Nu Skin Enterprises Reports Fourth Quarter and 2021 Financial Results

Rhea-AI Summary

Nu Skin Enterprises reported a Q4 2021 revenue of $673.4 million, down 10% year-over-year, with an EPS of $(0.18). Annual revenue for 2021 was $2.70 billion, a 4% increase, but EPS dropped 21% to $2.86. The company projected Q1 2022 revenue between $560 million and $590 million, reflecting a 13% to 17% decline. Despite challenges in Asian markets, U.S. growth reached 32% for 2021. Looking ahead, Nu Skin aims for a revenue range of $2.66 billion to $2.77 billion for 2022, with a focus on technology investment to support affiliates.

Positive

• 2021 revenue growth of 4% year-over-year.
• Adjusted EPS improved by 14% versus 2020.
• U.S. business grew 32% for 2021, building on 37% growth in 2020.
• Strong demand for new products, including Beauty Focus™ Collagen+.

Negative

• Q4 2021 revenue decreased by 10% year-over-year.
• EPS fell to $(0.18) due to restructuring charges.
• Sales leaders and customer base down 13% and 12% respectively.
• 2022 Q1 revenue guidance indicates a decline of 13% to 17%.

PROVO, Utah, Feb. 16, 2022 /PRNewswire/ -- Nu Skin Enterprises, Inc. (NYSE: NUS) today announced fourth quarter and 2021 results.

Executive Summary
Q4 2021 vs. Prior-year Quarter

Revenue:	$673.4 million; (10)%      • (2)% fx impact or $(11.9) million
Earnings Per Share (EPS):	$(0.18) or $1.11 excluding restructuring and impairment charges, compared to $1.40 in Q4 2020
Sales Leaders:	61,515; (13)% or 12% compared to 2019
Customers:	1,367,559; (12)% or 18% compared to 2019

2021 Annual vs. 2020

Revenue:	$2.70 billion; +4%      • 2% fx impact or $66.5 million
Earnings Per Share (EPS):	$2.86 or $4.14 excluding restructuring and impairment charges, compared to $3.63 in 2020, or $3.10 in 2019      • (21)% or 14% excluding restructuring and impairment charges      • (8)% or 34% excluding restructuring and impairment charges compared to 2019

"For the year, we are encouraged with 4 percent year-over-year revenue growth and 11 percent growth compared to 2019, particularly considering the many COVID-related government restrictions, continued global uncertainty and ongoing transformation of our business," said Ryan Napierski, Nu Skin president and CEO. "We generated strong demand for our two most recent products, Beauty Focus™ Collagen+ and ageLOC® Meta, as both performed well during the quarter. Our U.S. business grew 32 percent for the year on top of 37 percent in 2020, due in large part to ongoing adoption of our social selling model. Many of our Asian markets, including Mainland China, continue to be impacted by strict lockdowns and restrictions on in-person sales events and promotional activities. However, South Korea is gaining some traction with social commerce and grew 9 percent due to the ageLOC Meta preview and continued demand for our TR90 weight management product.

"Looking ahead to 2022, we anticipate another year of growth as we continue our transformation toward becoming the world's leading integrated beauty and wellness company, powered by our dynamic affiliate opportunity platform. Our Nu Vision 2025 strategy, which we will introduce at our investor event later today, encompasses several key strategic imperatives to accelerate growth, including: our EmpowerMe personalized beauty and wellness strategy with connected beauty devices; our affiliate-powered social commerce business model; and the expansion of our digital platform. We are confident in our plans as we work toward achieving our vision for the future."

