NYSE:NUS Nu Skin Enterprises Q2 2023 Earnings Report $5.50 -0.12 (-2.05%) Closing price 04/17/2025 03:59 PM EasternExtended Trading$5.74 +0.24 (+4.37%) As of 04/17/2025 05:38 PM Eastern Extended trading is trading that happens on electronic markets outside of regular trading hours. This is a fair market value extended hours price provided by Polygon.io. Learn more. Earnings HistoryForecast Nu Skin Enterprises EPS ResultsActual EPS$0.54Consensus EPS $0.53Beat/MissBeat by +$0.01One Year Ago EPSN/ANu Skin Enterprises Revenue ResultsActual Revenue$500.26 millionExpected Revenue$512.35 millionBeat/MissMissed by -$12.09 millionYoY Revenue GrowthN/ANu Skin Enterprises Announcement DetailsQuarterQ2 2023Date8/1/2023TimeN/AConference Call DateTuesday, August 1, 2023Conference Call Time5:00PM ETUpcoming EarningsNu Skin Enterprises' Q1 2025 earnings is scheduled for Thursday, May 8, 2025, with a conference call scheduled at 5:00 PM ET. Check back for transcripts, audio, and key financial metrics as they become available.Q1 2025 Earnings ReportConference Call ResourcesConference Call AudioConference Call TranscriptSlide DeckPress Release (8-K)Quarterly Report (10-Q)Earnings HistoryCompany ProfileSlide DeckFull Screen Slide DeckPowered by Nu Skin Enterprises Q2 2023 Earnings Call TranscriptProvided by QuartrAugust 1, 2023 ShareLink copied to clipboard.There are 9 speakers on the call. Operator00:00:00Ladies and gentlemen, thank you for standing by. Welcome to Nu Skin Enterprises Second Quarter 2023 Earnings Conference Call. At this time, all participants are in a listen only mode. After the speakers' presentation, there will be a question and answer Please note that today's conference may be recorded. I will now hand the conference over to your speaker host for today, Mr. Operator00:00:30Scott Pond, Vice President of Investor Relations. Please go ahead. Speaker 100:00:35Thanks, Olivia, and good afternoon, everyone. Today on the call with me are Ryan Napierski, President and CEO Connie Tain, Chief Global Growth Officer and James Thomas, CFO. On today's call, comments will be made that include some forward looking statements. These statements involve risks and uncertainties and actual results may differ materially from those discussed or anticipated. Please refer to today's earnings release and our SEC filings for a complete discussion of these risks. Speaker 100:01:05Also during the call, certain financial numbers may be discussed that differ from comparable numbers obtained in our financial statements. We believe these non GAAP numbers assist in comparing period to period results in a more consistent manner. Please refer to our investor website for any required reconciliation of non GAAP numbers. And with that, I'll turn the call over to Ryan. Speaker 200:01:26Thanks, Scott. Hello, everyone. Thanks for joining us today. In Q2, we continued to advance key initiatives enabling New Vision 2025, our multi year transformation to becoming the world's leading integrated beauty and wellness company that's powered by our dynamic affiliate opportunity platform. While we remain confident in the direction and future outcome of our strategy, The persistence of macro headwinds has made the journey more challenging than expected, especially over the past several quarters. Speaker 200:01:54Nevertheless, we remain committed to our strategic Investing in the future through Empower Me personalization, social commerce and our digital ecosystem, while pivoting our action plan based on near term needs in the business, which I'll speak to in just a moment. Our 2nd quarter revenue was $500,300,000 while earnings per share were $0.54 Both revenue and EPS were in line with our guidance and up on a sequential basis, mostly reflecting 8% year over year growth in Mainland China, where momentum continued to build ahead of plan. With ongoing economic uncertainties in the market, we remain cautiously optimistic given The healthy growth of paid affiliates and sales leaders during the quarter, both encouraging signs leading to sustained second half growth. Our growth in China was offset by general softness in other markets, driven in large part by macro related pressures Negatively impacting overall consumer sentiment and spending, aggressive strategic price increases over the past several quarters around the globe to combat margin pressures have Taken their toll on customer acquisition, which has led to sluggish sales channel performance, most notably in developing markets, including Southeast Asia Pacific, Europe and Africa and Latin America. In the Americas and South Korea, we launched new products including new color lash and brow serum, As well as TRME, which performed below expectations due in large part to declines in our channel dynamics impacting paid affiliates and sales leader counts. Speaker 200:03:26In the second half, we will be doubling down on efforts to stabilize consumer demand and regenerate growth in the sales channel, While continuing to focus on our long term New Vision 2025 Business Transformation, let me briefly describe our plans for the remainder of the year. We're in the final stages of preparation for the launch of the company's 1st holistic wellness and beauty device, AgeLock WellSpa IO. This device system which helps users restore, revitalize and recover their bodies will be introduced in several markets in Q3 and is expected to be rolled out in nearly all markets by the end of 2023. WellSpa. Io will be our 2nd connected device building upon what we've learned from the launch of Our ageLOC LumiSpa IO, which has generated more than 6,000,000 connected treatments to date, helping us learn more about the needs of our customers. Speaker 200:04:20WellSpa. Io will be complemented with an enhanced interactive IO experience in our Vera app that will coach users through their optimal journeys. With the introduction of this next device, we expect to make steady progress towards our annual goal of 15% of revenue coming from connected device systems on our way to the longer term target of 30% of revenue by 2025. 2nd, affiliate powered social commerce. We're doubling down on our efforts to accelerate growth of our sales channel with the introduction of a new channel growth program in most of our markets called Empower Start. Speaker 200:04:57This new program is focused upon motivating brand affiliates in their journey to becoming new brand representatives and sales leaders. Empower Start aligns with our Empower Me Creator program introduced in Q2 to focus our channel development efforts on both early and developing leaders Critical for regenerating growth in the channel, we anticipate that these two programs working together will bolster both affiliate and sales leaders in the second half and Motivate customer acquisition. Also, please note as you look at our paid affiliate numbers, we have adjusted the eligibility requirements For rewards in some markets to more narrowly focus on those affiliates who are actively building a consumer base, This adjustment will roll out in additional markets over the next several quarters. And third, our digital ecosystem. We continue to see solid adoption of our Verra and Stella apps, which are central to our initiatives around leveraging the power of a robust digital ecosystem By enabling us to drive deeper connections with customers and affiliates, we're well on our way to hitting our full year targets of monthly active users for both apps and we'll begin transitioning to focus on growing customer acquisition, conversion and lifetime value through deeper connections. Speaker 200:06:16Also in June, we began the implementation of Equinox, our new e commerce global platform in North America. This new platform significantly expands the transactional scale of our business as we lean further into social commerce. Despite some early growing pains, migrating to A new platform will significantly expand our ability to create a more dynamic customer experience while enhancing operational efficiencies. Now regarding our RISE ecosystem, we're pleased to report 33% year over year growth in RISE As manufacturing performed well in the quarter and booked orders remain strong through year's end, RISE continues to grow to as well as enable our broader enterprise transformation. We made 2 important investments for our future in the Q2. Speaker 200:07:11First, as you saw from our previous release, we completed the acquisition of BeautyBio, an omnichannel and clinically proven clean skincare and beauty device brand. The company's approach and mission are closely aligned with our core values and our enterprise strategy. BeautyBio has unique device IP and hydration facial for our core Nu Skin business. For BeautyBio, our unique expertise in devices, manufacturing and Technology will help this business reach its potential