Company updates capital allocation priorities,
announces dividend and provides initial outlook for Q1 and FY
2024
Nu Skin Enterprises Inc. (NYSE: NUS) today announced fourth
quarter and full-year 2023 results slightly above its latest
guidance.
Executive Summary Q4 2023 vs. Prior-year
Quarter
Revenue
$488.6 million; (6)%
- (1)% FX impact or $(7.2) million
- Rhyz revenue $65.1 million; 101%
Earnings Per Share
(EPS)
$0.15 or $0.37 excluding restructuring and
other charges, compared to $1.15 or $0.89 excluding restructuring
and impairment charges and a favorable tax rate in Q4 22
Customers
977,039; (15)%
Paid Affiliates
166,886; (30)% or (13)% excluding an
adjustment to eligibility requirements
Sales Leaders
44,059; (10)%
Executive Summary 2023 vs. 2022
Revenue:
$1.97 billion; (12)%
- (3)% FX impact or $(60.4) million
- Rhyz revenue $216.6 million; 41%
Earnings Per Share
(EPS):
$0.17 or $1.85 excluding inventory
write-off and other charges, compared to $2.07 or $2.90 excluding
restructuring and impairment charges
“While we continue to work toward our long-term vision of
becoming the world’s leading integrated beauty and wellness
platform, our progress was impacted by persistent macro-economic
pressures and disruptions associated with transforming our
business,” said Ryan Napierski, Nu Skin president and CEO. “This
was particularly evident with our fourth quarter results, which
were down in our Americas, South Korea and Europe & Africa
segments. This was offset by seasonal promotions in Mainland China,
stabilization in Japan and modest growth in our Hong Kong/Taiwan
segment. In addition, we achieved strong growth in our Rhyz
businesses, which accounted for 13 percent of our revenue in the
fourth quarter.
“We are committed to generating long-term enterprise value by
repositioning our company to win in the rapidly evolving beauty and
wellness industries by further transforming our core Nu Skin
business and accelerating investment in our rapidly growing Rhyz
ecosystem,” continued Napierski. “To enhance this transformation,
we are reassessing our approach to capital allocation to invest in
long-term growth and business evolution. This initiative aims to
grant us increased financial flexibility, enabling us to
effectively seize forthcoming growth opportunities. This includes
rebalancing our dividend payout ratio to be in line with or better
than our industry peers. With the additional available capital, we
will focus our investments relatively evenly across three key
initiatives: 1) accelerating the growth opportunities in Rhyz; 2)
facilitating a new market expansion model beginning with India
anticipated in 2025; and 3) furthering the build-out of our
digital-first affiliate opportunity platform. While we continue to
navigate the challenges of a business transformation amid these
disruptive times, we have fine-tuned our strategy and remain
confident in our ability to generate long-term growth and value for
shareholders.”
Q4 2023 Year-over-year Operating Results
Revenue
$488.6 million compared to $522.3
million
- (1)% FX impact or $(7.2) million
- Rhyz revenue $65.1 million; 101%
Gross Margin
72.1% compared to 71.7%
- Nu Skin business was 77.4% compared to 74.9%
Selling Expenses
37.1% compared to 38.5%
- Nu Skin business was 40.8% compared to 40.5%
G&A Expenses
29.7% compared to 24.4%
Operating Margin
3.3% or 6.4% excluding restructuring and
other charges compared to 5.3% or 8.8% excluding restructuring and
impairment charges
Other Expense
$(6.7) million compared to $(3.1)
million
Income Tax Rate
21.9% or 24.9% excluding restructuring and
other charges compared to (134.9)% or (3.7)% excluding
restructuring and impairment charges
EPS
$0.15 or $0.37 excluding restructuring and
other charges compared to $1.15 or $0.89 excluding restructuring
and impairment charges and a tax method change
Stockholder Value
Dividend Payments
$19.3 million
Stock Repurchases
$0.0 million
- $162.4 million remaining in authorization
Q1 and Full-year 2024 Outlook
Q1 2024 Revenue
$400 to $435 million; (17)% to (10)%
- Approximately (3) to (2)% FX impact
Q1 2024 EPS
$(0.07) to $0.03 or $0.00 to $0.10
non-GAAP
2024 Revenue
$1.73 to $1.87 billion; (12)% to (5)%
- Approximately (1)% FX impact
2024 EPS
$0.75 to $1.15 or $0.95 to $1.35
non-GAAP
“Our initial 2024 guidance assumes the global macro environment
remains challenging in the near-term, improving throughout the
year,” said James D. Thomas, chief financial officer. “Our annual
revenue guidance is $1.73 to $1.87 billion, with an approximate 1%
foreign currency headwind. We anticipate reported EPS of $0.75 to
$1.15 or adjusted earnings of $0.95 to $1.35, excluding charges
associated with our extended restructuring plan. Our guidance
reflects an anticipated higher global effective tax rate, primarily
due to the expected geographical mix of earnings during the year.
