Shares of Nu Skin Enterprises Inc (NUS) reached a new 52-week high of $128.87 on Nov 29. The company provided strong fiscal 2014 guidance on Nov 21. In fact, shares of this supplier of anti-aging personal care products have been rising ever since it reported solid third quarter 2013 on Oct 31. Nu Skin’s shares closed at $127.84, reflecting a year-to-date return of 250%.
The company’s long-term estimated EPS growth rate is 18.61%. Average volume of shares traded over the last three months came in at approximately 1,264K.
Issuance of Strong Fiscal 2014 Guidance
On Nov 21, Nu Skin provided its 2014 guidance. The company expects earnings per share to grow 25%-30% on a year-over-year basis to $7.25 – $7.50 for fiscal 2014. Revenues for fiscal 2014 are expected in the range of $3.9 – $4.0 billion, up 22% – 25% from the prior year. The revenue guidance includes an anticipated unfavorable foreign currency impact of 3%.
The double-digit growth in earnings and revenue guidance reflects the company’s strong innovation program in its products and distribution channels across all the regions. This Zacks Rank #1 (Strong Buy) company is very optimistic about its ageLOC TR90, a weight management and body shaping system and the latest in ageLOC anti-aging product line, which is driving the company’s guidance. Nu Skin’s ageLOC anti-aging products focus on providing nutritional and skin care solutions that target the sources of aging.
Started in Sep 2013, the ageLOC TR90 weight management system was well received in the Greater China and South Asia/Pacific regions and generated approximately $205 million in limited-time-offer sales in the third quarter of 2013. The company expects this momentum to continue through 2014.
Impressive Third Quarter Results
Estimates have been rising ever since the company reported strong third quarter 2013 results on Oct 31. Earnings of $1.80 per share improved significantly from the prior-year quarter, posting a 107% increase. Earnings also surpassed the Zacks Consensus Estimate by 27%. The upswing in earnings was driven by higher sales in the Greater China and South Asia/Pacific regions, as well as in South Korea. Higher margins and lower quarterly tax rate also led to earnings growth in the quarter.
Despite a 3% unfavorable impact from currency, sales increased 76% to $927.6 million in the quarter. Sales were way ahead of the Zacks Consensus Estimate of $815 million. The successful execution of ageLOC TR90 weight management system drove sales in the quarter.
The company’s gross margin during the quarter also shot up 140 basis points to 84.9%, primarily due to the TR90 launch in Greater China and South Asia/Pacific. Operating margin improved 240 basis points to 18.1% in the third quarter, as a result of strong sales.
Following the strong third quarter results, Nu Skin raised its 2013 revenue guidance to the range of $3.18 – $3.21 billion, up from its previous guidance of $2.83-$2.86 billion. The new guidance includes a projected negative currency impact of 4% for the year, lower than 5% expected previously. The company now expects 2013 earnings to be $5.77 to $5.82 per share, up from $4.85 to $5.00 per share expected previously.
Other Stocks to Consider
Some better ranked stocks in the consumer staples sector include Omega Protein Corp (OME), Constellation Brands Inc (STZ) and Pinnacle Foods Inc (PF). While Omega and Constellation sport a Zacks Rank #1 (Strong Buy), Pinnacle carries a Zacks Rank #2 (Buy).
NU SKIN ENTERP (NUS): Free Stock Analysis Report
OMEGA PROTEIN (OME): Free Stock Analysis Report
PINNACLE FOODS (PF): Free Stock Analysis Report
CONSTELLATN BRD (STZ): Free Stock Analysis Report