as part of the RISE ecosystem. Beauty Bio will continue to operate as an independent business as we seek mistake in Life DNA, a leading DNA assessment and recommendation technologies company. Speaker 200:08:12We believe that personalization in the beauty, wellness and lifestyle will deepen over time to the genetic level and that DNA will become an increasingly important source of information for our consumers to understand their personal care and wellness needs that can influence the quality and longevity of their lifespan. While it's too early to discuss the application to our business, our investment is indicative of our commitment to evolving our core Nu Skin business Through personalization and when combined with developing technologies like AI, we believe it will help Nu Skin become a meaningful disruptor in the beauty, wellness and Lifestyle space. So to wrap it up, the agility of our organization is a key strength as we adapt our business and tactics This more challenging environment. While the pillars of New Vision 2025 have not changed, understandably, we're adjusting time and cadencing factors as needed. In addition, we are reemphasizing other critical aspects of the core business, including safeguarding the enterprise and optimizing profitability. Speaker 200:09:16And we remain highly strategic in our approach to allocating capital and prioritizing investment decisions. So with that, let me turn the time over to James to take you through our financials in more detail. James has a long history with the company having served as our Chief Accounting Officer for the past several years. He's had a strong background in the wellness space and has been instrumental in leading various elements of our strategic transformation and resource prioritization efforts. So James, take it away. Speaker 100:09:44Thank you, Ryan, and thanks Speaker 300:09:46for joining us today. I look forward to working alongside this forward thinking management team As we work toward achieving New Vision 2025 and accelerating our core business, while we build out our expansive enterprise ecosystem strategy to generate long term value for our shareholders and all stakeholders. I'll provide a brief Q2 financial review and then give initial Q3 guidance and speak to our full year 2023 projections. For more information, please visit our Investor Relations website. For the Q2, we generated revenue within our prior guidance range at $500,300,000 with a larger than expected negative foreign currency impact of 3% or $16,400,000 Our reported earnings per share of $0.54 landed near the high end of our guidance range Aided in part by our strict cost control measures, our Q2 reported gross margin was 72.9%, which was down 70 basis points versus the prior year period due to our RISE Manufacturing segment making up a higher percentage of overall revenue. Speaker 300:10:52This decline was partially offset by improving margins in the Nu Skin core due to growth in China, in our RISE Manufacturing segment due to higher throughput to our expanding CPG customer base. We are also pleased with the 60 basis point sequential improvement as we execute on Project Accelerate, Our cost optimization initiative, which focuses on driving margin improvement with margin accretive products and improved operational efficiencies. Gross margin for the core Nu Skin business was 77.2%, a sequential improvement of 80 basis points. Selling expense as a percentage of revenue was 37%, 2 10 basis points lower due in large part to growth in our manufacturing segment, which now represents 9% of our total revenue and does not carry selling expense. The lower selling expense can also be attributed to the sales compensation program in China as they operate under a different model. Speaker 300:11:57For the core Nu Skin business, selling expense was 40.2%. As part of our focus on operational efficiencies, General and administrative expense was $137,000,000 or 27.4 percent compared to $141,600,000 or 25.3 percent in the prior year period. Our operating margin for the quarter was 8.5% compared to 9.2% in the prior year period. The other income expense line reflects a $5,400,000 expense compared to an $8,600,000 expense in the prior year period. During the quarter, we paid $19,500,000 in dividends and did not repurchase any stock. Speaker 300:12:46Considering the first half results, a stronger than expected U. S. Dollar and recent acquisitions, Let me now provide initial Q3 projections and updated 2023 annual guidance ranges for revenue and EPS. For Q3 2023, we are projecting sequential improvements with revenue of $500,000,000 to $540,000,000 including a negative foreign currency impact of 1% to 2%. This projection reflects continued macro challenges and factors and modest impact From the introduction of our AgeLock WellSpa IO system, our Q3 EPS guidance is $0.54 to $0.69 and assumes a projected Q3 tax rate of 18% to 28%. Speaker 300:13:34For the full year 2023, We are projecting revenue of $2,000,000,000 to $2,080,000,000 which includes a 2% to 3 unfavorable foreign currency impact. We are anticipating reported earnings per share of $2.15 to $2.45 or 2 point The first quarter restructuring charge of $9,800,000 Our guidance assumes an annual tax rate of 16% to 26%. While the current macro environment remains uncertain, impacting our near term projections, we continue to believe that the future opportunities to accelerate our business We'll expand as we invest in our key strategic imperatives supporting our enterprise growth strategy. We are committed to continuing our operational improvement journey and believe our strong balance sheet and proven expense management discipline position us well for long term success. And with that, operator, we will now open the call for questions. Operator00:14:41Thank you. And our first question coming from the line of Jason Brennan with Citi. Your line is open. Speaker 400:15:02Great. Thanks, operator. First of all, James, congrats on the call or congrats on the role. Looking forward to working with you more going forward. And the decision making process behind it. Speaker 400:15:21It sounds like it was very attractive IP driven, but any more color on that would be great. Then if you can just help us understand the P and L impact of the acquisition and what that should mean at the top and the bottom line, please? Speaker 200:15:33Yes, sure, Jason. Thanks for being on the call asking the question. I'll take the first part and James can speak to the second. Yes, Beauty Bio, as you said, We've for quite some time have been leaning into device systems in the beauty space. We already have a strong complement of devices in our core business, but we're missing certain key areas of IP that we believe are critical to We continue to lean into the world's leading device positioning that we have. Speaker 200:16:04And so that certainly was a big part of that Business also the capabilities of the team, the founder there and the owner of that business It's very good. They have strong omni channel capabilities and all. We do see that business sitting Separate and distinct from Nu Skin, while we look at synergies across the RISE portfolio moving forward. And James maybe you Speaker 300:16:30can Yes. Thank you for the question. So BeautyBio, it's a smaller acquisition, But yes, very important to the strategic direction of our future with our enterprise strategy. And so the impacts on the back half of the year are relatively pretty small. And you can get more information on that as you look at the disclosures around the acquisition. Speaker 300:16:53The uplift in revenue is around $10,000,000 to $15,000,000 in the back half and there's a slight increase to our G and A pressure in the back half of the year. Speaker 400:17:05Got it. Thanks. And then just on China, it's nice to see the constant currency sales inflection and the trend in the affiliate count, you obviously got there sooner than expected and understanding that comps are pretty easy. Can you give us some perspective on what drove that upside? And at this point, is it your view that the China business has troughed and that we should see year over year Speaker 200:17:36Provide her perspectives as well as she works directly with the team there. Yes, as I mentioned, we remain cautiously optimistic in that market. More from the macro perspective, we all read the reports coming out of China and we understand the economic uncertainties in that market. Our businesses Is generally seeing good recovery in those critical KPIs at the channel level as you mentioned in affiliates And brand reps or sales representatives over there, we use a different model in China. And so that's good. Speaker 200:18:08I think the from the product side as well. We're seeing good uptake on a new product line, TRME there. And so we're