Nu Skin Enterprises Inc - A (NYSE:NUS) Reports Q3 Earnings Beat Amid Revenue Decline

Nu Skin Enterprises Inc - A (NYSE:NUS) announced third-quarter financial results that presented a mixed picture for investors, with earnings surpassing expectations while revenue fell short of analyst forecasts. The company's performance and subsequent market reaction highlight the ongoing challenges and strategic shifts within the direct-selling beauty and wellness sector.

Earnings Performance Versus Estimates

The company reported third-quarter revenue of $364.2 million, which came in below analyst expectations of $377.9 million. This represents a 15.3% decline compared to the same quarter last year, or 11.5% when excluding revenue from Mavely, which was sold in January 2025.

Despite the revenue shortfall, Nu Skin delivered stronger-than-expected earnings performance. The company reported earnings per share of $0.34, exceeding the analyst consensus estimate of $0.303. This earnings beat represents a significant improvement from the $0.17 per share reported in the prior-year period.

Key financial metrics from the quarter include:

• Gross margin improvement to 70.5% from 70.1% last year
• Operating margin expansion to 5.9% compared to 4.2% in Q3 2024
• Selling expenses decreased to 35.8% of revenue from 39.0%
• The company reported a negative income tax rate of 6.8% due to certain discrete items

Market Reaction and Trading Activity

Following the earnings release, Nu Skin shares experienced moderate downward pressure in after-market trading, declining approximately 0.28%. This reaction suggests investors were weighing the positive earnings surprise against the revenue miss and ongoing sales declines.

Recent trading patterns show:

• Minimal movement over the past week with a 1.98% gain
• Slight decline of 0.91% over the past two weeks
• Moderate decrease of 1.90% over the past month

The market's tempered response reflects the complex narrative of operational improvements and cost control against a backdrop of declining sales across most regions.

Regional Performance and Sales Force Metrics

The earnings report revealed broad-based challenges across Nu Skin's global operations, with only a few bright spots in an otherwise difficult quarter.

Regional revenue performance showed:

• Americas: $64.0 million, down 17.1% year-over-year
• Mainland China: $42.5 million, down 19.8%
• South Korea: $35.2 million, down 22.1%
• Southeast Asia/Pacific: $56.3 million, down 5.4%
• Japan: $44.5 million, down 5.7%

The company's sales force metrics also reflected challenges:

• Total customers decreased 10% to 746,256
• Paid affiliates declined 13% to 130,096
• Sales leaders fell 19% to 31,150

Future Outlook and Strategic Initiatives

Management provided guidance for the fourth quarter and full year 2025 that appears conservative compared to analyst expectations. For Q4 2025, the company projects revenue between $365 million and $400 million, which at the midpoint falls below analyst estimates of $396.0 million. EPS guidance of $0.25 to $0.35 brackets the current analyst consensus.

Full-year 2025 outlook includes:

• Revenue projection of $1.48 billion to $1.51 billion
• EPS forecast of $3.15 to $3.25, or $1.25 to $1.35 excluding certain items

President and CEO Ryan Napierski emphasized the company's focus on upcoming initiatives, stating, "There is growing excitement and energy for the upcoming launch of our Prysm iO intelligent wellness platform and our expansion into India – two pivotal milestones that will accelerate our vision to become the world's leading intelligent beauty and wellness company."

The company continues to return capital to shareholders, with $3.0 million in dividend payments and $5.0 million in stock repurchases during the quarter, leaving $152.4 million remaining in its share buyback authorization.

For detailed earnings analysis and future estimates, readers can access additional information through the company's earnings portal.

Disclaimer: This article provides financial analysis for informational purposes only and should not be considered as investment advice. Readers should conduct their own research and consult with financial advisors before making investment decisions.