Q4 2021 Year-over-year Operating Results                

Revenue:	$673.4 million compared to $748.2 million      • (2)% fx impact
Gross Margin:	74.2% or 75.2% excluding restructuring and impairment charges compared to 74.0%      • Nu Skin business was 77.9% compared to 76.5%
Selling Expenses:	38.7% compared to 38.0%      • Nu Skin business was 41.0% compared to 40.3%
G&A Expenses:	24.7% compared to 24.1%
Operating Margin:	3.0% or 11.7% excluding restructuring and impairment charges compared to 11.9%
Other Income / (Expense):	$(1.9) million compared to $2.7 million
Income Tax Rate:	150.1% or 26.9% excluding restructuring and impairment charges, compared to 19.6%
EPS:	$(0.18) or $1.11 excluding restructuring and impairment charges, compared to $1.40

Stockholder Value

Dividend Payments:	$18.9 million
Stock Repurchases:	$10.0 million      • $245.4 million remaining in authorization

Q1 and Full-year 2022 Outlook

Q1 2022 Revenue:	$560 to $590 million; (13) to (17)%      • Approximately (2) to (3)% fx impact
Q1 2022 EPS:	$0.65 to $0.75; (18) to (28)%
2022 Revenue:	$2.66 to $2.77 billion; (1) to 3%      • Approximately (1) to (2)% fx impact
2022 EPS:	$4.05 to $4.45; +42 to 56% on a reported basis, or (2) to 8% non-GAAP

"We are especially pleased with our adjusted earnings per share of $4.14 for the year and $1.11 for the quarter, driven by gross margin and operational improvements. Full year adjusted EPS results represent annual growth of 14 percent versus 2020 or 34 percent compared to 2019," added Mark Lawrence, chief financial officer. "During the quarter, we elected to exit our Grow Tech business and re-focus those resources on key strategic initiatives and growth objectives in our core business. We took a one-time pre-tax charge of $58.5 million and anticipate that substantially all the non-cash charges were incurred in the fourth quarter of 2021. As a result of these charges, our reported earnings per share was $2.86 for the year and $(0.18) for the quarter. Our 2022 outlook indicates that we plan to re-invest the bulk of the savings from the exit into technology that will further support our affiliates and drive long-term growth.

"Our 2022 revenue guidance is $2.66 to $2.77 billion with EPS of $4.05 to $4.45. First quarter projected revenue is $560 to $590 million with EPS of $0.65 to $0.75. Although our near-term guidance continues to be impacted by global uncertainty, we believe our strategic initiatives will enable stronger growth in the second half. We remain committed to driving operational improvements along the way toward our stated mid-term 13 percent operating income target," concluded Lawrence. 

Investor Day 
The Nu Skin Enterprises management team will host an investor day event today at noon (ET). To tune in to the webcast and view supplemental materials, visit Nu Skin's investor relations page at ir.nuskin.com when the event begins. A replay of the event, along with supplemental materials, will be available on the same page through March 2, 2022. 

About Nu Skin Enterprises, Inc.
Nu Skin Enterprises, Inc. (NYSE: NUS) is a leading beauty and wellness company, powered by a dynamic affiliate opportunity platform. The company helps people live, look and feel their best with products that combine the best of science, technology and nature. Backed by more than 35 years of scientific research, Nu Skin develops innovative products including Nu Skin® personal care, Pharmanex® nutrition and the ageLOC® anti-aging brand which includes an award-winning line of beauty device systems. Nu Skin operates in approximately 50 markets worldwide in the Americas, Asia, Europe, Africa and the Pacific. Rhyz Inc. is the company's strategic investment arm that includes a collection of technology and manufacturing companies to support growth in the core Nu Skin business. Nu Skin is committed to sustainability, including global initiatives such as transitioning to reduced and sustainable packaging for all products by 2030. The Nu Skin Force for Good Foundation also strives to improve children's health, education and economic circumstances throughout the world. For more information, visit nuskin.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, transformation, initiatives, product pipeline and product introductions, digital tools, customers and sales leaders, affiliates, strategies and initiatives; operational improvements, projections regarding revenue, expenses, operating income, earnings per share, foreign currency fluctuations, uses of cash 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," "remain," "become," "plan," "opportunity," "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, increased scrutiny of sales force actions, 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.

