NUS
$80.33
Nu Skin Enterprises
$.31
.39%
Earnings Details
2nd Quarter June 2018
Thursday, August 2, 2018 4:17:00 PM
Tweet Share Watch
Summary

Nu Skin Enterprises Beats

Nu Skin Enterprises (NUS) reported 2nd Quarter June 2018 earnings of $1.08 per share on revenue of $704.2 million. The consensus earnings estimate was $0.90 per share on revenue of $642.8 million. The Earnings Whisper number was $0.94 per share. Revenue grew 28.0% on a year-over-year basis.

The company said it expects third quarter earnings of $0.93 to $0.98 per share on revenue of $650.0 million to $670.0 million. The current consensus earnings estimate is $0.91 per share on revenue of $646.6 million for the quarter ending September 30, 2018. The company said it expects 2018 earnings of $3.50 to $3.65 per share on revenue of $2.63 billion to $2.67 billion. The company's previous guidance was earnings of $3.73 to $3.93 per share on revenue of $2.51 billion to $2.56 billion and the current consensus earnings estimate is $3.65 per share on revenue of $2.54 billion for the year ending December 31, 2018.

Nu Skin Enterprises Inc is a direct selling company, which develops and distributes anti-aging personal care products and nutritional supplements that are sold under the Nu Skin and Pharmanex category brands.

Results
Reported Earnings
$1.08
Earnings Whisper
$0.94
Consensus Estimate
$0.90
Reported Revenue
$704.2 Mil
Revenue Estimate
$642.8 Mil
Growth
Earnings Growth
Revenue Growth
Power Rating
Grade
Earnings Release

Nu Skin Enterprises Reports 28 Percent Second-Quarter Revenue Growth And Raises Annual Guidance

PROVO, Utah, Aug. 2, 2018 /PRNewswire/ -- Nu Skin Enterprises, Inc. (NYSE: NUS) today announced strong second-quarter financial results with revenue of $704.2 million, up 28 percent over the prior-year period, and earnings per share of $0.90, a 17 percent increase over the prior-year period. Quarterly earnings were negatively impacted by a foreign currency translation loss of $0.13 and a $0.05 purchase accounting charge.

Nu Skin Logo (PRNewsfoto/Nu Skin Enterprises, Inc.)

Executive Summary

Q2 2018 vs. Prior-Year Quarter

Revenue:

$704.2 million, +28%

     • Core Nu Skin business +24%, including +4% fx impact

     • Acquired companies +4%

Earnings Per Share (EPS):

$0.90, +17%, including:

     • ($0.13) foreign currency translation loss

     • ($0.05) purchase accounting charge

Sales Leaders:

71,300, +21%

Customers:

1,148,000, +8%

"We continue to successfully execute on our customer growth strategy centered on engaging platforms, enabling products and empowering programs, which led to accelerated growth," said Ritch Wood, chief executive officer. "Our customers grew by 8 percent and sales leaders grew by 21 percent, and we saw healthy revenue generation throughout the business, highlighted by double-digit increases in Mainland China, Southeast Asia and the Americas and Pacific. We are also pleased with the solid performance of our acquired businesses, which we anticipate will show increased benefits in our future results."

Q2 2018 Year-Over-Year Operating Results

Revenue:

$704.2 million compared to $550.1 million

Gross Margin:

76.1% compared to 77.9%

     • Core Nu Skin business 77.9%

Selling Expenses:

38.7% of revenue compared to 41.5%

G&A Expenses:

25.6% of revenue compared to 24.6%

Operating Margin:

11.8% compared to 11.8%

Other Income / (Expense):

($11.2) million compared to ($2.7) million

Income Tax Rate:

28.8% compared to 32.2%

EPS:

$0.90, +17%, including:

     • ($0.13) foreign currency translation loss

     • ($0.05) purchase accounting charge

Stockholder Value

Dividend Payments:

$20.3 million

Stock Repurchases:

$18.4 million; $500 million available with new authorization

Q3 and 2018 Outlook

Q3 Revenue:

$650 to $670 million, 15% to 19% growth

     • Approximately (3%) fx impact

Q3 EPS:

$0.93 to $0.98, 22% to 29% growth

     • Includes ($0.04) purchase accounting charge

2018 Revenue:

$2.63 to $2.67 billion, 15% to 17% growth

     • Estimated +1% fx impact

     • Increase from prior outlook of $2.51 to $2.56 billion, which included a +3% fx impact

2018 EPS:

$3.50 to $3.65, including ($0.13) fx and ($0.16) purchase accounting charges

"Based on our strong first-half results, with double-digit growth in both the first and second quarters, we now see revenue growth of approximately 15 to 17 percent for the year," said Wood. "We will continue to invest in social selling capabilities, product innovation and the ongoing rollout of our Velocity sales compensation program. We expect these initiatives, coupled with the capability improvements we are making through development and recent acquisitions, will drive additional upside. As a testament of our confidence in the strength of the business, our board of directors approved an increase to our stock repurchase authorization to $500 million."

