Nu Skin Enterprises Reports Fourth-Quarter Revenue Growth Of 28 Percent And EPS Growth Of 94 Percent

Rhea-AI Summary

Nu Skin Enterprises (NUS) reported a remarkable 28% revenue growth for Q4 2020, totaling $748.2 million, alongside a stunning 94% increase in earnings per share (EPS), reaching $1.40. For the entire year, revenues grew 7% to $2.58 billion, with EPS up 17% at $3.63. Looking ahead, the company forecasts 5-9% revenue growth and EPS of $3.80 to $4.10 for 2021. Strong customer growth at 34% and effective product launches supported the results. The company also plans to continue expanding its product pipeline and digital initiatives, enhancing shareholder value through stock buybacks and consistent dividends.

Positive

• 28% Q4 2020 revenue growth, totaling $748.2 million.
• 94% increase in Q4 EPS, reaching $1.40.
• Full-year revenue increased 7% to $2.58 billion.
• Annual EPS up 17% to $3.63.
• Projecting 5-9% revenue growth and EPS of $3.80-$4.10 for 2021.
• Strong customer growth of 34% in Q4.
• 42% revenue growth in manufacturing segment.

Negative

• Gross margin decreased to 74.0% from 75.9% due to increased freight charges.

PROVO, Utah, Feb. 10, 2021 /PRNewswire/ -- Nu Skin Enterprises, Inc. (NYSE: NUS) today announced fourth-quarter 2020 results, achieving 28 percent revenue growth and 94 percent earnings per share (EPS) growth. For the full year, revenue increased seven percent and EPS increased 17 percent. In addition, the company is projecting five to nine percent revenue growth and EPS of $3.80 to $4.10 in 2021.

Executive Summary
Q4 2020 vs. Prior-year Quarter

Revenue:	$748.2 million; +28%    •   +4% fx impact
Earnings Per Share (EPS):	$1.40; +94%
Sales Leaders:	70,435; +29%
Customers:	1,557,302; +34%

2020 Annual vs. 2019

Revenue:	$2.58 billion; +7%    •   Less than (1%) fx impact
Earnings Per Share (EPS):	$3.63; +17%

"Our strong fourth-quarter results were driven by exceptional customer growth of 34 percent compared to the prior year," said Ritch Wood, chief executive officer. "We grew revenue in each of our reporting segments with particular strength in the West markets where our brand affiliates have more broadly adopted social commerce to share our products. The successful Boost and Nutricentials product introductions helped generate 28 percent revenue and 29 percent sales leader growth in the quarter. In addition, our manufacturing segment continued to generate strong results, posting 42 percent revenue growth in the quarter and playing a critical role in our ability to keep product in stock, even with increased demand and global supply chain constraints.

"I am proud of the work and execution of our entire team, especially our global sales force, as we grew both revenue and earnings amidst the uncertainty of the pandemic. We strengthened our balance sheet, repurchased more than five million shares of stock, innovated in our product pipeline, enhanced our digital capabilities and established a path for double-digit earnings growth going forward," concluded Wood.

Q4 2020 Year-over-year Operating Results                                                                                  

Revenue:	$748.2 million compared to $583.4 million    •   +4% fx impact
Gross Margin:	74.0% compared to 75.9%    •   Nu Skin business was 76.5% compared to 78.5%    •   Impacted by increased freight charges and geographic mix
Selling Expenses:	38.0% compared to 39.1%    •   Nu Skin business was 40.3% compared to 41.3%
G&A Expenses:	24.1% compared to 27.4%
Operating Margin:	11.9% compared to 9.4%
Other Income / (Expense):	$2.7 million compared to ($1.1) million
Income Tax Rate:	19.6% compared to 25.1%    •   Benefited by geographic mix
EPS:	$1.40 compared to $0.72

Stockholder Value

Dividend Payments:	$19.1 million
Stock Repurchases:	$17.0 million    •   $325.8 million remaining in authorization

Q1 and Full-year 2021 Outlook

Q1 2021 Revenue:	$610 to $640 million; +18 to 24%    •   Approximately +3% fx impact
Q1 2021 EPS:	$0.65 to $0.75; +81 to 108%
2021 Revenue:	$2.71 to $2.81 billion; +5 to 9%    •   Approximately +2 to 3% fx impact
2021 EPS:	$3.80 to $4.10; +5 to 13%

"We expect a strong 2021 driven by our robust product pipeline and digital initiatives combined with steady growth in both our customers and sales leaders," continued Wood. "We plan to expand our customer reach through the Boost and Nutricentials launches in the first half and the introduction of our new product innovations in the second half. We remain focused on balancing our geographic profile through the expansion of our social commerce business and our manufacturing segment. We are forecasting high single-digit revenue growth and expect solid improvement in our operating margin, together driving toward a double-digit increase in earnings per share. Additionally, we increased our quarterly dividend for the 20^th consecutive year, a remarkable feat that demonstrates the durability of the Nu Skin business model."

Mark Lawrence, chief financial officer, added, "Our guidance reflects the strong momentum coming out of 2020 and our focused strategy for 2021. Looking to the first quarter, we anticipate revenue of $610 to $640 million, a growth of 18 to 24 percent including an approximate three percent favorable foreign currency impact. We project earnings per share of $0.65 to $0.75, approximately double the prior year. For our initial full-year 2021 guidance, we anticipate revenue of $2.71 to $2.81 billion, reflecting a positive foreign currency impact of approximately two to three percent. We anticipate annual earnings per share of $3.80 to $4.10."

Investor Day
The Nu Skin Enterprises management team will host an investor day event Feb. 11 at noon (ET). Those wishing to access the webcast, as well as the information presented, can visit the Investor Relations page on the company's website at ir.nuskin.com. A replay of the event will be available at the same URL through Feb. 25, 2021.