For the first quarter, we project revenue of $400 to $435 million,
assuming a negative foreign currency impact of approximately 3%,
with reported earnings per share of $(0.07) to $0.03 or $0.00 to
$0.10 excluding restructuring charges.”
Dividend Payout The Nu Skin Enterprises board of
directors has declared a quarterly cash dividend of $0.06 per
share, which will be paid on March 6, 2024, to shareholders of
record on Feb. 26, 2024.
Conference Call The Nu Skin Enterprises management team
will host a conference call with the investment community today at
5 p.m. (ET). Those wishing to access the webcast, as well as the
financial information presented during the call, can visit the
Investor Relations page on the company's website at ir.nuskin.com.
A replay of the webcast will be available on the same page through
Feb. 28, 2024.
About Nu Skin Enterprises Inc. The Nu Skin Enterprises
Inc. (NYSE: NUS) family of companies includes Nu Skin and Rhyz Inc.
Nu Skin is an integrated beauty and wellness company, powered by a
dynamic affiliate opportunity platform, which operates in nearly 50
markets worldwide. Backed by nearly 40 years of scientific
research, the company’s products help people look, feel and live
their best with brands including Nu Skin® personal care, Pharmanex®
nutrition and ageLOC® anti-aging, which includes an award-winning
line of beauty device systems. Formed in 2018, Rhyz is a
synergistic ecosystem of consumer, technology and manufacturing
companies focused on innovation within the beauty, wellness and
lifestyle categories.
Important Information Regarding Forward-Looking
Statements: This press release contains forward-looking
statements within the meaning of Section 27A of the Securities Act
of 1933, as amended, and Section 21E of the Securities Exchange Act
of 1934, as amended, that represent the company’s current
expectations and beliefs. All statements other than statements of
historical fact are “forward-looking statements” for purposes of
federal and state securities laws and include, but are not limited
to, statements of management’s expectations regarding the macro
environment and the company’s performance, growth and growth
opportunities, shareholder value, financial flexibility,
transformation, evolution, investments, initiatives, digital tools
and initiatives, and new market expansion; projections regarding
revenue, expenses, tax rates, earnings per share, foreign currency
fluctuations, future dividends, uses of cash and other financial
items; statements of belief; and statements of assumptions
underlying any of the foregoing. In some cases, you can identify
these statements by forward-looking words such as “believe,”
“expect,” “aim,” “commit,” “reposition,” “anticipate,”
“accelerate,” “project,” “vision,” “continue,” “outlook,”
“guidance,” “improve,” “will,” “would,” “could,” “may,” “might,”
the negative of these words and other similar words.
