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Nu Skin Enterprises, Inc. (NUS) Plummets After Earnings, Guidance Miss

Nu Skin released its fourth quarter earnings results after closing bell tonight, posting adjusted earnings of 62 cents per share and $572.2 million in revenue. Analysts had been expecting earnings per share of 73 cents and $585.9 million in revenue. In the year-ago quarter, the multi-level marketing company posted earnings of 85 cents per share and $609.6 million in revenue.

Nu Skin

Nu Skin struggles against currencies

Greater China revenues fell to $195.5 million, while Americas revenues increased to $95.6 million. North Asia revenues fell to $173.8 million, and South Asia/ Pacific revenues fell to $74.3 million. Revenues from Europe, the Middle East and Africa tumbled to $33.1 million for the fourth quarter.

Nu Skin said while revenues increased on a constant currency basis, they were negatively impacted by about $42 million or 7% as a result of currency headwinds. For the full year, the strong U.S. dollar negatively impacted revenue by 8%.

The company has been dealing heavily with currency headwinds for years, particularly in the Greater China region, where more than 33% of its total revenue comes from. The company has also been dealing with tumbling sales in general, with all regions except the South Asia and Pacific region seeing a decline in sales. The Greater China area alone recorded a 17% sales decline, which amounted to a 15% decline on a currency neutral basis. In addition to falling sales, Nu Skin has also had some regulatory headwinds to deal with in China as government officials ratcheted up the scrutiny on direct sales firms.

Nu Skin provides weak guidance

Nu Skin management expects first quarter earnings to be between 35 cents and 38 cents per share, which is significantly lower than the consensus of 73 cents per share. Revenue is expected to be between $450 million and $470 million, again missing the consensus at $542.26 million. For the full year, management projects earnings of $2.40 to $2.60, against the consensus of $2.89 per share. Nu Skin predicts revenue of $2.1 billion to $2.15 billion, versus the consensus of $2.26 billion.