optimistic. Connie, what would you Speaker 500:18:18I would add that certainly we are cautious as the country and our sales leaders Begin to be more active, have the opportunity and certainly the capability to engage with customers Much more closely than they have been over the past year and a half, two years, of course. We saw some nice uplift, certainly sequentially in the affiliate Account growth as well as sales leader growth, which gives us also a strong indicator and some confidence as the onboarding of a new Product launch also begins to take hold and we're looking forward to that continue. Speaker 400:18:58Got it. Thank you for that. And then James, maybe one more for you. For the guidance for full year 2023, I mean for 2Q, you Really landed at the midpoint of your constant currency sales guide. But if my math is right, it looks like you're actually taking down the implied 2H guide by about 4%. Speaker 400:19:19I know you mentioned just general caution on the macros, but is there anything else that's Driving that, is it conservatism or is there something more to that? Speaker 300:19:29Yes. I think our main factors is Just evaluating the first half results and the way the markets and regions have come in. The other major factor in that is, foreign currency. When we look at it, the way it's Rolling through compared to our original guidance. As we go through and we look at currencies like the yen, the dollar is actually remained Stronger than what our initial projections were. Speaker 300:19:53So we ran that through the model through the back half of the year and that's another large part of that adjustment down. Speaker 400:20:00Got it. Thanks so much guys. I'll pause there. Speaker 200:20:03Hey, Jason. Sorry, one other comment just on First question before we move on, on the Beauty Bio side, because I don't think I adequately maybe represented some of the elements on that strategically. You all know for a long time Nu Skin has really been a beauty and wellness company that on a core Our product categories and the like. And I think over time what we've learned through just industry overall beauty and wellness industry Looking at that, we see our businesses being highly undervalued for the products and the offering that we have. And I think there's a lot we can and need to learn at an enterprise level from a total shareholder return perspective on how we better position ourselves for the products and the brands we represent as opposed to the channel through which those products are distributed. Speaker 200:20:55And so there's just a lot to learn from these from whether we call them indie beauty or fashion beauty brands That I believe will benefit shareholders long term and benefit our core business as we learn how to better represent ourselves for those products And the innovations that we have, it's just a critical part of our transformational journey. So that's all I'd add to that piece. Speaker 400:21:21Got it. Thanks so much for that color. Speaker 300:21:24Thanks, Jason. Operator00:21:26Thank you. And our next question coming from the line of Blake Anderson with Jefferies. Your line is open. Speaker 600:21:34Hi, guys. Appreciate the time. Just wanted to ask on the guidance, a follow-up question on that. I think you mentioned you Expect to show a return to growth in Q4. Just was wondering if you could kind of rank, the main factors that give you that confidence. Speaker 600:21:48Thank you. Speaker 200:21:50Yes, sure. Blake, just a couple of thoughts and James can back in as well on this. But certainly as we continue to look at The China activities and the trends there, we're feeling optimistic that that will continue. And then I think with WellSpa. Io, this is a major category disrupting product. Speaker 200:22:16For us, it will be our 1st wellness and beauty product. So it's a body product that a lot of our Asia The businesses are very nutrition focused. The TR90 brand is very strong there. And we just see this as an opportunity to kind of bridge the world to devices And IoT connected devices and bring those more and more into our Asia businesses as well. So those are the 2 key factors for Sustaining a return to growth guide. Speaker 200:22:45Anything James on that? Speaker 300:22:46Yes. The only other thing that I would add to that is just as we go through and we look at the revenue mix Between our different revenue generating segments that shift has come in different ways. So China Is a big part of that in the back half and then coupled with the product launches, we see the back half of the year going through with Speaker 500:23:12Let me add one more thing. This is Connie. I believe this new program that we have just launched literally today, the EMPOWURSTART program Adds very nicely to generating momentum and energy to attract, to motivate and to help Our current sales leaders attracted new affiliates into the channel and coupled with the very strong unique Innovative launch of Wellstar. Io, we really have a nice lineup to allow for new customer acquisitions, customer retention as well as help further along in affiliate successful journey through our business. Speaker 600:23:59That's really helpful. And then just wanted to ask on the BeautyBio acquisition. I think you mentioned The revenue number of $10,000,000 to $15,000,000 in the second half and then some slight G and A pressure. Can you talk at all about Maybe accretion expectations or just broader synergy impacts, any way to kind of size that up over the next 12 months or so? Speaker 200:24:23Yes. And James can speak to the technical accounting. That's not my expertise. From a synergies perspective, as we from our RISE point of view, we clearly have opportunities in manufacturing, in scaling some of our services, as well across. And so I do think there are accretive opportunities there. Speaker 200:24:47Our main focus with that business is to sustain growth moving forward as they continue to grow throughout the U. S. Market and And ensuring that we're providing support and services to enable that. While again, we utilize some of their IP capabilities To help us on the core business continue to grow our dominant leadership position there in Beauty Device Systems Brands. But James, anything else you'd say? Speaker 200:25:14Yes. Speaker 300:25:14I would just say again, look at our disclosures in the 10 Q because they have more detail as to the pro form a statements What that company is from a number perspective. And then the purchase accounting on the acquisition is The drag that you'll see come through in G and A, but with the way we look at BeautyBio and the way we position that, how we how the Nu Skin Core Benefits from that IP and technology, we see some uplift through that going forward throughout the next several years. Speaker 600:25:51Got it. And then last one from us. I think you mentioned some of the impacts in the international markets From price increases, I was wondering if you could talk a little bit more about the U. S. Consumer, any kind of change in how They're behaving in Speaker 200:26:06the last few months. Yes. Speaker 300:26:09The U. S. Has been Speaker 200:26:10a really interesting business For all of us as we watch the economic reports coming out from the government, etcetera, generally what we're finding with ours There are trade off decisions that are being made. Some industries continue to do really well around experiential economy and even kind of Basic CPG type of activities in broader consumer products. We've found that there are some trade off decisions that we're seeing in our higher end products here. And I do think that's a leveling effect in the sense that I don't see this as a long term issue. I just think it's an adjustment as Consumers and households are balancing discretionary spend. Speaker 200:26:58But yes, it's a real question mark For us as we all try to watch and observe the economy and what's going on there. Very helpful. Thank you for all the help. Thanks Blake. Operator00:27:15Thank you. And our next question coming from the line of Mark Astrachan with Stifel, your line is open. Speaker 700:27:23Hi, this is Chris Bohn on for Mark Astrachan. Speaker 200:27:28Hey, Chris. Speaker 700:27:29So just kind of more broadly on the BeautyBio acquisition. So basically, What's Nu Skin kind of getting from the acquisition? And if it's basically the technology, why couldn't it have developed it more internally? And basically, what could Nu Skin have done on its own versus What Beauty Bio can do? Thanks. Speaker 200:27:57Yes, I think yes, Chris, good question. I think we always look at kind of build by borrow Type of value valuations as we look to different things. And again, I want to be clear that this BeautyBio brand is an Exciting omni channel brand. It's one that I think is cut from similar cloth to us