The forward-looking statements and related assumptions involve
risks and uncertainties that could cause actual results and
outcomes to differ materially from any forward-looking statements
or views expressed herein. These risks and uncertainties include,
but are not limited to, the following:
- any failure of current or planned initiatives or products to
generate interest among the company’s sales force and customers and
generate sponsoring and selling activities on a sustained
basis;
- risk that direct selling laws and regulations in any of the
company’s markets, including the United States and Mainland China,
may be modified, interpreted or enforced in a manner that results
in negative changes to the company’s business model or negatively
impacts its revenue, sales force or business, including through the
interruption of sales activities, loss of licenses, increased
scrutiny of sales force actions, imposition of fines, or any other
adverse actions or events;
- economic conditions and events globally;
- competitive pressures in the company’s markets;
- risk that epidemics, including COVID-19 and related
disruptions, or other crises could negatively impact our
business;
- adverse publicity related to the company’s business, products,
industry or any legal actions or complaints by the company’s sales
force or others;
- political, legal, tax and regulatory uncertainties, including
trade policies, associated with operating in Mainland China and
other international markets;
- uncertainty regarding meeting restrictions and other government
scrutiny in Mainland China, as well as negative media and consumer
sentiment in Mainland China on our business operations and
results;
- risk of foreign-currency fluctuations and the currency
translation impact on the company’s business associated with these
fluctuations;
- uncertainties regarding the future financial performance of the
businesses the company has acquired;
- risks related to accurately predicting, delivering or
maintaining sufficient quantities of products to support planned
initiatives or launch strategies, and increased risk of inventory
write-offs if the company over-forecasts demand for a product or
changes its planned initiatives or launch strategies;
- regulatory risks associated with the company’s products, which
could require the company to modify its claims or inhibit its
ability to import or continue selling a product in a market if the
product is determined to be a medical device or if the company is
unable to register the product in a timely manner under applicable
regulatory requirements; and
- the company’s future tax-planning initiatives, any prospective
or retrospective increases in duties or tariffs on the company’s
products imported into the company’s markets outside of the United
States, and any adverse results of tax audits or unfavorable
changes to tax laws in the company’s various markets.
The company’s financial performance and the forward-looking
statements contained herein are further qualified by a detailed
discussion of associated risks set forth in the documents filed by
the company with the Securities and Exchange Commission. The
forward-looking statements set forth the company’s beliefs as of
the date that such information was first provided, and the company
assumes no duty to update the forward-looking statements contained
in this release to reflect any change except as required by
law.
Non-GAAP Financial Measures: Constant-currency revenue
change is a non-GAAP financial measure that removes the impact of
fluctuations in foreign-currency exchange rates, thereby
facilitating period-to-period comparisons of the company’s
performance. It is calculated by translating the current period’s
revenue at the same average exchange rates in effect during the
applicable prior-year period and then comparing that amount to the
prior-year period’s revenue. The company believes that
constant-currency revenue change is useful to investors, lenders
and analysts because such information enables them to gauge the
impact of foreign-currency fluctuations on the company’s revenue
from period to period.
Earnings per share, operating margin and income tax rate, each
excluding inventory write-off charges, restructuring charges,
and/or other charges, also are non-GAAP financial measures.
Inventory write-off charges and restructuring charges are not part
of the ongoing operations of our underlying business, and the legal
accrual and non-recurring foreign tax charge that have been
excluded in the non-GAAP financial measures are not typical for our
ongoing operations. The company believes that these non-GAAP
financial measures are useful to investors, lenders and analysts
because removing the impact of these charges facilitates
period-to-period comparisons of the company’s performance. Please
see the reconciliations of these items to our earnings per share,
operating margin and income tax rate calculated under GAAP,
below.
