Group 1: Earnings Performance - Nu Skin Enterprises reported quarterly earnings of $0.38 per share, exceeding the Zacks Consensus Estimate of $0.22 per share, and showing a slight increase from $0.37 per share a year ago [1] - The earnings surprise for the quarter was 72.73%, compared to a previous quarter where the company reported earnings of $0.17 per share against an expectation of $0.20, resulting in a surprise of -15% [2] - Over the last four quarters, the company has surpassed consensus EPS estimates three times [2] Group 2: Revenue Performance - The company posted revenues of $445.55 million for the quarter ended December 2024, surpassing the Zacks Consensus Estimate by 1.01%, but down from $488.64 million year-over-year [3] - Nu Skin has topped consensus revenue estimates two times over the last four quarters [3] Group 3: Stock Performance and Outlook - Nu Skin shares have declined approximately 8.3% since the beginning of the year, while the S&P 500 has gained 2.9% [4] - The current consensus EPS estimate for the upcoming quarter is $0.27 on revenues of $433.9 million, and for the current fiscal year, it is $0.76 on revenues of $1.8 billion [8] - The Zacks Industry Rank indicates that the Cosmetics industry is currently in the bottom 32% of over 250 Zacks industries, suggesting potential underperformance compared to higher-ranked industries [9] Group 4: Estimate Revisions and Ratings - Ahead of the earnings release, the estimate revisions trend for Nu Skin was unfavorable, resulting in a Zacks Rank 5 (Strong Sell) for the stock, indicating expected underperformance in the near future [7] - Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can be tracked by investors [6]

Financial Results Announcement - Nu Skin Enterprises announced preliminary financial results for the three-month period ended December 31, 2024 [4] - The press release containing the financial results is attached as Exhibit 99.1 to the report [4] Regulatory and Filing Information - The information provided is not deemed "filed" under the Securities Exchange Act of 1934 and will not be incorporated by reference in any filings unless specifically referenced [5] - The report includes an Interactive Data File (Inline XBRL) as part of the exhibits [6] Executive Signatory - James D. Thomas, Chief Financial Officer, signed the report on behalf of Nu Skin Enterprises, Inc. [8]

Core Viewpoint - Nu Skin Enterprises, Inc. (NUS) is expected to report a decline in both revenue and earnings for the fourth quarter of 2024, with revenue estimates at $441.1 million, reflecting a 9.7% decrease year-over-year, and earnings per share projected at 22 cents, indicating a 40.5% decline from the previous year [1][2]. Group 1: Financial Performance Expectations - The Zacks Consensus Estimate for NUS's revenues is $441.1 million, which is a decrease of 9.7% from the prior-year quarter [1]. - The earnings consensus has increased by a penny to 22 cents per share, but this still represents a 40.5% decline from the year-ago quarter [2]. - NUS has a trailing four-quarter earnings surprise average of 27.3% [2]. Group 2: Factors Impacting Performance - NUS is facing a challenging operating environment characterized by inflationary pressures, political uncertainty, and weak consumer sentiment in certain markets [3]. - The direct selling industry is experiencing pressures that are likely to affect NUS's performance, compounded by adverse currency fluctuations [3]. - Despite these challenges, NUS's Rhyz business is performing well, supported by innovation, brand building, and cost management [5]. Group 3: Revenue Projections and Management Insights - NUS announced preliminary revenues for Q4 2024, stating that the figure is at the upper end of its projected range of $410-$445 million, indicating a 9-16% decline from the previous year's reported figure [4]. - Management had previously projected adjusted earnings to be in the range of 19-29 cents per share [4]. Group 4: Earnings Prediction Model - The current model does not predict an earnings beat for NUS, as it has an Earnings ESP of +6.98% and a Zacks Rank of 5 (Strong Sell) [6].