from a product philosophy, clean beauty, Very modern approach to kind of their go to market. So there's a lot of value in that business there. Speaker 200:28:29When I talk about the technology and the IP specifically, when you really get into patents and holdings in microneedling and hydration and facial, Those are 2 really burgeoning and growing product categories. Certainly with the right R and D and workarounds, There's ways to approach those markets, but when we see a great company with a great approach that can get us They're faster and into markets that we believe will benefit not only Beauty Bio, but our Nu Skin Core as well as we continue to expand that device systems platform, hydration facial and microneedling are 2 big opportunities. We also continue to see per the last question consumer trade offs and consumer spending and the more that we can provide in home services Like hydration facial or microneedling that typically has been more of an aesthetician driven service model, that's a business we know really With products like Galvanic Spa, and frankly even WellSpa IO that's coming out. So we just see this as a complementary approach To us moving faster and faster into this device and connected device world. And I think on their side, again, they get access to Manufacturing to services and know how that they don't have as a smaller brand that's growing. Speaker 200:29:56So I think we see it as synergistic and a faster way to get to where we need to go. Operator00:30:09Thank you. And our next question in queue coming from the line of Linda Bonweiser with D. A. Davidson, your line is open. Speaker 800:30:19Yes, hello. I apologize I missed Seller or how do they distribute their product currently? And then are you going to just integrate this brand and product into your direct selling And the sales force will be able to sell the product. Is that the plan here? Speaker 200:30:43Hi, Linda. Yes, no worries. You can read the transcripts as well. So I appreciate you joining. Yes. Speaker 200:30:49No, I think for BeautyBio, they are not a direct sales company. They really started out in television shopping 11 or 12 years ago. They're really very, very rapidly expanding at the omni channel space, so strong in Ulta Sephora as well as a lot of department stores. In fact, they have a full footprint in Ulta, which is a pretty remarkable thing for a young beauty brand to get into. And so that's kind of how they work today. Speaker 200:31:18No, as we said, Beauty Bio will continue to operate independently. We will look at their IP and we'll look at opportunities to incorporate some of that technology into our Nu Again, business, but we don't plan to integrate those 2. At this point in time, although there are Some synergistic value adds that each business will have independently. Speaker 800:31:46Okay. And just related to that, I'm just curious, USANA, Which I follow. They're actually making some acquisitions because they want to explore other channels. So they're buying like products that are Sold in other channels like regular retail and they're keeping them separate. So is that what you're doing? Speaker 800:32:09I mean, are you kind of doing a learning Experience here with experimenting in those beauty channels and is that kind of part of why you're doing this acquisition? It's Speaker 200:32:22no, it's more so we've spoken and I'm going back in time, it's probably We should speak more to at a future Investor Day around our overall enterprise strategy. As we look forward into the future, We have been moving down this path to building our integrated beauty and wellness platform. And over time, we see Nu Skin Enterprises in our RISE business becoming more and more of what we call refer to as an ecosystem, a beauty, wellness and lifestyle ecosystem of brands and companies that synergistically provide solutions to market that help people in their beauty, wellness and lifestyle needs. And so For us, it's I guess you can call it explorations, but it's more around aiming towards an enterprise strategy that serves the beauty, wellness and lifestyle industries. And so we are certainly Eager to learn from our partner companies and the various investments we've made over the past 5 or 6 or 7 years, As we lean into that broader vision of building out this beauty, wellness and lifestyle ecosystem, But it is part of a longer term strategy that we probably need to dive into more at a future Investor Day. Speaker 800:33:40Okay. And then I was just wondering, can you remind me, I thought the TR, what TRME or something, the personalized version was supposed to launch in maybe North America sometime in 2023. Has that launch occurred yet? Speaker 200:33:57Yes. So no, it has not yet and you're spot on. So there's a TR90 brand that was introduced several years ago. And then the TR Me, Which is the customized version is just beginning to roll out market by market. I think Q4 of last year went into Taiwan or so, Korea in Q1 and then China Q2 with the formal launch going into Q3. Speaker 200:34:22Market by market, it's rolling out. With the U. S. Market as we continue to observe the weight management sector, it is a pretty cloudy space as you know And I think it's still yet to be said exactly how we bring this customization or personalization And Weight Management System 2 to be truly differentiated here. So we're really leaning in and learning in Asia where this Business is really quite unique. Speaker 200:34:53There aren't many of the companies that are here in a more crowded market in the U. S. Aren't there. And so we're kind of exploring there and learning and understanding how personalization fits with the bigger strategy. But While we continue to observe what's going on here, we do anticipate it coming here, but we need to do it at the right time. Speaker 800:35:17So I'm just curious because I follow that weight loss space and of course there's been so much publicity over those GLP-one drugs, are those drugs growing prevalent? Is that kind of what's making you rethink that launch a little bit? Speaker 200:35:33Yes. I think it's very with the other businesses that we follow as well, it's just a very big question mark of how that's going to float And traditionally, our approach has not been through pharmaceuticals. That's not really Our approach, we really kind of look at more of the nutraceutical approach or nutritional approach And healthy lifestyle management. So we are observing it. We're from our product philosophy of all of the good, none of the bad, How we lean into that, we just need to observe it longer. Speaker 200:36:08Meanwhile, we continue to lean into it in Asia where I think our product value Approach and nutrition and healthy lifestyle approach fits our direction better and I think works in Asia Quite well. And so we'll continue to observe for a little while longer. Speaker 800:36:29Is the TRME a powder or like a tablet product? Speaker 200:36:34Yes, it's actually it's a series of different products. So we have powders, we have supplements and it's A customizable set of products that can be assembled per the customer's needs, Help through an app or an assessment offering that helps them to get to the right product for their needs. Okay. I think we are through all of the questions. I just wanted to close By saying thank you to all of you that were able to attend and asking questions. Speaker 200:37:20As I mentioned previously, we're in a very Continuously interesting time as we continue to work towards our transformation and new vision 2025 and building out Our broader beauty, wellness and lifestyle ecosystem, we continue to make strategic moves in that direction while pivoting in the near term To ensure that we're addressing the factors that we face today, and we'll continue to keep you well abreast of those decisions and those pivots So that you're familiar with our plan. So thanks for joining. We look forward to chatting with you again next quarter. Bye bye.Read morePowered by Conference Call Audio Live Call not available Earnings Conference CallNu Skin Enterprises Q2 202300:00 / 00:00Speed:1x1.25x1.5x2x Earnings DocumentsSlide DeckPress Release(8-K)Quarterly report(10-Q) Nu Skin Enterprises Earnings HeadlinesIs Nu Skin Enterprises, Inc. (NUS) the Best Cosmetics Stock to Buy for 2025?April 18 at 4:25 PM | msn.comStockNews.com Downgrades Nu Skin Enterprises (NYSE:NUS) to HoldApril 10, 2025 | americanbankingnews.com$2 Trillion Disappears Because of Fed's Secretive New Move$2 trillion has disappeared from the US government's books. The reason why is a new, secretive move being carried out by the Fed that has nothing to do with lowering or raising interest rates... but could soon have an enormous impact on your wealth.April 19, 2025 | Stansberry Research (Ad)Nu Skin Enterprises to Announce First Quarter 2025 