The following table sets forth revenue for the three-month periods ended December 31, 2021 and 2020 for each of our reportable segments (U.S. dollars in thousands):

	Three Months Ended December 31,									Constant- Currency
	2021			2020			Change			Change
Nu Skin
Mainland China	$	130,708		$	172,442			(24)%			(26)%
Americas		144,000			140,586			2%			4%
South Korea		92,528			90,384			2%			8%
Southeast Asia/Pacific		90,313			99,589			(9)%			(8)%
EMEA		68,066			82,656			(18)%			(14)%
Japan		63,215			73,132			(14)%			(6)%
Hong Kong/Taiwan		47,816			45,864			4%			3%
Nu Skin other		(801)			(391)			(105)%			(105)%
Total Nu Skin		635,845			704,262			(10)%			(8)%
Rhyz Investments
Manufacturing		36,360			43,364			(16)%			(16)%
Grow Tech		957			567			69%			69%
Rhyz other		274			—
Total Rhyz Investments		37,591			43,931			(14)%			(14)%
Total	$	673,436		$	748,193			(10)%			(8)%

The following table sets forth revenue for the years ended December 31, 2021 and 2020 for each of our reportable segments (U.S. dollars in thousands):

	Year Ended December 31,									Constant- Currency
	2021			2020			Change			Change
Nu Skin
Mainland China	$	568,774		$	625,538			(9)%			(15)%
Americas		547,755			453,022			21%			20%
South Korea		354,252			326,478			9%			6%
Southeast Asia/Pacific		336,651			361,627			(7)%			(9)%
EMEA		283,200			230,246			23%			18%
Japan		266,216			273,681			(3)%			—
Hong Kong/Taiwan		162,611			161,117			1%			(2)%
Nu Skin other		1,549			(17)			9,212%			9,212%
Total Nu Skin		2,521,008			2,431,692			4%			1%
Rhyz Investments
Manufacturing		172,120			149,339			15%			15%
Grow Tech		2,104			903			133%			133%
Rhyz other		437			—
Total Rhyz Investments		174,661			150,242			16%			16%
Total	$	2,695,669		$	2,581,934			4%			2%

The company's Customers and Sales Leaders statistics by segment as of December 31, 2021 and 2020 are presented in the following table:

	2021						2020						% Increase (Decrease)
	Customers			Sales Leaders			Customers			Sales Leaders			Customers			Sales Leaders
Mainland China		315,418			17,658			381,460			21,990			(17)%			(20)%
Americas		336,564			10,340			366,688			12,754			(8)%			(19)%
South Korea		146,354			7,108			158,953			7,059			(8)%			1%
Southeast Asia/Pacific		169,601			10,386			192,622			10,588			(12)%			(2)%
EMEA		210,414			6,124			258,587			7,063			(19)%			(13)%
Japan		122,813			5,872			128,400			6,318			(4)%			(7)%
Hong Kong/Taiwan		66,395			4,027			70,592			4,663			(6)%			(14)%
Total		1,367,559			61,515			1,557,302			70,435			(12)%			(13)%

"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 December 31,						Years Ended December 31,
	2021			2020			2021			2020
Revenue	$	673,436		$	748,193		$	2,695,669		$	2,581,934
Cost of sales		173,775			194,751			675,223			658,028
Gross profit		499,661			553,442			2,020,446			1,923,906
Operating expenses:
Selling expenses		260,831			284,129			1,068,189			1,019,494
General and administrative expenses		166,641			180,616			666,395			646,848
Restructuring and impairment expenses		51,870			—			51,870			—
Total operating expenses		479,342			464,745			1,786,454			1,666,342
Operating income		20,319			88,697			233,992			257,564
Other income (expense), net		(1,883)			2,736			(1,533)			(1,332)
Income before provision for income taxes		18,436			91,433			232,459			256,232
Provision for income taxes		27,666			17,966			85,193			64,877
Net income	$	(9,230)		$	73,467		$	147,266		$	191,355
Net income per share:
Basic	$	(0.19)		$	1.44		$	2.93		$	3.66
Diluted	$	(0.18)		$	1.40		$	2.86		$	3.63
Weighted-average common shares outstanding (000s):
Basic		49,862			50,971			50,193			52,296
Diluted		50,801			52,403			51,427			52,765

