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NUS Stock Hurt by Customer Acquisition Challenges: How to Play Ahead?
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Nu Skin Enterprises, Inc. (NUS - Free Report) continues to grapple with significant headwinds, ranging from persistent macroeconomic challenges to a sluggish direct selling environment. These pressures, compounded by unexpected foreign currency fluctuations, have weighed heavily on the company’s performance, particularly in its premium product lines.
All of these factors led to a drab second-quarter 2024 performance. Considering the company’s first-half 2024 performance and rising foreign exchange headwinds, management also tightened the annual guidance range for 2024 in its second-quarter earnings release. With growing concerns surrounding consumer spending, currency volatility and industry-specific obstacles, Nu Skin's outlook remains clouded.
Factors Stealing Glitter off Nu Skin
Nu Skin has been encountering persistent macroeconomic obstacles, which continued in the second quarter of 2024. The company’s performance was hurt by continuous macroeconomic headwinds across most regions, which weighed on consumer spending and customer acquisition, especially for premium products. NUS grappled with pressures in the direct selling industry.
These headwinds, along with foreign adverse currency fluctuations, hurt Nu Skin’s quarterly revenues, which tumbled 12.2% year over year to $439.1 million in the second quarter. On a constant-currency basis, revenues fell 8%. Sales leaders were down 16% year over year to 38,592. Nu Skin’s customer base dropped 14% to 893,514. The company’s paid affiliates were down 17% to 155,486. On an adjusted basis, paid affiliates tumbled 9%.
Nu Skin’s strong international presence exposes it to the risk of volatile currency movements. Any adverse currency fluctuation is likely to weigh on the company’s operating performance. Nu Skin’s second-quarter 2024 revenues witnessed strong currency headwinds. Revenues included a negative impact of 4.2% from foreign currency fluctuations. The company envisions unfavorable foreign currency impacts of around 4-3% on third-quarter and 2024 revenues.
What to Expect From NUS in 2024?
The operating environment for Nu Skin's core business remains challenging due to macroeconomic factors and pressures within the direct selling industry. Nu Skin now anticipates revenues in the band of $1.73-$1.81 billion for 2024, which suggests a 12-8% decline from the year-ago period’s reported figure. Earlier, the metric was expected in the range of $1.73-$1.87 billion. Management envisions adjusted earnings per share (EPS) of 75-95 cents. The projection suggests a decline from adjusted earnings of $1.85 recorded in 2023. Management had earlier envisioned an adjusted EPS of 95 cents to $1.35 for 2024.
For the third quarter of 2024, the company expects revenues between $430 million and $465 million, which calls for a decline of 14% to 7% from the year-ago quarter’s reported level. NUS expects adjusted earnings in the band of 15-25 cents a share in the third quarter compared with 56 cents recorded in the same period last year.
NUS Outlook: More Pain Ahead?
Reflecting the negative sentiment around Nu Skin, the Zacks Consensus Estimate for EPS has seen downward revisions. Over the past 30 days, analysts have lowered their estimates for both the current quarter and fiscal year by 58.3% and 29.1% to 20 cents per share and 78 cents, respectively. These estimates indicate year-over-year declines of 64.3% and 57.8%, respectively.
Image Source: Zacks Investment Research
NUS Stock Lags the Market
Shares of Nu Skin have slumped 44.9% in the past three months compared with the industry’s 24.9% decline. This beauty and wellness product company has trailed the broader Zacks Consumer Staples sector and the S&P 500’s respective growth of 7.6% and 0.1%. NUS is also trading below its 50 and 200-day moving averages, indicating potential weakness in the stock's momentum.
Image Source: Zacks Investment Research
What’s Next for NUS Stock’s Investors?
Nu Skin is actively implementing strategic initiatives aimed at revitalizing its market presence and driving growth, with a focus on new product launches and the strength of its Rhyz business. However, these efforts may require time to deliver meaningful results. In the near term, a combination of persistent macroeconomic headwinds and industry-specific challenges, coupled with more conservative guidance, signals that Nu Skin may face a tough path forward. Considering these factors and the recent stock price trends, investors should approach NUS with caution. Nu Skin currently holds a Zacks Rank #5 (Strong Sell).
Better-Ranked Staple Stocks
Here, we have highlighted three better-ranked food stocks, namely The Chef's Warehouse (CHEF - Free Report) , Ollie's Bargain Outlet (OLLI - Free Report) and Flowers Foods (FLO - Free Report) .
CHEF has a trailing four-quarter earnings surprise of 33.7%, on average. The Zacks Consensus Estimate for The Chef’s Warehouse’s current fiscal year sales and earnings indicates growth of 9.7% and 12.6%, respectively, from the year-ago reported numbers.
Ollie's Bargain, the extreme-value retailer of brand-name merchandise, carries a Zacks Rank #2 (Buy). OLLI has a trailing four-quarter earnings surprise of 7.9%, on average.
The Zacks Consensus Estimate for Ollie's Bargain’s current financial-year sales and earnings suggests a rise of around 8.7% and 12.7%, respectively, from the year-earlier figures.
Flowers Foods, one of the largest producers of packaged bakery foods in the United States, currently carries a Zacks Rank #2. FLO has a trailing four-quarter earnings surprise of 1.9%, on average.
The Zacks Consensus Estimate for Flowers Foods’ current financial-year sales and earnings implies growth of around 1.1% and 4.2%, respectively, from the year-ago reported numbers.
