The company posted first quarter sales revenues of $671.1 million, which showed a fall of 19%, and 12% at constant currency rates.
The constant currency figure was negatively impacted by currency translations of 7%, while the remaining fall in revenues was attributed to a decline in its mainstay Greater China market.
Currency headwinds and new prospects in China
“While currency headwinds proved to be slightly more challenging than expected, we continue to believe we are well positioned for growth in the back half of the year," said CEO Truman Hunt.
He also pointed out that the company is expecting to see some significant improvements to its China business in the coming year, particularly due to the fact that it has now been approved to commence direct selling in two cites in Guangdong province.
"We believe in the potential of China's large and growing market and look forward to expanding our footprint in the country," Hunt said.
Greater China revenues set for recovery?
Last year the company was hard hit by investigations into its direct sales practices by authorities in China, which led to the temporary suspension of such sales in the country.
This is still being reflected in the company’s revenues, with the results for the first quarter showing that revenues in Greater China fell by 33% to $187,367, compared to $278,929 in the corresponding period last year.
Following the investigation, the company was subsequently given a relatively small fine of around $500,000 by the China authorities and has been attempting to rebuild its business in the country by gradually adding licenses to practice direct sales in new cities.
The company says that strong innovation pipeline for the rest of the year, which includes the launch of ageLOC Me anti-ageing skin care system, gives it reason to believe that revenues will be significantly stronger by the end of the financial year.
"Looking forward, we anticipate second-quarter revenue of $540 to $560 million with earnings per share of $0.72 to $0.75. For the year, we anticipate revenue of $2.45 to $2.50 billion, reflecting a negative impact from foreign currency of approximately 7 per cent, with earnings per share of approximately $3.65 to $3.75," Hunt said.