About Nu Skin Enterprises, Inc. 
Founded more than 35 years ago, Nu Skin Enterprises, Inc. (NSE) empowers innovative companies to change the world 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, product pipeline and product launches, customers and sales leaders, strategies and initiatives; projections regarding revenue, operating margin, 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 December 31, 2020 and 2019 for each of our reportable segments (U.S. dollars in thousands):

		Three Months Ended December 31,									Constant- Currency
		2020			2019			Change			Change
	Nu Skin
	Mainland China	$	172,442		$	154,731			11%			5%
	Americas/Pacific		157,984			86,146			83%			86%
	South Korea		90,384			81,958			10%			5%
	Southeast Asia		82,191			74,767			10%			10%
	Japan		73,132			65,482			12%			7%
	EMEA		82,656			46,205			79%			68%
	Hong Kong/Taiwan		45,864			41,616			10%			5%
	Other		(391)			1,860			(121)%			(121)%
	Total Nu Skin		704,262			552,765			27%			23%
	Manufacturing		43,364			30,487			42%			42%
	Grow Tech		567			107			430%			430%
	Total	$	748,193		$	583,359			28%			24%

 

The following table sets forth revenue for the years ended December 31, 2020 and 2019 for each of our reportable segments (U.S. dollars in thousands):

		Year Ended December 31,									Constant- Currency
		2020			2019			Change			Change
	Nu Skin
	Mainland China	$	625,538		$	722,526			(13)%			(14)%
	Americas/Pacific		511,941			349,078			47%			53%
	South Korea		326,478			329,978			(1)%			—
	Southeast Asia		302,708			301,620			—			1%
	Japan		273,681			260,039			5%			3%
	EMEA		230,246			167,165			38%			35%
	Hong Kong/Taiwan		161,117			166,335			(3)%			(6)%
	Other		(17)			1,621			(101)%			(101)%
	Total Nu Skin		2,431,692			2,298,362			6%			6%
	Manufacturing		149,339			121,917			22%			22%
	Grow Tech		903			137			559%			559%
	Total	$	2,581,934		$	2,420,416			7%			7%

 

The Company's Customers and Sales Leaders statistics by segment as of December 31, 2020 and 2019 are presented in the following table:

 

	2020						2019						% Increase (Decrease)
	Customers			Sales Leaders			Customers			Sales Leaders			Customers			Sales Leaders
Mainland China		381,460			21,990			292,812			17,987			30%			22%
Americas/Pacific		404,955			14,439			220,216			7,607			84%			90%
South Korea		158,953			7,059			168,972			7,251			(6)%			(3)%
Southeast Asia		154,355			8,903			136,349			7,480			13%			19%
Japan		128,400			6,318			125,557			5,916			2%			7%
EMEA		258,587			7,063			153,330			4,619			69%			53%
Hong Kong/Taiwan		70,592			4,663			65,669			3,900			7%			20%
Total		1,557,302			70,435			1,162,905			54,760			34%			29%

 

"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,
	2020			2019			2020			2019
Revenue	$	748,193		$	583,359		$	2,581,934		$	2,420,416
Cost of sales		194,751			140,566			658,028			581,420
Gross profit		553,442			442,793			1,923,906			1,838,996
Operating expenses:
Selling expenses		284,129			228,127			1,019,494			955,600
General and administrative expenses		180,616			159,987			646,848			615,970
Total operating expenses		464,745			388,114			1,666,342			1,571,570
Operating income		88,697			54,679			257,564			267,426
Other income (expense), net		2,736			(1,101)			(1,332)			(12,254)
Income before provision for income taxes		91,433			53,578			256,232			255,172
Provision for income taxes		17,966			13,466			64,877			81,619
Net income	$	73,467		$	40,112		$	191,355		$	173,553
Net income per share:
Basic	$	1.44		$	0.72		$	3.66		$	3.13
Diluted	$	1.40		$	0.72		$	3.63		$	3.10
Weighted-average common shares outstanding (000s):
Basic		50,971			55,548			52,296			55,518
Diluted		52,403			55,807			52,765			55,927

 

NU SKIN ENTERPRISES, INC.
Consolidated Balance Sheets (Unaudited)
(U.S. dollars in thousands)
	December 31, 2020			December 31, 2019
ASSETS
Current assets:
Cash and cash equivalents	$	402,683		$	335,630
Current investments		21,216			8,413
Accounts receivable, net		63,370			50,378
Inventories, net		314,366			275,891
Prepaid expenses and other		101,563			69,854
Total current assets		903,198			740,166
Property and equipment, net		468,181			453,604
Operating lease right-of-use assets		155,104			144,326
Goodwill		202,979			196,573
Other intangible assets, net		89,532			80,321
Other assets		138,082			154,016
Total assets	$	1,957,076		$	1,769,006
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable	$	66,174		$	38,979
Accrued expenses		446,682			290,281
Current portion of long-term debt		30,000			27,500
Total current liabilities		542,856			356,760
Operating lease liabilities		112,275			105,701
Long-term debt		305,393			334,461
Other liabilities		102,281			96,795
Total liabilities		1,062,805			893,717
Stockholders' equity:
Class A common stock		91			91
Additional paid-in capital		579,801			557,544
Treasury stock, at cost		(1,461,593)			(1,324,826)
Accumulated other comprehensive loss		(64,768)			(85,292)
Retained earnings		1,840,740			1,727,772
Total stockholders' equity		894,271			875,289
Total liabilities and stockholders' equity	$	1,957,076		$	1,769,006

 

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SOURCE Nu Skin Enterprises