The US direct selling company has generated sequential growth in the last quarter
It looks as if Nu Skin might just deliver on the bold predicition it made after releasing its Q2 results this year.
Back in August, the US direct selling cosmetics company made its intention for the second half of 2015 clear – a return to revenue growth. And with its latest set of results, it appears that Nu Skin might just be realising that ambition.
For the third quarter of 2015, Nu Skin saw sequential revenue growth, with revenue totalling $571.3m compared with $560.2m in Q2. Despite making gains in the last quarter, there is no hiding from the fact that the company is underperforming compared with last year, when it generated $638.8m in revenue. The company noted that, although revenue was relatively even with the prior year in constant currency, it was negatively impacted 10% by foreign currency fluctuations, while revenue in 2014 was positively impacted by $81m of product launch volume.
The company took another hit this quarter when it came to EPS ($0.28), which were “significantly impacted” by several factors, Nu Skin admitted. Among these factors was a $37.9m charge or approximately $0.43 per share, to write down inventory in China; foreign currency translation expenses of roughly $0.13 per share; and a boosted tax rate.
Truman Hunt, President and CEO, focused on the positives, however, and said: “Our business continued to progress sequentially in each quarter of 2015, with constant-currency revenue improving in Q3 to be even with the prior year.”
He added: “While we are excited about our upcoming product introductions and anticipate continued improvements in our global business, the Greater China region underperformed in the quarter... We believe the Greater China business will benefit by focusing sales leaders on the upcoming launch of our ageLOC Me skin care system rather than focusing on discounted product promotions. These factors resulted in a decision to take an inventory write-down charge.