 

NU SKIN ENTERPRISES, INC.
Consolidated Balance Sheets (Unaudited)
(U.S. dollars in thousands)
	December 31, 2021			December 31, 2020
ASSETS
Current assets:
Cash and cash equivalents	$	339,593		$	402,683
Current investments		15,221			21,216
Accounts receivable, net		41,299			63,370
Inventories, net		399,931			314,366
Prepaid expenses and other		76,906			101,563
Total current assets		872,950			903,198
Property and equipment, net		453,674			468,181
Operating lease right-of-use assets		120,973			155,104
Goodwill		206,432			202,979
Other intangible assets, net		76,991			89,532
Other assets		175,460			138,082
Total assets	$	1,906,480		$	1,957,076
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable	$	49,993		$	66,174
Accrued expenses		372,201			446,682
Current portion of long-term debt		107,500			30,000
Total current liabilities		529,694			542,856
Operating lease liabilities		88,759			112,275
Long-term debt		268,781			305,393
Other liabilities		106,474			102,281
Total liabilities		993,708			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		601,703			579,801
Treasury stock, at cost – 40.7 million and 39.7 million shares		(1,526,860)			(1,461,593)
Accumulated other comprehensive loss		(73,896)			(64,768)
Retained earnings		1,911,734			1,840,740
Total stockholders' equity		912,772			894,271
Total liabilities and stockholders' equity	$	1,906,480		$	1,957,076

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.

Gross margin, operating margin, income tax rate, earnings per share and adjusted earnings per share growth, each excluding impairment and restructuring charges, also are non-GAAP financial measures. Impairment and restructuring charges are not part of the ongoing operations of our underlying business. The company believes that these non-GAAP financial measures are useful to investors, lenders and analysts because removing the impact of impairment and restructuring charges facilitates period-to-period comparisons of the company's performance. Please see the reconciliations of these items to our gross margin, operating margin, income tax rate, earnings per share and earnings per share growth calculated under GAAP, below.

NU SKIN ENTERPRISES, INC.
Reconciliation of Earnings Per Share Excluding Impact of Restructuring and Impairment to GAAP Earnings Per Share
(in thousands, except per share amounts)
	Three Months Ended				Years Ended
	December 31,				December 31,
	2021		2020		2021		2020
Net income	$          (9,230)		$            73,467		$           147,266		$          191,335
Impact of restructuring and impairment:
Restructuring and impairment	51,870		—		51,870		—
Inventory write-off	6,656		—		6,656		—
Income tax impact	6,933		—		6,933		—
Adjusted net income	$           56,229		$            73,467		$           212,725		$          191,335
Diluted earnings per share	$            (0.18)		$                1.40		$                 2.86		$                3.63
Diluted earnings per share, excluding restructuring and impairment impact	$               1.11		$                1.40		$                 4.14		$                3.63
Weighted-average common shares outstanding (000s):	50,801		52,403		51,427		52,765

 

NU SKIN ENTERPRISES, INC.
Reconciliation of Earnings Per Share Growth Rate Excluding Impact of Restructuring and Impairment to GAAP Earnings Per Share
(in thousands, except per share amounts)
		Years Ended
		December 31,
		2021		2020		2019
Net income		$           147,266		$          191,335		$          173,553
Impact of restructuring and impairment:
Restructuring and impairment		51,870		—		—
Inventory write-off		6,656		—		—
Income tax impact		6,933		—		—
Adjusted net income		$           212,725		$          191,335		$          173,553
Diluted earnings per share		$                 2.86		$                3.63		$                3.10
Diluted earnings per share, excluding restructuring and impairment impact		$                 4.14		$                3.63		$                3.10
Weighted-average common shares outstanding (000s):		51,427		52,765		55,927
2021 annual growth rate
Earnings per share, growth rate		(21)%
Earnings per share, growth rate, excluding restructuring and impairment impact		14%
2021 growth over 2019
Earnings per share, growth rate		(8)%
Earnings per share, growth rate, excluding restructuring and impairment impact		34%

