Nu Skin Enterprises Reports 42 Percent EPS Growth And 15 Percent Revenue Growth In The Second Quarter

Company News

Printer Friendly Version View printer-friendly version << Back
August 4, 2021 at 4:06 PM EDT

Nu Skin Enterprises Reports 42 Percent EPS Growth And 15 Percent Revenue Growth In The Second Quarter

PROVO, Utah, Aug. 4, 2021 /PRNewswire/ -- Nu Skin Enterprises, Inc. (NYSE: NUS) today announced second-quarter 2021 revenue of $704.1 million and earnings per share (EPS) of $1.15 driven by an increase in operating margin of 260 basis points.

Executive Summary
Q2 2021 vs. Prior-year Quarter

Revenue:

$704.1 million; +15%

·  +6% fx impact or $36.9 million

Earnings Per Share
(EPS):

$1.15; +42%

Sales Leaders:

64,228; +15%

Customers:

1,467,617; (2%)

"Our growth and success this quarter and over the past year reflect our strategy of delivering world-class beauty and wellness products, being customer obsessed, and digitally enabling our business," said Ritch Wood, chief executive officer. "Our performance was led by continued growth in our beauty device systems and further adoption of social commerce. In addition, we significantly improved profitability during the quarter, which led to strong earnings per share growth. We have a solid foundation in place, and I am fully confident in Ryan and our leadership team to build on the momentum and take Nu Skin to the next level."

Ryan Napierski, president and CEO-elect, added, "We continue to advance our vision of becoming the world's leading beauty and wellness company, powered by our dynamic affiliate opportunity platform. During the quarter, we strengthened our position as the market leader in beauty device systems as our latest device system, ageLOC Boost, generated momentum with a strong launch in EMEA. Additionally, we are pleased with the rollout of Nutricentials Bioadaptives, which is targeted at a millennial/Gen Z consumer. In the back half of the year, we will be begin rolling out Beauty Focus Collagen+, which leverages our unique strength in both beauty and wellness, and ageLOC Meta, our next significant Pharmanex product introduction.

"We are pleased with 15 percent growth in sales leaders, while customers declined slightly due to a significant surge in the prior year. To better support our affiliates with customer acquisition, we will be rolling out additional digital tools over the next several quarters such as personalized social commerce shops in Mainland China. This represents a significant step forward in deploying our digital tools in the world's largest social commerce market."

Q2 2021 Year-over-year Operating Results                                                                                  

Revenue:

$704.1 million compared to $612.4 million

·  +6% fx impact

Gross Margin:

75.6% compared to 74.8%

·  Nu Skin business was 78.3% compared to 77.6%

Selling Expenses:

39.5% compared to 40.6%

·  Nu Skin business was 42.4% compared to 43.3%

G&A Expenses:

24.0% compared to 24.7%

Operating Margin:

12.1% compared to 9.5%

Other Income /
(Expense):

($4.0) million compared to $1.6 million

Income Tax Rate:

27.1% compared to 29.8%

·  Benefited by geographic mix

EPS:

$1.15 compared to $0.81

Stockholder Value

Dividend Payments:

$19.0 million

Stock Repurchases:

$10.0 million

·  $265.4 million remaining in authorization

Q3 and Full-year 2021 Outlook

Q3 2021 Revenue:

$700 to $730 million; 0 to 4%

·  Approximately +2 to 3% fx impact

Q3 2021 EPS:

$1.10 to $1.20; +2 to 11%

2021 Revenue:

$2.81 to $2.87 billion; +9 to 11%

·  Approximately +3 to 4% fx impact

2021 EPS:

$4.30 to $4.50; +18 to 24%

Mark Lawrence, chief financial officer, added, "We reported 42 percent EPS growth driven by strong improvements in both gross margin and operating margin as a result of continued expense control and supply chain efficiency. We are raising our EPS guidance for the year as we continue to focus on generating enhanced value for our shareholders."

About Nu Skin Enterprises, Inc. 

Founded more than 35 years ago, Nu Skin Enterprises, Inc. (NSE) empowers innovative companies with sustainable solutions, opportunities, technologies and life-improving values. The company currently focuses its efforts around innovative consumer products, product manufacturing and controlled environment agriculture technology. The NSE family of companies includes Nu Skin, which develops and distributes a comprehensive line of premium-quality beauty and wellness solutions through a global network of sales leaders in Asia, the Americas, Europe, Africa and the Pacific; and Rhyz, our strategic investment arm that includes a collection of sustainable manufacturing and technology innovation companies. Nu Skin Enterprises is traded on the New York Stock Exchange under the symbol "NUS." More information is available at nuskinenterprises.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, shareholder value, vision, product pipeline and product introductions, digital tools, customers and sales leaders, affiliates, 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," "anticipate," "project," "outlook," "guidance," "plan," "forecast," "expand," "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:

  • risk that epidemics, including the ongoing COVID-19 pandemic, and 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;
  • 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, 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;
  • political, legal, tax and regulatory uncertainties associated with operating in international markets, including Mainland China;
  • 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;
  • unpredictable economic conditions and events globally, including trade policies and tariffs;
  • 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 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.

