Yahoo Finance Why Is Nu Skin (NUS) Down 9.2% Since Last Earnings Report?
It has been about a month since the last earnings report for Nu Skin Enterprises (NUS). Shares have lost about 9.2% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Nu Skin due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.
Nu Skin Q4 Earnings Top Estimates, Sales Down Y/Y
Nu Skin posted fourth-quarter 2022 results, with the top and the bottom line declining year over year. Revenues missed the Zacks Consensus Estimate while earnings surpassed the same. Management expects its global macro environment to remain challenging in the near term, reflected in its 2023 view.
Nu Skin’s fourth-quarter adjusted earnings of 89 cents a share declined from $1.11 reported in the year-ago quarter. Nevertheless, the metric surpassed the Zacks Consensus Estimate of 53 cents.
Revenues of $522.3 million fell 22% year over year on a reported basis. Revenues included a negative impact of 7% from foreign currency fluctuations. The top line lagged the Zacks Consensus Estimate of $543.8 million. Sales leaders were down 21% year over year to 48,737. Nu Skin’s customer base dropped 16% to 1,147,124. The company’s paid affiliates were down 13% to 236,956.
Adjusted gross profit of $374.5 million declined from $506.3 million reported in the year-ago quarter. Gross margin, excluding restructuring impact, came in at 71.7%, down from 75.2% reported in the year-ago quarter. The downside was due to unfavorable currency rates, global inflationary pressures and geographic footprint. Nu Skin business’ gross margin came in at 74.9%, down from 77.9% reported in the year-ago quarter.
Selling expenses declined to $201 million from $263.3 million reported in the prior-year quarter. As a percentage of revenues, the metric was 38.5%, down from 39.1% reported in the year-ago quarter. Nu Skin business’ selling expenses were 40.5% compared with 41.4% in the prior-year quarter. General and administrative expenses of $127.7 million declined from $164.2 million in the year-ago quarter. As a percentage of revenues, general and administrative expenses remained flat year over year at 24.4%.
Adjusted operating income of $45.8 million declined from $78.8 million in the year-ago quarter. The adjusted operating margin contracted to 8.8% from 11.7% reported in the year-ago quarter.
Segment-wise, revenues (at cc) declined 7%, 37%, 8%, 26%, 9% and 10% in Americas, Mainland China, Southeast Asia/Pacific, South Korea, EMEA and Hong Kong/Taiwan, respectively. The same rose 6% in Japan. Total Nu Skin revenues fell 15% at cc from the prior-year quarter.
Other Financial Details & Guidance
Nu Skin ended the quarter with cash and cash equivalents of $264.7 million, long-term debt of $377.5 million, and total stockholders' equity of $897.3 million. In the reported quarter, the company paid out dividends of $19 million and repurchased $10 million worth of shares. With this, it currently has $175.4 million remaining under the current share repurchase authorization. In a recent development, management announced a dividend hike to 39 cents per share. The increased dividend will be paid on Mar 8, 2023, to shareholders record as of Feb 27.
Nu Skin anticipates revenues of $2.03-$2.18 billion for 2023, suggesting a 2-9% decline from the year-ago period’s reported figure. The company envisions an unfavorable foreign currency impact of 1-2% on 2023 revenues.
Management expects 2023 adjusted earnings of $2.35-$2.75 per share. The current projection suggests a decline from adjusted earnings of $2.90 reported last year.
For the first quarter, Nu Skin expects revenues between $450 million and $490 million, including an unfavorable foreign currency impact of 5-6%. The current revenue projection suggests a 19-26% decline from the year-ago quarter’s reported level. The company expects adjusted earnings of 25-35 cents a share for the first quarter.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in estimates review.
The consensus estimate has shifted -57.81% due to these changes.
VGM Scores
Currently, Nu Skin has a nice Growth Score of B, though it is lagging a lot on the Momentum Score front with a D. However, the stock was allocated a grade of B on the value side, putting it in the second quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. It's no surprise Nu Skin has a Zacks Rank #4 (Sell). We expect a below average return from the stock in the next few months.
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Nu Skin Enterprises, Inc. (NUS) : Free Stock Analysis Report