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NUS Stock Hurt by Customer Acquisition Challenges: How to Play Ahead?
Nu Skin Enterprises, Inc. (NUS - Free Report) continues to grapple with significant headwinds, ranging from persistent macroeconomic challenges to a sluggish direct selling environment. These pressures, compounded by unexpected foreign currency fluctuations, have weighed heavily on the company’s performance, particularly in its premium product lines.
All of these factors led to a drab second-quarter 2024 performance. Considering the company’s first-half 2024 performance and rising foreign exchange headwinds, management also tightened the annual guidance range for 2024 in its second-quarter earnings release. With growing concerns surrounding consumer spending, currency volatility and industry-specific obstacles, Nu Skin's outlook remains clouded.
Factors Stealing Glitter off Nu Skin
Nu Skin has been encountering persistent macroeconomic obstacles, which continued in the second quarter of 2024. The company’s performance was hurt by continuous macroeconomic headwinds across most regions, which weighed on consumer spending and customer acquisition, especially for premium products. NUS grappled with pressures in the direct selling industry.
These headwinds, along with foreign adverse currency fluctuations, hurt Nu Skin’s quarterly revenues, which tumbled 12.2% year over year to $439.1 million in the second quarter. On a constant-currency basis, revenues fell 8%. Sales leaders were down 16% year over year to 38,592. Nu Skin’s customer base dropped 14% to 893,514. The company’s paid affiliates were down 17% to 155,486. On an adjusted basis, paid affiliates tumbled 9%.
Nu Skin’s strong international presence exposes it to the risk of volatile currency movements. Any adverse currency fluctuation is likely to weigh on the company’s operating performance. Nu Skin’s second-quarter 2024 revenues witnessed strong currency headwinds. Revenues included a negative impact of 4.2% from foreign currency fluctuations. The company envisions unfavorable foreign currency impacts of around 4-3% on third-quarter and 2024 revenues.
What to Expect From NUS in 2024?
The operating environment for Nu Skin's core business remains challenging due to macroeconomic factors and pressures within the direct selling industry. Nu Skin now anticipates revenues in the band of $1.73-$1.81 billion for 2024, which suggests a 12-8% decline from the year-ago period’s reported figure. Earlier, the metric was expected in the range of $1.73-$1.87 billion. Management envisions adjusted earnings per share (EPS) of 75-95 cents. The projection suggests a decline from adjusted earnings of $1.85 recorded in 2023. Management had earlier envisioned an adjusted EPS of 95 cents to $1.35 for 2024.
For the third quarter of 2024, the company expects revenues between $430 million and $465 million, which calls for a decline of 14% to 7% from the year-ago quarter’s reported level. NUS expects adjusted earnings in the band of 15-25 cents a share in the third quarter compared with 56 cents recorded in the same period last year.
NUS Outlook: More Pain Ahead?
Reflecting the negative sentiment around Nu Skin, the Zacks Consensus Estimate for EPS has seen downward revisions. Over the past 30 days, analysts have lowered their estimates for both the current quarter and fiscal year by 58.3% and 29.1% to 20 cents per share and 78 cents, respectively. These estimates indicate year-over-year declines of 64.3% and 57.8%, respectively.
Image Source: Zacks Investment Research
NUS Stock Lags the Market
Shares of Nu Skin have slumped 44.9% in the past three months compared with the industry’s 24.9% decline. This beauty and wellness product company has trailed the broader Zacks Consumer Staples sector and the S&P 500’s respective growth of 7.6% and 0.1%. NUS is also trading below its 50 and 200-day moving averages, indicating potential weakness in the stock's momentum.
Image Source: Zacks Investment Research
What’s Next for NUS Stock’s Investors?
Nu Skin is actively implementing strategic initiatives aimed at revitalizing its market presence and driving growth, with a focus on new product launches and the strength of its Rhyz business. However, these efforts may require time to deliver meaningful results. In the near term, a combination of persistent macroeconomic headwinds and industry-specific challenges, coupled with more conservative guidance, signals that Nu Skin may face a tough path forward. Considering these factors and the recent stock price trends, investors should approach NUS with caution. Nu Skin currently holds a Zacks Rank #5 (Strong Sell).
Better-Ranked Staple Stocks
Here, we have highlighted three better-ranked food stocks, namely The Chef's Warehouse (CHEF - Free Report) , Ollie's Bargain Outlet (OLLI - Free Report) and Flowers Foods (FLO - Free Report) .
The Chef’s Warehouse, which engages in the distribution of specialty food products, currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
CHEF has a trailing four-quarter earnings surprise of 33.7%, on average. The Zacks Consensus Estimate for The Chef’s Warehouse’s current fiscal year sales and earnings indicates growth of 9.7% and 12.6%, respectively, from the year-ago reported numbers.
Ollie's Bargain, the extreme-value retailer of brand-name merchandise, carries a Zacks Rank #2 (Buy). OLLI has a trailing four-quarter earnings surprise of 7.9%, on average.
The Zacks Consensus Estimate for Ollie's Bargain’s current financial-year sales and earnings suggests a rise of around 8.7% and 12.7%, respectively, from the year-earlier figures.
Flowers Foods, one of the largest producers of packaged bakery foods in the United States, currently carries a Zacks Rank #2. FLO has a trailing four-quarter earnings surprise of 1.9%, on average.
The Zacks Consensus Estimate for Flowers Foods’ current financial-year sales and earnings implies growth of around 1.1% and 4.2%, respectively, from the year-ago reported numbers.