Nu Skin Enterprises (NUS) Q2 2024 earnings summary

Executive summary

• Q2 2024 revenue was $439.1 million, down 12.2% year-over-year, with a 4.2% FX headwind; Rhyz revenue grew 32.3% to $67.8 million.

• Adjusted EPS was $0.21, near the top end of guidance, excluding $149.4 million in restructuring and impairment charges; GAAP EPS was $(2.38), compared to $0.54 last year.

• Net loss for Q2 2024 was $118.3 million, reflecting significant restructuring and impairment expenses.

• Customer, paid affiliate, and sales leader counts declined 14%, 17%, and 16% year-over-year, respectively.

• Transformation efforts are ongoing, with sequential gains in the U.S. and Southeast Asia/Pacific and new digital initiatives planned.

Financial highlights

• Gross margin was 70.0%, down from 72.9% year-over-year; Nu Skin business gross margin was 76.1%.

• Operating margin was -28.6% GAAP, or 5.4% excluding restructuring/impairment (vs. 8.5% prior year).

• Free cash flow was $43.1 million; cash from operations was $51.2 million; $3 million in dividends paid; $25 million debt repaid.

• Interest expense was $6.7 million (up from $5.8 million YoY); cash and equivalents at quarter-end totaled $224.3 million.

• Net earnings: $(2.38) per share, or $0.21 excluding restructuring/impairment.

Outlook and guidance

• 2024 revenue guidance narrowed to $1.73–$1.81 billion, down 12% to 8% year-over-year; adjusted EPS $0.75–$0.95.

• Q3 2024 revenue projected at $430–$465 million, down 14% to 7% year-over-year; adjusted EPS $0.15–$0.25.

• FX headwinds expected to persist at -4% to -3% for the year.

• Adjusted tax rate for 2024 expected at 36%–42% due to geographic earnings mix.

• Capital expenditures for 2024 estimated at $40–60 million, focused on plant expansion, technology, and facility upgrades.