"We generated 28 percent year-over-year revenue growth and strong earnings performance in the quarter," said Mark Lawrence, chief financial officer. "For the year, we are increasing our annual revenue guidance by $120 million to $2.63 billion to $2.67 billion with earnings per share of $3.50 to $3.65. This guidance includes $0.16 in purchase accounting charges and the $0.13 foreign currency translation loss from the second quarter. We are projecting third-quarter revenue of $650 to $670 million, including a negative 3 percent currency impact, and earnings per share of $0.93 to $0.98."

Conference Call

The Nu Skin management team will host a conference call with the investment community on Aug. 2, 2018, 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 at the same URL through Aug. 16, 2018.

About Nu Skin Enterprises, Inc.

Founded more than 30 years ago, Nu Skin Enterprises, Inc. develops and distributes innovative consumer products, offering a comprehensive line of premium-quality beauty and wellness solutions. The company builds upon its scientific expertise in both skin care and nutrition to continually develop innovative product brands that include the Nu Skin® personal care brand, the Pharmanex® nutrition brand, and most recently, the ageLOC® anti-aging brand. The ageLOC brand has generated a loyal following for such products as the ageLOC LumiSpa skin cleansing and treatment device, ageLOC Youth nutritional supplement, the ageLOC Me® customized skin care system, as well as the ageLOC TR90® weight management and body shaping system. Nu Skin sells its products through a global network of sales leaders in Asia, the Americas, Europe, Africa and the Pacific. As a long-standing member of direct selling associations globally, Nu Skin is committed to the industry's consumer guidelines that protect and support those who sell and purchase its products through the direct selling channel. Nu Skin is traded on the New York Stock Exchange under the symbol "NUS." More information is available at nuskin.com.

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 company's performance, growth, strategies and initiatives; projections regarding revenue, earnings per share, foreign currency fluctuations 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," "project," "anticipate," "estimate," "intend," "plan," "continue," "targets," "likely," "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:

  • adverse publicity related to the company's business, products, industry or any legal actions or complaints by the company's sales force or others;
  • risk that direct selling laws and regulations in any of our markets, including the United States and Mainland China, may be modified, interpreted or enforced in a manner that results in negative changes to our business model or negatively impacts our revenue, sales force or business, including through the interruption of sales activities, loss of licenses, imposition of fines, or any other adverse actions or events;
  • 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 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 company's recent acquisitions;
  • risks related to accurately predicting, delivering or maintaining sufficient quantities of products to support our 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 the company's ability to import or continue selling a product in a market if it is determined to be a medical device or if it is unable to register the product in a timely manner under applicable regulatory requirements;
  • unpredictable economic conditions and events globally;
  • uncertainties related to the trade disputes between the U.S. and Mainland China, and associated risks if the trade disputes are prolonged or worsen, or additional changes or actions are taken by the two countries with respect to trade policies, that could further adversely impact exchange rates, the economies of both markets and consumer sentiment;
  • uncertainties related to interpretation of, and forthcoming regulations under, the recently enacted U.S. tax reform legislation; the company's future tax-planning initiatives; any prospective or retrospective increases in duties 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; and
  • continued competitive pressures in the company's 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 growth 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 this amount to the prior-year period's revenue.

The Company's revenue results by segment for the three-month periods ended June 30 are presented in the following table (in thousands).



2018


2017


%
Change


Constant
Currency
% Change










Mainland China


$              245,256


$                172,098


43%


33%

Americas/Pacific


103,990


82,997


25%


31%

South Korea


91,624


86,917


5%


1%

Southeast Asia


79,223


60,545


31%


28%

Japan


64,113


64,796


(1%)


(3%)

Hong Kong/Taiwan


52,206


43,071


21%


21%

EMEA


44,010


38,188


15%


7%

Other


23,768


1,489


1,496%


1,496%










Total


$              704,190


$                550,101


28%


24%

The Company's revenue results by segment for the six-month periods ended June 30 are presented in the following table (in thousands).



2018


2017


%
Change


Constant
Currency
% Change










Mainland China


$              442,787


$              322,102


37%


27%

Americas/Pacific


196,279


154,422


27%


31%

South Korea


180,554


169,388


7%


1%

Southeast Asia


150,083


123,570


21%


18%

Japan


127,337


125,952


1%


(2%)

Hong Kong/Taiwan


93,198


79,019


18%


16%

EMEA


88,991


72,252


23%


11%

Other


41,180


2,495


1,551%


1,551%










Total


$           1,320,409


$           1,049,200


26%


21%

The company's Customers and Sales Leaders statistics by segment for the three-month periods ended June 30 are presented in the following table.