The following table sets forth revenue for the three-month
periods ended December 31, 2023, and 2022 for each of our
reportable segments (U.S. dollars in thousands):
Three Months Ended
December 31,
Constant-Currency
2023
2022
Change
Change
Nu Skin
Americas
$
97,753
$
128,921
(24)%
(19)%
Mainland China
71,516
73,935
(3)%
(2)%
Southeast Asia/Pacific
66,889
76,606
(13)%
(12)%
South Korea
48,380
60,029
(19)%
(22)%
Japan
50,966
53,877
(5)%
(1)%
Europe & Africa
47,892
55,337
(13)%
(18)%
Hong Kong/Taiwan
41,209
39,789
4%
5%
Nu Skin other
(1,066)
1,525
(170)%
(170)%
Total Nu Skin
423,539
490,019
(14)%
(12)%
Rhyz
Manufacturing
50,363
29,560
70%
70%
Rhyz other
14,738
2,761
434%
434%
Total Rhyz
65,101
32,321
101%
101%
Total
$
488,640
$
522,340
(6)%
(5)%
The following table sets forth revenue for the years ended
December 31, 2023, and 2022 for each of our reportable segments
(U.S. dollars in thousands):
Year Ended December
31,
Constant-Currency
2023
2022
Change
Change
Nu Skin
Americas
$
398,222
$
508,537
(22)%
(18)%
Mainland China
298,079
360,389
(17)%
(13)%
Southeast Asia/Pacific
267,206
344,411
(22)%
(21)%
South Korea
236,099
268,707
(12)%
(11)%
Japan
207,833
224,896
(8)%
(1)%
Europe & Africa
192,352
204,275
(6)%
(8)%
Hong Kong/Taiwan
153,589
157,197
(2)%
1%
Nu Skin other
-858
3,959
(122)%
(122)%
Total Nu Skin
1,752,522
2,072,371
(15)%
(13)%
Rhyz
Manufacturing
181,395
149,458
21%
21%
Rhyz other
35,214
3,830
819%
819%
Total Rhyz
216,609
153,288
41%
41%
Total
$
1,969,131
$
2,225,659
(12)%
(9)%
The following table provides information concerning the number
of Customers, Paid Affiliates and Sales Leaders in our core Nu Skin
business for the three-month periods ended December 31, 2023, and
2022:
Year Ended December
31,
2023
2022
Change
Customers
Americas
231,183
299,287
(23)%
Mainland China
207,276
202,933
2%
Southeast Asia/Pacific
106,471
141,183
(25)%
South Korea
103,151
123,749
(17)%
Japan
113,670
119,152
(5)%
Europe & Africa
163,178
197,917
(18)%
Hong Kong/Taiwan
52,110
62,903
(17)%
Total Customers
977,039
1,147,124
(15)%
Paid Affiliates
Americas
31,910
42,633
(25)%
Mainland China
25,889
23,436
10%
Southeast Asia/Pacific
34,404
38,653
(11)%
South Korea(1)
22,166
45,058
(51)%
Japan(1)
22,417
38,021
(41)%
Europe & Africa(1)
18,888
31,869
(41)%
Hong Kong/Taiwan(1)
11,212
17,286
(35)%
Total Paid Affiliates
166,886
236,956
(30)%
Sales Leaders
Americas
7,126
9,594
(26)%
Mainland China
11,296
12,359
(9)%
Southeast Asia/Pacific
6,418
6,999
(8)%
South Korea
5,249
6,094
(14)%
Japan
7,086
5,936
19%
Europe & Africa
3,968
4,740
(16)%
Hong Kong/Taiwan
2,916
3,015
(3)%
Total Sales Leaders
44,059
48,737
(10)%
(1) The December 31, 2023, number is affected by a change in
eligibility requirements for receiving certain rewards within our
compensation structure. We plan to implement these changes in
additional segments over the next several quarters. We estimate the
change in eligibility requirements resulted in a reduction of
approximately 14 thousand, 15 thousand, 6 thousand and 3 thousand
for South Korea, Japan, Europe & Africa and Hong Kong/Taiwan,
respectively.
- “Customers” are persons who have purchased directly from the
Company during the three months ended as of the date indicated. Our
Customer numbers include members of our sales force who made such a
purchase, including Paid Affiliates and those who qualify as Sales
Leaders, but they do not include consumers who purchase directly
from members of our sales force.
- “Paid Affiliates” are any Brand Affiliates, as well as members
of our sales force in Mainland China, who earned sales compensation
during the three-month period. In all of our markets besides
Mainland China, we refer to members of our independent sales force
as “Brand Affiliates” because their primary role is to promote our
brand and products through their personal social networks.
