Nu Skin fourth quarter misses the mark

By Simon Pitman

- Last updated on GMT

Nu Skin fourth quarter misses the mark

Related tags United states dollar Asia

US-based Nu Skin continues to struggle against currency headwinds and declining sales in its mainstay Asia Pacific markets, with the resulting net profits coming in at below expectations.

Sales for the quarter were $572.2m, compared to a figure of $609.6m, largely reflecting a fall of 8% in the mainstay China market, where revenues were $195.5m.

The results were also hit by a strong US dollar, mainly against Asian currencies, which negatively impacted the overall revenues by about 7%.

The Americas was the bright spot

In the company’s other regional markets revenues fell  by 7% in North Asia to $173.8m, down 14% in South Asia/Pacific  to  $74.2m and down by 20% in the EMEA market to $33.1m.

The only region to see any growth was the Americas, where revenues were up an impressive 16% to $95.5m, a figure that was driven by a successful innovation pipeline.   

"We generated sequential business improvement in the fourth quarter as we continued introducing our newest ageLOC products,"​ said Truman Hunt, president and chief executive officer.

"We began initial sales of our ageLOC Youth nutritional supplement in the Americas region in the fourth quarter, generating a 16 percent year-over-year revenue improvement. This builds on the successful third-quarter introduction of ageLOC Youth in the South Asia/Pacific region.”

Profts down, Wall Street disappointed

Net profit came in at $35.8m, compared to a figure of $46.5m in the corresponding period last year, a result that caused share prices to dip and then recover on Friday.

The results were below Wall Street expectations, and this was reflected in the fact that share prices in the company fell by almost 25% on Friday morning, after news of the results was made known, though the stock did recover significantly by the end of the day.

Outlook for 2016

Looking ahead, the company says that a constant stream of product innovation is likely to counterbalance weaknesses in the market to some degree.

"As we update our outlook for 2016, we forecast even local-currency revenue in North Asia and EMEA versus 2015, with mid-single-digit growth in each of our other regions,"​ said Ritch Wood, chief financial officer.

"This forecast reflects local-currency growth in the 2 percent range for the year. We now forecast the strengthening dollar to negatively impact revenue by approximately 7 percent versus our prior forecast of 4 percent, resulting in revenue of $2.10 billion to $2.15 billion for 2016.”

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