2018


2017


% Increase (Decrease)



Customers


Sales
Leaders


Customers


Sales
Leaders


Customers


Sales
Leaders














Mainland China


209,000


33,400


207,000


22,600


1%


48%

Americas/Pacific


265,000


9,000


230,000


7,800


15%


15%

South Korea


184,000


6,900


188,000


7,700


(2%)


(10%)

Southeast Asia


135,000


7,500


104,000


6,300


30%


19%

Japan


132,000


6,000


134,000


6,400


(1%)


(6%)

Hong Kong/Taiwan


76,000


4,200


68,000


3,900


12%


8%

EMEA


147,000


4,300


129,000


4,200


14%


2%














Total


1,148,000


71,300


1,060,000


58,900


8%


21%

_____________________

"Customers" are persons who purchased products directly from the company during the previous three months.


"Sales Leaders" are independent distributors, and sales employees and independent marketers in China, who achieve certain qualification requirements.

 

NU SKIN ENTERPRISES, INC.

Consolidated Statements of Income (Unaudited)

For the Second Quarters Ended June 30, 2018 and 2017

(in thousands, except per share amounts)






2018


2017





Revenue

$               704,190


$               550,101





Cost of sales

168,549


121,521





Gross profit

535,641


428,580





Operating expenses:




        Selling expenses

272,757


228,353

        General and administrative expenses

180,120


135,488

Total operating expenses

452,877


363,841





Operating income

82,764


64,739





Other income (expense), net

(11,165)


(2,731)

Income before provision for income taxes

71,599


62,008

Provision for income taxes

20,638


19,967





Net income

$                 50,961


$                 42,041





Net income per share:




        Basic

$                    0.92


$                    0.79

        Diluted

$                    0.90


$                    0.77





Weighted average common shares outstanding:




        Basic

55,608


52,929

        Diluted

56,713


54,839

 

NU SKIN ENTERPRISES, INC.

Consolidated Statements of Income (Unaudited)

For the Six-Month Periods Ended June 30, 2018 and 2017

(in thousands, except per share amounts)






2018


2017





Revenue

$            1,320,409


$            1,049,200





Cost of sales

314,830


232,787





Gross profit

1,005,579


816,413





Operating expenses:




        Selling expenses

530,459


437,361

        General and administrative expenses

333,366


268,051

Total operating expenses

863,825


705,412





Operating income

141,754


111,001





Other income (expense), net

(9,958)


(7,298)

Income before provision for income taxes

131,796


103,703

Provision for income taxes

45,296


34,173





Net income

$                 86,500


$                 69,530





Net income per share:




        Basic

$                     1.58


$                     1.32

        Diluted

$                     1.53


$                     1.28





Weighted average common shares outstanding:




        Basic

54,807


52,804

        Diluted

56,430


54,466

 

NU SKIN ENTERPRISES, INC.

Consolidated Balance Sheets (Unaudited)

(in thousands)






June 30, 2018


December 31, 2017

ASSETS




Current assets:




        Cash and cash equivalents

$                402,031


$                426,399

        Current investments

8,200


11,847

        Accounts receivable

50,180


33,196

        Inventories, net

283,730


253,454

        Prepaid expenses and other

70,898


52,893


815,039


777,789





Property and equipment, net

503,452


464,587

Goodwill

187,423


114,954

Other intangible assets, net

95,887


67,647

Other assets

144,562


164,895

                Total assets

$             1,746,363


$             1,589,872





LIABILITIES AND STOCKHOLDERS' EQUITY




Current liabilities:




        Accounts payable

$                  58,920


$                  50,341

        Accrued expenses

290,653


319,189

        Current portion of long-term debt

97,481


77,840


447,054


447,370





Long-term debt

370,525


310,790

Other liabilities

125,250


127,116

                Total liabilities

942,829


885,276





Stockholders' equity:




        Class A common stock

91


91

        Additional paid-in capital

532,996


466,349

       Treasury stock, at cost

(1,296,628)


(1,304,694)

        Accumulated other comprehensive loss

(75,460)


(66,318)

        Retained earnings

1,642,535


1,609,168


803,534


704,596

                Total liabilities and stockholders' equity

$             1,746,363


$             1,589,872

Nu Skin Social Media Channels
 fb.com/nuskin   twitter.com/nuskin   instagram.com/nuskin

 

Cision View original content with multimedia:http://www.prnewswire.com/news-releases/nu-skin-enterprises-reports-28-percent-second-quarter-revenue-growth-and-raises-annual-guidance-300691384.html

SOURCE Nu Skin Enterprises, Inc.