Financial ResultsApril 2, 2025 | businesswire.comIs Nu Skin Enterprises, Inc. (NUS) the Best Household Stock to Buy According to Hedge Funds?March 25, 2025 | msn.comIs Now The Time To Look At Buying Nu Skin Enterprises, Inc. (NYSE:NUS)?March 24, 2025 | finance.yahoo.comSee More Nu Skin Enterprises Headlines Get Earnings Announcements in your inboxWant to stay updated on the latest earnings announcements and upcoming reports for companies like Nu Skin Enterprises? Sign up for Earnings360's daily newsletter to receive timely earnings updates on Nu Skin Enterprises and other key companies, straight to your email. Email Address About Nu Skin EnterprisesNu Skin Enterprises (NYSE:NUS), together with its subsidiaries, engages in the development and distribution of various beauty and wellness products worldwide. It offers skin care devices, cosmetics, and other personal care products, including ageLOC LumiSpa and ageLOC LumiSpa iO; and nutricentials skin care products. The company also provides wellness products, such as LifePak nutritional supplements, ageLOC TR90 weight management system, and Beauty Focus Collagen+. In addition, it is involved in the research and product development of skin care products and nutritional supplements. The company sells its products under the Nu Skin, Pharmanex, and ageLOC brands through retail stores, website, digital platforms, and independent direct sellers and marketers, as well as a service center. Nu Skin Enterprises, Inc. was founded in 1984 and is headquartered in Provo, Utah.View Nu Skin Enterprises ProfileRead more More Earnings Resources from MarketBeat Earnings Tools Today's Earnings Tomorrow's Earnings Next Week's Earnings Upcoming Earnings Calls Earnings Newsletter Earnings Call Transcripts Earnings Beats & Misses Corporate Guidance Earnings Screener Earnings By Country U.S. Earnings Reports Canadian Earnings Reports U.K. Earnings Reports Latest Articles Archer Aviation Unveils NYC Network Ahead of Key Earnings Report3 Reasons to Like the Look of Amazon Ahead of EarningsTesla Stock Eyes Breakout With Earnings on DeckJohnson & Johnson Earnings Were More Good Than Bad—Time to Buy? 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There are 9 speakers on the call. Operator00:00:00Ladies and gentlemen, thank you for standing by. Welcome to Nu Skin Enterprises Second Quarter 2023 Earnings Conference Call. At this time, all participants are in a listen only mode. After the speakers' presentation, there will be a question and answer Please note that today's conference may be recorded. I will now hand the conference over to your speaker host for today, Mr. Operator00:00:30Scott Pond, Vice President of Investor Relations. Please go ahead. Speaker 100:00:35Thanks, Olivia, and good afternoon, everyone. Today on the call with me are Ryan Napierski, President and CEO Connie Tain, Chief Global Growth Officer and James Thomas, CFO. On today's call, comments will be made that include some forward looking statements. These statements involve risks and uncertainties and actual results may differ materially from those discussed or anticipated. Please refer to today's earnings release and our SEC filings for a complete discussion of these risks. Speaker 100:01:05Also during the call, certain financial numbers may be discussed that differ from comparable numbers obtained in our financial statements. We believe these non GAAP numbers assist in comparing period to period results in a more consistent manner. Please refer to our investor website for any required reconciliation of non GAAP numbers. And with that, I'll turn the call over to Ryan. Speaker 200:01:26Thanks, Scott. Hello, everyone. Thanks for joining us today. In Q2, we continued to advance key initiatives enabling New Vision 2025, our multi year transformation to becoming the world's leading integrated beauty and wellness company that's powered by our dynamic affiliate opportunity platform. While we remain confident in the direction and future outcome of our strategy, The persistence of macro headwinds has made the journey more challenging than expected, especially over the past several quarters. Speaker 200:01:54Nevertheless, we remain committed to our strategic Investing in the future through Empower Me personalization, social commerce and our digital ecosystem, while pivoting our action plan based on near term needs in the business, which I'll speak to in just a moment. Our 2nd quarter revenue was $500,300,000 while earnings per share were $0.54 Both revenue and EPS were in line with our guidance and up on a sequential basis, mostly reflecting 8% year over year growth in Mainland China, where momentum continued to build ahead of plan. With ongoing economic uncertainties in the market, we remain cautiously optimistic given The healthy growth of paid affiliates and sales leaders during the quarter, both encouraging signs leading to sustained second half growth. Our growth in China was offset by general softness in other markets, driven in large part by macro related pressures Negatively impacting overall consumer sentiment and spending, aggressive strategic price increases over the past several quarters around the globe to combat margin pressures have Taken their toll on customer acquisition, which has led to sluggish sales channel performance, most notably in developing markets, including Southeast Asia Pacific, Europe and Africa and Latin America. In the Americas and South Korea, we launched new products including new color lash and brow serum, As well as TRME, which performed below expectations due in large part to declines in our channel dynamics impacting paid affiliates and sales leader counts. Speaker 200:03:26In the second half, we will be doubling down on efforts to stabilize consumer demand and regenerate growth in the sales channel, While continuing to focus on our long term New Vision 2025 Business Transformation, let me briefly describe our plans for the remainder of the year. We're in the final stages of preparation for the launch of the company's 1st holistic wellness and beauty device, AgeLock WellSpa IO. This device system which helps users restore, revitalize and recover their bodies will be introduced in several markets in Q3 and is expected to be rolled out in nearly all markets by the end of 2023. WellSpa. Io will be our 2nd connected device building upon what we've learned from the launch of Our ageLOC LumiSpa IO, which has generated more than 6,000,000 connected treatments to date, helping us learn more about the needs of our customers. Speaker 200:04:20WellSpa. Io will be complemented with an enhanced interactive IO experience in our Vera app that will coach users through their optimal journeys. With the introduction of this next device, we expect to make steady progress towards our annual goal of 15% of revenue coming from connected device systems on our way to the longer term target of 30% of revenue by 2025. 2nd, affiliate powered social commerce. We're doubling down on our efforts to accelerate growth of our sales channel with the introduction of a new channel growth program in most of our markets called Empower Start. Speaker 200:04:57This new program is focused upon motivating brand affiliates in their journey to becoming new brand representatives and sales leaders. Empower Start aligns with our Empower Me Creator program introduced in Q2 to focus our channel development efforts on both early and developing leaders Critical for regenerating growth in the channel, we anticipate that these two programs working together will bolster both affiliate and sales leaders in the second half and Motivate customer acquisition. Also, please note as you look at our paid affiliate numbers, we have adjusted the eligibility requirements For rewards in some markets to more narrowly focus on those affiliates who are actively building a consumer base, This adjustment will roll out in additional markets over the next several quarters. And third, our digital ecosystem. We continue to see solid adoption of our Verra and Stella apps, which are central to our initiatives around leveraging the power of a robust digital ecosystem By enabling us to drive deeper connections with customers and affiliates, we're well on our way to hitting our full year targets of monthly active users for both apps and we'll begin transitioning to focus on growing customer acquisition, conversion and lifetime value through deeper connections. Speaker 200:06:16Also in June, we began the implementation of Equinox, our new e commerce global platform in North America. This new platform significantly expands the transactional scale of our business as we lean further into social commerce. Despite some early growing pains, migrating to A new platform will significantly expand our ability to create a more dynamic customer experience while enhancing