The following table sets forth revenue for the three-month periods ended June 30, 2021 and 2020 for each of our reportable segments (U.S. dollars in thousands):


Three Months Ended

June 30,




Constant-

Currency


2021


2020


Change


Change

Nu Skin












Mainland China

$

154,182


$

146,332



5%



(4)%

Americas/Pacific


151,730



127,919



19%



14%

South Korea


88,604



76,915



15%



6%

EMEA


83,115



50,776



64%



49%

Southeast Asia


70,751



66,829



6%



2%

Japan


68,020



68,291





1%

Hong Kong/Taiwan


38,529



37,161



4%



Nu Skin other


755



(85) 



988%



988%

Total Nu Skin


655,686



574,138



14%



8%

Rhyz Investments












Manufacturing


48,140



37,918



27%



27%

Grow Tech


191



310



(38)%



(38)%

Rhyz other


38









Total Rhyz Investments


48,369



38,228



27%



27%

Total

$

704,055


$

612,366



15%



9%

 

The following table sets forth revenue for the six-month periods ended June 30, 2021 and 2020 for each of our reportable segments (U.S. dollars in thousands):

 


Six Months Ended

June 30,




Constant-

Currency


2021


2020


Change


Change

Nu Skin












Mainland China

$

303,775


$

284,028



7%



(2)%

Americas/Pacific


301,195



202,492



49%



45%

South Korea


169,735



152,634



11%



3%

EMEA


159,295



86,179



85%



69%

Southeast Asia


138,336



136,415



1%



(2)%

Japan


137,884



129,591



6%



6%

Hong Kong/Taiwan


74,874



72,988



3%



(1)%

Nu Skin other


1,460



688



112%



112%

Total Nu Skin


1,286,554



1,065,015



21%



15%

Rhyz Investments












Manufacturing


94,125



65,065



45%



45%

Grow Tech


364



314



16%



16%

Rhyz other


38









Total Rhyz Investments


94,527



65,379



45%



45%

Total

$

1,381,081


$

1,130,394



22%



16%

 

The company's Customers and Sales Leaders statistics by segment as of June 30, 2021 and 2020 are presented in the following table:

 


As of

June 30, 2021


As of

June 30, 2020


% Increase
(Decrease)


Customers


Sales Leaders


Customers


Sales Leaders


Customers


Sales Leaders

Mainland China


328,526



18,647



321,946



17,104



2%



9%

Americas/Pacific


397,685



13,078



424,236



10,787



(6)%



21%

South Korea


153,287



7,935



159,926



6,881



(4)%



15%

EMEA


261,857



7,900



247,057



5,120



6%



54%

Southeast Asia


135,610



7,141



155,822



6,790



(13)%



5%

Japan


125,791



6,053



125,332



6,011





1%

Hong Kong/Taiwan


64,861



3,474



65,581



3,343



(1)%



4%

Total


1,467,617



64,228



1,499,900



56,036



(2)%



15%

 

"Customers" are persons who purchased products directly from the company during the previous three months. Our Customer numbers do not include consumers who purchase products directly from members of our sales force.

"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)

(U.S. dollars in thousands, except per share amounts)

 


Three Months Ended

June 30,


Six Months Ended

June 30,


2021


2020


2021


2020













Revenue

$

704,055


$

612,366


$

1,381,081


$

1,130,394

Cost of sales


171,975



154,110



342,541



279,903

Gross profit


532,080



458,256



1,038,540



850,491













Operating expenses:












Selling expenses


277,893



248,628



551,639



454,670

General and administrative expenses


168,811



151,554



338,612



301,182

Total operating expenses


446,704



400,182



890,251



755,852













Operating income


85,376



58,074



148,289



94,639

Other income (expense), net


(4,012)



1,581



(2,430)



(4,593)













Income before provision for income taxes


81,364



59,655



145,859



90,046

Provision for income taxes


22,026



17,804



39,091



28,465













Net income

$

59,338


$

41,851


$

106,768


$

61,581













Net income per share:












Basic

$

1.18


$

0.81


$

2.12


$

1.15

Diluted

$

1.15


$

0.81


$

2.06


$

1.15













Weighted-average common shares outstanding (000s):












Basic


50,115



51,872



50,409



53,466

Diluted


51,557



51,925



51,850



53,502

 

 

NU SKIN ENTERPRISES, INC.

Consolidated Balance Sheets (Unaudited)

(U.S. dollars in thousands)

 


June 30,  
2021


December 31,
2020

ASSETS




Current assets:




Cash and cash equivalents

$

354,759


$

402,683

Current investments


24,499



21,216

Accounts receivable, net


64,701



63,370

Inventories, net


390,977



314,366

Prepaid expenses and other


126,586



101,563

 Total current assets


961,522



903,198







Property and equipment, net


474,167



468,181

Operating lease right-of-use assets


136,738



155,104

Goodwill


215,582



202,979

Other intangible assets, net


98,955



89,532

Other assets


163,016



138,082

Total assets

$

2,049,980


$

1,957,076







LIABILITIES AND STOCKHOLDERS' EQUITY






Current liabilities:






Accounts payable

$

60,632


$

66,174

Accrued expenses


403,165



446,682

Current portion of long-term debt


152,500



30,000

 Total current liabilities


616,297



542,856







Operating lease liabilities 


100,826



112,275

Long-term debt


288,343



305,393

Other liabilities


126,688



102,281

Total liabilities


1,132,154



1,062,805







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


586,976



579,801

Treasury stock, at cost – 40.4 million and 39.7 million shares


(1,509,867)



(1,461,593)

Accumulated other comprehensive loss


(68,553)



(64,768)

Retained earnings


1,909,179



1,840,740

Total stockholders' equity


917,826



894,271

Total liabilities and stockholders' equity

$

2,049,980


$

1,957,076

 

Cision View original content to download multimedia:https://www.prnewswire.com/news-releases/nu-skin-enterprises-reports-42-percent-eps-growth-and-15-percent-revenue-growth-in-the-second-quarter-301348610.html

SOURCE Nu Skin Enterprises

Media: media@nuskin.com, (801) 345-6397, Investors: investorrelations@nuskin.com, (801) 345-3577