- “Sales Leaders” are the three-month average of our monthly
Brand Affiliates, as well as sales employees and independent
marketers in Mainland China, who achieved certain qualification
requirements as of the end of each month of the quarter.
NU SKIN ENTERPRISES,
INC.
Consolidated Statements of
Income (Unaudited)
(U.S. dollars in thousands,
except per share amounts)
Three Months Ended December
31,
Year Ended December
31,
2023
2022
2023
2022
Revenue
$
488,640
$
522,340
$
1,969,131
$
2,225,659
Cost of sales
136,215
147,816
611,850
630,915
Gross profit
352,425
374,524
1,357,281
1,594,744
Operating expenses:
Selling expenses
181,326
201,031
742,365
879,634
General and administrative expenses
145,033
127,664
546,858
555,769
Restructuring and impairment expenses
10,003
18,370
19,790
48,494
Total operating expenses
336,362
347,065
1,309,013
1,483,897
Operating income (loss)
16,063
27,459
48,268
110,847
Other income (expense), net
(6,735
)
(3,104
)
(21,690
)
(21,877
)
Income (loss) before provision for income
taxes
9,328
24,355
26,578
88,970
Provision (benefit) for income taxes
2,046
(32,860
)
17,983
(15,808
)
Net income (loss)
$
7,282
$
57,215
$
8,595
$
104,778
Net income (loss) per share:
Basic
$
0.15
$
1.16
$
0.17
$
2.10
Diluted
$
0.15
$
1.15
$
0.17
$
2.07
Weighted-average common shares outstanding
(000s):
Basic
49,411
49,452
49,711
50,002
Diluted
49,479
49,783
49,860
50,525
NU SKIN ENTERPRISES,
INC.
Consolidated Balance Sheets
(Unaudited)
(U.S. dollars in thousands)
December 31,
2023
December 31,
2022
ASSETS
Current assets:
Cash and cash equivalents
$
256,057
$
264,725
Current investments
11,759
13,784
Accounts receivable, net
72,879
47,360
Inventories, net
279,978
346,183
Prepaid expenses and other
81,198
87,816
Total current assets
701,871
759,868
Property and equipment, net
432,965
444,806
Operating lease right-of-use assets
90,107
98,734
Goodwill
230,768
206,432
Other intangible assets, net
105,309
66,701
Other assets
245,443
244,429
Total assets
$
1,806,463
$
1,820,970
LIABILITIES AND STOCKHOLDERS’
EQUITY
Current liabilities:
Accounts payable
$
43,505
$
53,963
Accrued expenses
260,366
280,280
Current portion of long-term debt
25,000
25,000
Total current liabilities
328,871
359,243
Operating lease liabilities
70,943
76,540
Long-term debt
478,040
377,466
Other liabilities
106,641
110,425
Total liabilities
984,495
923,674
Commitments and contingencies
Stockholders’ equity:
Class A common stock – 500 million shares
authorized, $0.001 par value, 90.6 million shares issued
91
91
Additional paid-in capital
621,853
613,278
Treasury stock, at cost – 41.1 million and
41.1 million shares
(1,570,440
)
(1,569,061
)
Accumulated other comprehensive loss
(100,006
)
(86,509
)
Retained earnings
1,870,470
1,939,497
Total stockholders' equity
821,968
897,296
Total liabilities and stockholders’
equity
$
1,806,463
$
$
1,820,970
NU SKIN ENTERPRISES, INC.
Reconciliation of Operating Margin Excluding Impact of Certain
Charges to GAAP Operating Margin (in thousands, except for per
share amounts)
Three months ended December
31,
Year ended December
31,
2023
2022
2023
2022
Operating Income
$
16,063
$
27,459
$
48,268
$
110,847
Impact of inventory write-off
-
-
65,728
26,905
Impact of restructuring and impairment
10,003
18,370
19,790
48,494
Impact of other charges(2)
5,260
-
5,260
-
Adjusted operating income
$
31,326
$
45,829
$
139,046
$
186,246
Operating margin
3.3
%
5.3
%
2.5
%
5.0
%
Operating margin, excluding impact of
certain charges
6.4
%
8.8
%
7.1
%
8.4
%
Revenue
$
488,640
$
522,340
$
1,969,131
$
2,225,659
NU SKIN ENTERPRISES, INC.