operational efficiencies. Now regarding our RISE ecosystem, we're pleased to report 33% year over year growth in RISE As manufacturing performed well in the quarter and booked orders remain strong through year's end, RISE continues to grow to as well as enable our broader enterprise transformation. We made 2 important investments for our future in the Q2. Speaker 200:07:11First, as you saw from our previous release, we completed the acquisition of BeautyBio, an omnichannel and clinically proven clean skincare and beauty device brand. The company's approach and mission are closely aligned with our core values and our enterprise strategy. BeautyBio has unique device IP and hydration facial for our core Nu Skin business. For BeautyBio, our unique expertise in devices, manufacturing and Technology will help this business reach its potential as part of the RISE ecosystem. Beauty Bio will continue to operate as an independent business as we seek mistake in Life DNA, a leading DNA assessment and recommendation technologies company. Speaker 200:08:12We believe that personalization in the beauty, wellness and lifestyle will deepen over time to the genetic level and that DNA will become an increasingly important source of information for our consumers to understand their personal care and wellness needs that can influence the quality and longevity of their lifespan. While it's too early to discuss the application to our business, our investment is indicative of our commitment to evolving our core Nu Skin business Through personalization and when combined with developing technologies like AI, we believe it will help Nu Skin become a meaningful disruptor in the beauty, wellness and Lifestyle space. So to wrap it up, the agility of our organization is a key strength as we adapt our business and tactics This more challenging environment. While the pillars of New Vision 2025 have not changed, understandably, we're adjusting time and cadencing factors as needed. In addition, we are reemphasizing other critical aspects of the core business, including safeguarding the enterprise and optimizing profitability. Speaker 200:09:16And we remain highly strategic in our approach to allocating capital and prioritizing investment decisions. So with that, let me turn the time over to James to take you through our financials in more detail. James has a long history with the company having served as our Chief Accounting Officer for the past several years. He's had a strong background in the wellness space and has been instrumental in leading various elements of our strategic transformation and resource prioritization efforts. So James, take it away. Speaker 100:09:44Thank you, Ryan, and thanks Speaker 300:09:46for joining us today. I look forward to working alongside this forward thinking management team As we work toward achieving New Vision 2025 and accelerating our core business, while we build out our expansive enterprise ecosystem strategy to generate long term value for our shareholders and all stakeholders. I'll provide a brief Q2 financial review and then give initial Q3 guidance and speak to our full year 2023 projections. For more information, please visit our Investor Relations website. For the Q2, we generated revenue within our prior guidance range at $500,300,000 with a larger than expected negative foreign currency impact of 3% or $16,400,000 Our reported earnings per share of $0.54 landed near the high end of our guidance range Aided in part by our strict cost control measures, our Q2 reported gross margin was 72.9%, which was down 70 basis points versus the prior year period due to our RISE Manufacturing segment making up a higher percentage of overall revenue. Speaker 300:10:52This decline was partially offset by improving margins in the Nu Skin core due to growth in China, in our RISE Manufacturing segment due to higher throughput to our expanding CPG customer base. We are also pleased with the 60 basis point sequential improvement as we execute on Project Accelerate, Our cost optimization initiative, which focuses on driving margin improvement with margin accretive products and improved operational efficiencies. Gross margin for the core Nu Skin business was 77.2%, a sequential improvement of 80 basis points. Selling expense as a percentage of revenue was 37%, 2 10 basis points lower due in large part to growth in our manufacturing segment, which now represents 9% of our total revenue and does not carry selling expense. The lower selling expense can also be attributed to the sales compensation program in China as they operate under a different model. Speaker 300:11:57For the core Nu Skin business, selling expense was 40.2%. As part of our focus on operational efficiencies, General and administrative expense was $137,000,000 or 27.4 percent compared to $141,600,000 or 25.3 percent in the prior year period. Our operating margin for the quarter was 8.5% compared to 9.2% in the prior year period. The other income expense line reflects a $5,400,000 expense compared to an $8,600,000 expense in the prior year period. During the quarter, we paid $19,500,000 in dividends and did not repurchase any stock. Speaker 300:12:46Considering the first half results, a stronger than expected U. S. Dollar and recent acquisitions, Let me now provide initial Q3 projections and updated 2023 annual guidance ranges for revenue and EPS. For Q3 2023, we are projecting sequential improvements with revenue of $500,000,000 to $540,000,000 including a negative foreign currency impact of 1% to 2%. This projection reflects continued macro challenges and factors and modest impact From the introduction of our AgeLock WellSpa IO system, our Q3 EPS guidance is $0.54 to $0.69 and assumes a projected Q3 tax rate of 18% to 28%. Speaker 300:13:34For the full year 2023, We are projecting revenue of $2,000,000,000 to $2,080,000,000 which includes a 2% to 3 unfavorable foreign currency impact. We are anticipating reported earnings per share of $2.15 to $2.45 or 2 point The first quarter restructuring charge of $9,800,000 Our guidance assumes an annual tax rate of 16% to 26%. While the current macro environment remains uncertain, impacting our near term projections, we continue to believe that the future opportunities to accelerate our business We'll expand as we invest in our key strategic imperatives supporting our enterprise growth strategy. We are committed to continuing our operational improvement journey and believe our strong balance sheet and proven expense management discipline position us well for long term success. And with that, operator, we will now open the call for questions. Operator00:14:41Thank you. And our first question coming from the line of Jason Brennan with Citi. Your line is open. Speaker 400:15:02Great. Thanks, operator. First of all, James, congrats on the call or congrats on the role. Looking forward to working with you more going forward. And the decision making process behind it. Speaker 400:15:21It sounds like it was very attractive IP driven, but any more color on that would be great. Then if you can just help us understand the P and L impact of the acquisition and what that should mean at the top and the bottom line, please? Speaker 200:15:33Yes, sure, Jason. Thanks for being on the call asking the question. I'll take the first part and James can speak to the second. Yes, Beauty Bio, as you said, We've for quite some time have been leaning into device systems in the beauty space. We already have a strong complement of devices in our core business, but we're missing certain key areas of IP that we believe are critical to We continue to lean into the world's leading device positioning that we have. Speaker 200:16:04And so that certainly was a big part of that Business also the capabilities of the team, the founder there and the owner of that business It's very good. They have strong omni channel capabilities and all. We do see that business sitting Separate and distinct from Nu Skin, while we look at synergies across the RISE portfolio moving forward. And James maybe you Speaker 300:16:30can Yes. Thank you for the question. So BeautyBio, it's a smaller acquisition, But yes, very important to the strategic direction of our future with our enterprise strategy. And so the impacts on the back half of the year are relatively pretty small. And you can get more information on that as you look at the disclosures around the acquisition. Speaker 300:16:53The uplift in revenue is around $10,000,000 to $15,000,000 in the back half and there's a slight increase to our G and A pressure in the back half of the year. Speaker 400:17:05Got it. Thanks. And then just on China, it's nice to see the constant currency sales inflection and the trend in the affiliate count, you obviously got there sooner than expected and understanding that comps are