarter’s level. The highest drop was witnessed in Mainland China, where the metric fell 34%. Further, revenues fell 14% in the Americas/Pacific, 10% in South Korea, 4% in Southeast Asia, 12% in Hong Kong/Taiwan, 1% in Japan and 15% in EMEA.

Other Financial Details

Nu Skin ended the quarter with cash and cash equivalents of $352.6 million, long-term debt of $327.2 million and stockholders' equity of $800.5 million. During the quarter, the company paid out dividends of $20.7 million.

In a separate press release, Nu Skin announced a dividend of 37.5 cents per share payable on Jun 10, to shareholders of record as of May 29.

Guidance

Nu Skin continues to focus on improving sales leaders through technological advancements. Moreover, the company has been witnessing improved trends in Mainland China region as restrictions related to contain the spread of coronavirus are being lifted gradually. Management expects this trend to continue in other markets globally. This along with global preview of its new beauty device, late in 2020, is likely to enable the company to return to growth by the year end.

Management expects 2020 revenues in the range of $2.17-$2.26 billion, including currency headwinds of 2-3%. In 2019, Nu Skin’s revenues amounted to $2.42 billion. Prior to this, the company had anticipated 2020 revenues of $2.17-$2.30 billion, including currency headwinds of 1-2%.

Further, 2020 earnings are projected in the range of $2.05-$2.35 per share, which indicates a decline from $3.10 delivered in the prior-year quarter. Earlier, Nu Skin had envisioned earnings in the range of $2.00-$2.40 per share. The Zacks Consensus Estimate for 2020 earnings is currently pegged at $2.03 per share.

For the second quarter, thecompany projects revenues in the band of $520-$550 million that includes adverse currency impacts of 3-4%. Earnings are anticipated between 42 cents and 52 cents. The Zacks Consensus Estimate for first-quarter earnings is currently pegged at 42 cents per share.

Price Performance

Shares of this Zacks Rank #3 (Hold) company have lost 48.2% in the past year compared with the industry’s decline of 29.6%.

 



Some Solid Consumer Staple Stocks

General Mills (GIS - Free Report) has a long-term earnings growth rate of 7.5% and a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Campbell Soup Company (CPB - Free Report) has a long-term earnings growth rate of 7.2% and a Zacks Rank #2.

Conagra Brands (CAG - Free Report) has a long-term earnings growth rate of 7% and a Zacks Rank #2.

5 Stocks Set to Double

Each was hand-picked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2020. Each comes from a different sector and has unique qualities and catalysts that could fuel exceptional growth.

Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.

Today, See These 5 Potential Home Runs >>