Reconciliation of Effective Tax Rate Excluding Impact of Certain
Charges to GAAP Effective Tax Rate (in thousands, except for
per share amounts)
Three months ended December
31,
Year ended December
31,
2023
2022
2023
2022
Provision (benefit) for income taxes
$
2,046
$
(32,860
)
$
17,983
$
(15,808
)
Impact of certain charges on provision for
income taxes
4,081
31,284
7,324
42,838
Provision for income taxes, excluding
impact of certain charges
$
6,127
$
(1,576
)
$
25,307
$
27,030
Income before provision for income
taxes
9,328
24,355
26,578
88,970
Impact of inventory write-off
-
-
65,728
26,905
Impact of restructuring and impairment
10,003
18,370
19,790
48,494
Impact of other charges(2)
5,260
-
5,260
-
Impact of charges associated with our exit
from Grow Tech:
Unrealized investment loss
-
-
-
9,009
Income before provision for income taxes,
excluding impact of certain charges
$
24,591
$
42,725
$
117,356
$
173,378
Effective tax rate
21.9
%
(134.9
)%
67.7
%
(17.8
)%
Effective tax rate, excluding impact of
certain charges
24.9
%
(3.7
)%
21.6
%
15.6
%
NU SKIN ENTERPRISES, INC.
Reconciliation of Earnings Per Share Excluding Impact of Certain
Charges to GAAP Earnings Per Share (in thousands, except for
per share amounts)
Three months ended December
31,
Year ended December
31,
2023
2022
2023
2022
Net income
$
7,282
$
57,215
$
8,595
$
104,778
Impact of restructuring and inventory
write-off expense:
Restructuring and impairment
10,003
18,370
19,790
48,494
Inventory write-off
-
-
65,728
26,905
Tax impact
(3,088
)
903
(6,331
)
(9,566
)
Impact of other charges: (2)
Impact of other charges
5,260
5,260
Tax impact
(993
)
-
(993
)
-
Impact of charges associated with our exit
from Grow Tech:
Unrealized loss on investment
-
-
-
9,009
Tax impact
-
-
-
(1,085
)
Tax impact
-
(32,187
)
-
(32,187
)
Adjusted net income
$
18,464
$
44,301
$
92,049
$
146,348
Diluted earnings per share
$
0.15
$
1.15
$
0.17
$
2.07
Diluted earnings per share, excluding
impact of certain charges
$
0.37
$
0.89
$
1.85
$
2.90
Weighted-average common shares outstanding
(000)
49,479
49,783
49,860
50,525
(2) Other charges consist of a legal contingency ($3.0 million)
and a non-recurring foreign tax charge ($2.3 million) that were
recorded in the fourth quarter of 2023.
NU SKIN ENTERPRISES, INC.
Reconciliation of Earnings Per Share Excluding Impact of
Restructuring to GAAP Earnings Per Share
Three months ended March
31,
Year ended December
31,
2024 - Low-end
2024 High-end
2024 - Low-end
2024 High-end
Earnings Per Share
$
(0.07
)
$
0.03
$
0.75
$
1.15
Impact of restructuring expense:
Restructuring
0.10
0.10
0.30
0.30
Tax impact
(0.03
)
(0.03
)
(0.10
)
(0.10
)
Adjusted EPS
$
-
$
0.10
$
0.95
$
1.35
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version on businesswire.com: https://www.businesswire.com/news/home/20240214526617/en/
Media: media@nuskin.com, (801) 345-6397 Investors:
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Nu Skin Enterprises (NYSE:NUS)
Graphique Historique de l'Action
De Jan 2025 à Fév 2025
Nu Skin Enterprises (NYSE:NUS)
Graphique Historique de l'Action
De Fév 2024 à Fév 2025