 

NU SKIN ENTERPRISES, INC.
Reconciliation of Gross Margin Excluding Impact of Restructuring and Impairment to GAAP Gross Margin
(in thousands, except per share amounts)
	Three Months Ended				Years Ended
	December 31,				December 31,
	2021		2020		2021		2020
Gross Profit	$         499,661		$          553,442		$        2,020,446		$       1,923,906
Impact of restructuring and impairment:
Inventory write-off	6,656		—		6,656		—
Adjusted Gross Profit	$         506,317		$          553,442		$        2,027,102		$       1,923,906
Gross margin	74.2%		74.0%		75.0%		74.5%
Gross margin, excluding restructuring and impairment impact	75.2%		74.0%		75.2%		74.5%
Revenue	$        673,436		$          748,193		$        2,695,669		$       2,581,934

 

NU SKIN ENTERPRISES, INC.
Reconciliation of Operating Margin Excluding Impact of Restructuring to GAAP Operating Margin
(in thousands, except per share amounts)
	Three Months Ended				Years Ended
	December 31,				December 31,
	2021		2020		2021		2020
Operating income	$           20,319		$            88,697		$           233,992		$          257,564
Impact of restructuring and impairment:
Restructuring and impairment	51,870		—		51,870		—
Inventory write-off	6,656		—		6,656		—
Adjusted operating income	$           78,845		$            88,697		$           292,518		$          257,564
Operating margin	3.0%		11.9%		8.7%		10.0%
Operating margin, excluding restructuring and impairment impact	11.7%		11.9%		10.9%		10.0%
Revenue	$        673,436		$          748,193		$        2,695,669		$       2,581,934

 

NU SKIN ENTERPRISES, INC.
Reconciliation of Effective Tax Rate Excluding Impact of Restructuring to GAAP Effective Tax Rate
(in thousands, except per share amounts)
	Three Months Ended				Years Ended
	December 31,				December 31,
	2021		2020		2021		2020
Provision for income taxes	$           27,666		$            17,966		$             85,193		$          64,877
Impact of restructuring on tax provision	(6,933)		—		(6,933)		—
Provision for income taxes, excluding impact of restructuring	$           20,733		$            17,966		$             78,260		$            64,877
Income before provision for income taxes	$           18,436		$           91,433		$           232,459		$          256,232
Impact of restructuring and impairment:
Restructuring and impairment	51,870		—		51,870		—
Inventory write-off	6,656		—		6,656		—
Income before provision for income taxes, excluding restructuring and impairment impact	$           76,962		$            91,433		$           290,985		$          256,232
Effective tax rate	150.1%		19.6%		36.6%		25.3%
Effective tax rate, excluding restructuring and impairment impact	26.9%		19.6%		26.9%		25.3%

 

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SOURCE Nu Skin Enterprises

FAQ

What were Nu Skin Enterprises' Q4 2021 revenue and EPS results?

Nu Skin reported Q4 2021 revenue of $673.4 million and an EPS of $(0.18).

How did Nu Skin perform financially in 2021 compared to 2020?

In 2021, Nu Skin achieved a revenue of $2.70 billion, a 4% increase, with an EPS of $2.86, down 21% from 2020.

What is Nu Skin's outlook for Q1 2022?

Nu Skin anticipates Q1 2022 revenue between $560 million and $590 million, reflecting a decline of 13% to 17%.

What are the projected revenue and EPS for Nu Skin in 2022?

Nu Skin projects 2022 revenue between $2.66 billion and $2.77 billion, with EPS ranging from $4.05 to $4.45.