pretty easy. Can you give us some perspective on what drove that upside? And at this point, is it your view that the China business has troughed and that we should see year over year Speaker 200:17:36Provide her perspectives as well as she works directly with the team there. Yes, as I mentioned, we remain cautiously optimistic in that market. More from the macro perspective, we all read the reports coming out of China and we understand the economic uncertainties in that market. Our businesses Is generally seeing good recovery in those critical KPIs at the channel level as you mentioned in affiliates And brand reps or sales representatives over there, we use a different model in China. And so that's good. Speaker 200:18:08I think the from the product side as well. We're seeing good uptake on a new product line, TRME there. And so we're optimistic. Connie, what would you Speaker 500:18:18I would add that certainly we are cautious as the country and our sales leaders Begin to be more active, have the opportunity and certainly the capability to engage with customers Much more closely than they have been over the past year and a half, two years, of course. We saw some nice uplift, certainly sequentially in the affiliate Account growth as well as sales leader growth, which gives us also a strong indicator and some confidence as the onboarding of a new Product launch also begins to take hold and we're looking forward to that continue. Speaker 400:18:58Got it. Thank you for that. And then James, maybe one more for you. For the guidance for full year 2023, I mean for 2Q, you Really landed at the midpoint of your constant currency sales guide. But if my math is right, it looks like you're actually taking down the implied 2H guide by about 4%. Speaker 400:19:19I know you mentioned just general caution on the macros, but is there anything else that's Driving that, is it conservatism or is there something more to that? Speaker 300:19:29Yes. I think our main factors is Just evaluating the first half results and the way the markets and regions have come in. The other major factor in that is, foreign currency. When we look at it, the way it's Rolling through compared to our original guidance. As we go through and we look at currencies like the yen, the dollar is actually remained Stronger than what our initial projections were. Speaker 300:19:53So we ran that through the model through the back half of the year and that's another large part of that adjustment down. Speaker 400:20:00Got it. Thanks so much guys. I'll pause there. Speaker 200:20:03Hey, Jason. Sorry, one other comment just on First question before we move on, on the Beauty Bio side, because I don't think I adequately maybe represented some of the elements on that strategically. You all know for a long time Nu Skin has really been a beauty and wellness company that on a core Our product categories and the like. And I think over time what we've learned through just industry overall beauty and wellness industry Looking at that, we see our businesses being highly undervalued for the products and the offering that we have. And I think there's a lot we can and need to learn at an enterprise level from a total shareholder return perspective on how we better position ourselves for the products and the brands we represent as opposed to the channel through which those products are distributed. Speaker 200:20:55And so there's just a lot to learn from these from whether we call them indie beauty or fashion beauty brands That I believe will benefit shareholders long term and benefit our core business as we learn how to better represent ourselves for those products And the innovations that we have, it's just a critical part of our transformational journey. So that's all I'd add to that piece. Speaker 400:21:21Got it. Thanks so much for that color. Speaker 300:21:24Thanks, Jason. Operator00:21:26Thank you. And our next question coming from the line of Blake Anderson with Jefferies. Your line is open. Speaker 600:21:34Hi, guys. Appreciate the time. Just wanted to ask on the guidance, a follow-up question on that. I think you mentioned you Expect to show a return to growth in Q4. Just was wondering if you could kind of rank, the main factors that give you that confidence. Speaker 600:21:48Thank you. Speaker 200:21:50Yes, sure. Blake, just a couple of thoughts and James can back in as well on this. But certainly as we continue to look at The China activities and the trends there, we're feeling optimistic that that will continue. And then I think with WellSpa. Io, this is a major category disrupting product. Speaker 200:22:16For us, it will be our 1st wellness and beauty product. So it's a body product that a lot of our Asia The businesses are very nutrition focused. The TR90 brand is very strong there. And we just see this as an opportunity to kind of bridge the world to devices And IoT connected devices and bring those more and more into our Asia businesses as well. So those are the 2 key factors for Sustaining a return to growth guide. Speaker 200:22:45Anything James on that? Speaker 300:22:46Yes. The only other thing that I would add to that is just as we go through and we look at the revenue mix Between our different revenue generating segments that shift has come in different ways. So China Is a big part of that in the back half and then coupled with the product launches, we see the back half of the year going through with Speaker 500:23:12Let me add one more thing. This is Connie. I believe this new program that we have just launched literally today, the EMPOWURSTART program Adds very nicely to generating momentum and energy to attract, to motivate and to help Our current sales leaders attracted new affiliates into the channel and coupled with the very strong unique Innovative launch of Wellstar. Io, we really have a nice lineup to allow for new customer acquisitions, customer retention as well as help further along in affiliate successful journey through our business. Speaker 600:23:59That's really helpful. And then just wanted to ask on the BeautyBio acquisition. I think you mentioned The revenue number of $10,000,000 to $15,000,000 in the second half and then some slight G and A pressure. Can you talk at all about Maybe accretion expectations or just broader synergy impacts, any way to kind of size that up over the next 12 months or so? Speaker 200:24:23Yes. And James can speak to the technical accounting. That's not my expertise. From a synergies perspective, as we from our RISE point of view, we clearly have opportunities in manufacturing, in scaling some of our services, as well across. And so I do think there are accretive opportunities there. Speaker 200:24:47Our main focus with that business is to sustain growth moving forward as they continue to grow throughout the U. S. Market and And ensuring that we're providing support and services to enable that. While again, we utilize some of their IP capabilities To help us on the core business continue to grow our dominant leadership position there in Beauty Device Systems Brands. But James, anything else you'd say? Speaker 200:25:14Yes. Speaker 300:25:14I would just say again, look at our disclosures in the 10 Q because they have more detail as to the pro form a statements What that company is from a number perspective. And then the purchase accounting on the acquisition is The drag that you'll see come through in G and A, but with the way we look at BeautyBio and the way we position that, how we how the Nu Skin Core Benefits from that IP and technology, we see some uplift through that going forward throughout the next several years. Speaker 600:25:51Got it. And then last one from us. I think you mentioned some of the impacts in the international markets From price increases, I was wondering if you could talk a little bit more about the U. S. Consumer, any kind of change in how They're behaving in Speaker 200:26:06the last few months. Yes. Speaker 300:26:09The U. S. Has been Speaker 200:26:10a really interesting business For all of us as we watch the economic reports coming out from the government, etcetera, generally what we're finding with ours There are trade off decisions that are being made. Some industries continue to do really well around experiential economy and even kind of Basic CPG type of activities in broader consumer products. We've found that there are some trade off decisions that we're seeing in our higher end products here. And I do think that's a leveling effect in the sense that I don't see this as a long term issue. I just think it's an adjustment as Consumers and households are balancing discretionary spend. Speaker 200:26:58But yes, it's a real question mark For us as we all try to watch and observe the economy and what's going on there. Very helpful. Thank you for all the help. Thanks