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Nu Skin (NUS) Looks Troubled on Volatile Currency Movements

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·4 min read
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Nu Skin Enterprises, Inc. NUS appears in troubled waters. The company has been battling global uncertainties like rising pandemic-related factors, unfavorable currency rates and geopolitical conflicts. These headwinds weighed on its first-quarter 2022 performance, leading to a lowered guidance for 2022.

The Zacks Consensus Estimate for 2022 earnings per share (EPS) has gone down from $4.29 to $3.80 over the past 30 days. Shares of this Zacks Rank #4 (Sell) company have dropped 3.9% in the past three months compared with the industry’s decline of 13.2%.

Let’s delve deeper.

Nu Skin Enterprises, Inc. Price, Consensus and EPS Surprise

Nu Skin Enterprises, Inc. Price, Consensus and EPS Surprise
Nu Skin Enterprises, Inc. Price, Consensus and EPS Surprise

Nu Skin Enterprises, Inc. price-consensus-eps-surprise-chart | Nu Skin Enterprises, Inc. Quote

Downsides

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. In the first quarter of 2022, revenues included a negative impact of 3% of foreign currency fluctuations. NUS envisions an unfavorable currency impact of 3% to 4% on revenues in 2022.

In the first quarter of 2022, the top and bottom lines declined year over year. Revenues of $604.9 million fell 11% year over year on a reported basis. On a constant-currency (cc) basis, revenues declined 8%. Nu Skin reported quarterly earnings of 76 cents per share, down 16% from the 91 cents reported in the year-ago quarter. Sales leaders were down 22% year over year to 52,462. Nu Skin’s customer base dropped 13% to 1,321,451. The company’s paid affiliates were down 14% to 251,436.

Nu Skin highlighted that the quarterly performance was hurt by pandemic-led lockdowns and other factors across Mainland China. The situation in Ukraine hampered the company’s performance in the EMEA. The company suspended its operations in Russia and Ukraine. In the Americas, strength in U.S. operations was countered by macroeconomic headwinds in Latin America. Management revised its 2022 revenue and earnings guidance downward considering global uncertainties like rising pandemic-related factors, unfavorable currency rates and geopolitical conflicts.

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Zacks Investment Research


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The company now anticipates 2022 revenues in the range of $2.51-$2.62 billion, calling for a 3-7% decline from the year-ago period’s reported figure. The company earlier anticipated revenues in the range of $2.66-$2.77 billion, calling for a 1% decline to 3% growth from the year-ago period’s reported figure. Management now expects the 2022 EPS in the range of $3.60-$3.90, indicating an increase of 26-36% on a reported basis. The metric is expected to fall 6-13% on an adjusted basis. Earlier, management expected the EPS in the range of $4.05-$4.45.

For the second quarter of 2022, the company projects revenues in the range of $590-$620 million, which suggests a 12-16% decline from the year-ago quarter’s level. The company’s quarterly EPS is anticipated between 75 and 85 cents, indicating a 26-35% slump from the year-ago quarter’s levels.

While the company’s Nu Vision 2025 strategy and focus on product launches bode well, the abovementioned headwinds cannot be ignored for the near term.

Looking for Consumer Staple Stocks? Check These

Some better-ranked stocks are Sysco Corporation SYY, Medifast MED and The Chef’s Warehouse CHEF.

Sysco, which engages in the marketing and distribution of various food and related products, carries a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

The Zacks Consensus Estimate for Sysco’s current financial-year sales and EPS suggests growth of 32.6% and 124.2%, respectively, from the year-ago reported number. SYY has a trailing four-quarter earnings surprise of 9.1%, on average.

Medifast, which manufactures and distributes weight loss, weight management, healthy living products and other consumable health and nutritional products, currently carries a Zacks Rank #2.

The Zacks Consensus Estimate for Medifast’s current financial-year sales and EPS suggests growth of nearly 19% and 11.5%, respectively, from the year-ago reported figure. MED has a trailing four-quarter earnings surprise of 12.9%, on average.

The Chef’s Warehouse, which engages in the distribution of specialty food products, currently carries a Zacks Rank #2.

The Zacks Consensus Estimate for The Chef’s Warehouse’s current financial-year sales suggests growth of 29.4% from the year-ago reported figure. CHEF has a trailing four-quarter earnings surprise of 372.3%, on average.


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