Nu Skin’s quarterly earnings met Wall Street expectations despite challenges in Greater China, the company’s largest business segment.
Revenue remained relatively flat on a constant currency basis at $571.3 million. Reported earnings totaled 28 cents per share, reflecting a $37.9 million inventory write-down charge in China and a resulting higher tax rate, as well as a foreign currency impact of 13 cents a share. Actual earnings of 84 cents per share were in line with average estimates by analysts.
Earlier this month, Utah-based Nu Skin lowered its revenue guidance to the range of $570 million to $573 million, citing foreign currency challenges and soft demand in China. Management reported lower-than-expected sales of the company’s cosmetic oils, which may reflect economic uncertainty in the wider Chinese market. The company also pulled back on product promotions previously used to cut inventory levels.
“Looking forward, we believe the Greater China business will benefit by focusing sales leaders on the upcoming launch of our ageLOC Me skincare system rather than focusing on discounted product promotions. These factors resulted in a decision to take an inventory write-down charge,” CEO Truman Hunt said in a statement.
On a constant currency basis, revenue from the company’s skincare and nutrition products fell 15 percent to $188.6 million in Greater China. North Asia revenue dipped 6 percent to $167.7 million, while South Asia/Pacific rose 44 percent to $108.9 million. Revenue from Europe, the Middle East and Africa rose 4 percent to $35.3 million, while the Americas inched upward 2 percent in constant currency to $70.8 million.
Management expects fourth quarter revenue in the $570 million to $590 million range, with earnings per share of 70 cents to 73 cents. The company also increased its share repurchase program by $260 million to $500 million. Nu Skin stock rose nearly 10 percent in Friday trading to close the day at $38.21.