Blake. Operator00:27:15Thank you. And our next question coming from the line of Mark Astrachan with Stifel, your line is open. Speaker 700:27:23Hi, this is Chris Bohn on for Mark Astrachan. Speaker 200:27:28Hey, Chris. Speaker 700:27:29So just kind of more broadly on the BeautyBio acquisition. So basically, What's Nu Skin kind of getting from the acquisition? And if it's basically the technology, why couldn't it have developed it more internally? And basically, what could Nu Skin have done on its own versus What Beauty Bio can do? Thanks. Speaker 200:27:57Yes, I think yes, Chris, good question. I think we always look at kind of build by borrow Type of value valuations as we look to different things. And again, I want to be clear that this BeautyBio brand is an Exciting omni channel brand. It's one that I think is cut from similar cloth to us from a product philosophy, clean beauty, Very modern approach to kind of their go to market. So there's a lot of value in that business there. Speaker 200:28:29When I talk about the technology and the IP specifically, when you really get into patents and holdings in microneedling and hydration and facial, Those are 2 really burgeoning and growing product categories. Certainly with the right R and D and workarounds, There's ways to approach those markets, but when we see a great company with a great approach that can get us They're faster and into markets that we believe will benefit not only Beauty Bio, but our Nu Skin Core as well as we continue to expand that device systems platform, hydration facial and microneedling are 2 big opportunities. We also continue to see per the last question consumer trade offs and consumer spending and the more that we can provide in home services Like hydration facial or microneedling that typically has been more of an aesthetician driven service model, that's a business we know really With products like Galvanic Spa, and frankly even WellSpa IO that's coming out. So we just see this as a complementary approach To us moving faster and faster into this device and connected device world. And I think on their side, again, they get access to Manufacturing to services and know how that they don't have as a smaller brand that's growing. Speaker 200:29:56So I think we see it as synergistic and a faster way to get to where we need to go. Operator00:30:09Thank you. And our next question in queue coming from the line of Linda Bonweiser with D. A. Davidson, your line is open. Speaker 800:30:19Yes, hello. I apologize I missed Seller or how do they distribute their product currently? And then are you going to just integrate this brand and product into your direct selling And the sales force will be able to sell the product. Is that the plan here? Speaker 200:30:43Hi, Linda. Yes, no worries. You can read the transcripts as well. So I appreciate you joining. Yes. Speaker 200:30:49No, I think for BeautyBio, they are not a direct sales company. They really started out in television shopping 11 or 12 years ago. They're really very, very rapidly expanding at the omni channel space, so strong in Ulta Sephora as well as a lot of department stores. In fact, they have a full footprint in Ulta, which is a pretty remarkable thing for a young beauty brand to get into. And so that's kind of how they work today. Speaker 200:31:18No, as we said, Beauty Bio will continue to operate independently. We will look at their IP and we'll look at opportunities to incorporate some of that technology into our Nu Again, business, but we don't plan to integrate those 2. At this point in time, although there are Some synergistic value adds that each business will have independently. Speaker 800:31:46Okay. And just related to that, I'm just curious, USANA, Which I follow. They're actually making some acquisitions because they want to explore other channels. So they're buying like products that are Sold in other channels like regular retail and they're keeping them separate. So is that what you're doing? Speaker 800:32:09I mean, are you kind of doing a learning Experience here with experimenting in those beauty channels and is that kind of part of why you're doing this acquisition? It's Speaker 200:32:22no, it's more so we've spoken and I'm going back in time, it's probably We should speak more to at a future Investor Day around our overall enterprise strategy. As we look forward into the future, We have been moving down this path to building our integrated beauty and wellness platform. And over time, we see Nu Skin Enterprises in our RISE business becoming more and more of what we call refer to as an ecosystem, a beauty, wellness and lifestyle ecosystem of brands and companies that synergistically provide solutions to market that help people in their beauty, wellness and lifestyle needs. And so For us, it's I guess you can call it explorations, but it's more around aiming towards an enterprise strategy that serves the beauty, wellness and lifestyle industries. And so we are certainly Eager to learn from our partner companies and the various investments we've made over the past 5 or 6 or 7 years, As we lean into that broader vision of building out this beauty, wellness and lifestyle ecosystem, But it is part of a longer term strategy that we probably need to dive into more at a future Investor Day. Speaker 800:33:40Okay. And then I was just wondering, can you remind me, I thought the TR, what TRME or something, the personalized version was supposed to launch in maybe North America sometime in 2023. Has that launch occurred yet? Speaker 200:33:57Yes. So no, it has not yet and you're spot on. So there's a TR90 brand that was introduced several years ago. And then the TR Me, Which is the customized version is just beginning to roll out market by market. I think Q4 of last year went into Taiwan or so, Korea in Q1 and then China Q2 with the formal launch going into Q3. Speaker 200:34:22Market by market, it's rolling out. With the U. S. Market as we continue to observe the weight management sector, it is a pretty cloudy space as you know And I think it's still yet to be said exactly how we bring this customization or personalization And Weight Management System 2 to be truly differentiated here. So we're really leaning in and learning in Asia where this Business is really quite unique. Speaker 200:34:53There aren't many of the companies that are here in a more crowded market in the U. S. Aren't there. And so we're kind of exploring there and learning and understanding how personalization fits with the bigger strategy. But While we continue to observe what's going on here, we do anticipate it coming here, but we need to do it at the right time. Speaker 800:35:17So I'm just curious because I follow that weight loss space and of course there's been so much publicity over those GLP-one drugs, are those drugs growing prevalent? Is that kind of what's making you rethink that launch a little bit? Speaker 200:35:33Yes. I think it's very with the other businesses that we follow as well, it's just a very big question mark of how that's going to float And traditionally, our approach has not been through pharmaceuticals. That's not really Our approach, we really kind of look at more of the nutraceutical approach or nutritional approach And healthy lifestyle management. So we are observing it. We're from our product philosophy of all of the good, none of the bad, How we lean into that, we just need to observe it longer. Speaker 200:36:08Meanwhile, we continue to lean into it in Asia where I think our product value Approach and nutrition and healthy lifestyle approach fits our direction better and I think works in Asia Quite well. And so we'll continue to observe for a little while longer. Speaker 800:36:29Is the TRME a powder or like a tablet product? Speaker 200:36:34Yes, it's actually it's a series of different products. So we have powders, we have supplements and it's A customizable set of products that can be assembled per the customer's needs, Help through an app or an assessment offering that helps them to get to the right product for their needs. Okay. I think we are through all of the questions. I just wanted to close By saying thank you to all of you that were able to attend and asking questions. Speaker 200:37:20As I mentioned previously, we're in a very Continuously interesting time as we continue to work towards our transformation and new vision 2025 and building out Our broader beauty, wellness and lifestyle ecosystem, we continue to make strategic moves in that direction while pivoting in the near term To ensure that we're addressing the factors that we face today, and we'll continue to keep you well abreast of those decisions and those pivots So that you're familiar with our plan. So thanks for joining. We look forward to chatting with you again next quarter. Bye bye.Read morePowered by