Group 1: Company Performance - Nu Skin Enterprises Inc. (NUS) shares increased by 9.8% following the announcement of preliminary revenues for Q4 2024, which were at the upper end of the projected range of $410-$445 million, indicating a 9-16% decline from the previous year's figures [1] - The company’s subsidiary, Rhyz Inc., sold its Mavely affiliate marketing technology platform to Later for nearly $250 million, which will enhance Nu Skin's capabilities in the beauty, wellness, and lifestyle sectors [3] - The sale of Mavely resulted in a five-times return on investment for Nu Skin, which will help reduce debt and support growth in its core business, as well as enhance shareholder value through stock repurchase programs [4] Group 2: Market Challenges - The operating environment for Nu Skin's core business remains challenging due to macroeconomic factors, including inflation, political uncertainty, and weak consumer sentiment, which are expected to persist into 2025 [5] - Nu Skin's strong international presence exposes it to risks from volatile currency movements, and there is a lack of clear visibility regarding the return to growth for its direct-selling business [5] - Over the past three months, Nu Skin's shares have declined by 33.4%, compared to a 29.4% decline in the industry [6]

Core Insights - Nu Skin Enterprises Inc. reported the sale of a marketing technology platform with a transaction ROI of close to 5x since 2021 [1] Group 1: Company Performance - The cash generated from the sale is expected to be utilized for further investments [1] Group 2: Investment Strategy - The focus is on value investments, particularly in companies trading at close to 10x earnings and offering dividend yields [1]

Strategic Sale of Mavely - Nu Skin Enterprises Inc (NUS) subsidiary Rhyz Inc sold its Mavely affiliate marketing technology platform to Later for nearly $250 million, including cash and a minority equity stake in the merged Later/Mavely business [1] - The sale generated a five-times return on Nu Skin's investment in Mavely, which was acquired in 2021 [3] - Mavely will continue to provide technology and social commerce solutions to enhance Nu Skin's affiliate marketing operations [1] Impact on Nu Skin's Business - The integration of Later and Mavely will enhance Nu Skin's capabilities in expanding its beauty, wellness, and lifestyle ecosystem [2] - The transaction provides additional capital and resources for innovation in Nu Skin's core business and further investment in Rhyz companies [2] - Proceeds from the sale will reduce company debt, fund core business innovations, and enhance shareholder value through stock repurchase programs [3] Market Performance and Challenges - Nu Skin shares gained 17.6% in the past three months, outperforming the industry's decline of 17.5% [6] - The company faces challenges in its core direct-selling business due to macroeconomic factors, inflationary pressures, political uncertainty, and weak consumer sentiment in key markets [5] - Nu Skin lacks clear visibility into when its core direct-selling business might return to growth [5] Industry Comparison - Abercrombie & Fitch Co (ANF) has a Zacks Rank 1 (Strong Buy) with expected fiscal-year sales and earnings growth of 15% and 69.3%, respectively [8] - The Gap Inc (GAP) holds a Zacks Rank 1 with projected fiscal-year earnings and sales growth of 0.8% and 41.3%, respectively [9] - Helen of Troy (HELE) carries a Zacks Rank 2 (Buy) but faces expected declines of 5.3% in sales and 19.2% in earnings for the current fiscal year [10]

Acquisition Overview - Later acquires Mavely for $250 million, funded by Summit Partners [1] - The acquisition aims to enhance full-funnel marketing impact and measurable ROI for marketers while maximizing creator earnings through social commerce [1] Strategic Benefits - The deal extends Later's capabilities into the purchase funnel, enabling end-to-end creator-driven marketing from awareness to conversion [2] - Later's AI predictive analytics will leverage Mavely's first-party performance data from over 120,000 creators, who have driven over $1 billion in GMV across 1,400 major brands [2] - The combination of Later and Mavely will deliver seamless, full-funnel experiences for marketers, offering ROAS-based campaigns and driving predictable, attributable outcomes [3] Leadership and Vision - Mavely's cofounders and leadership team, including CEO Evan Wray, CTO Sean O'Brien, and CFO Kevin Kenefick, will join Later's leadership team [3] - The acquisition aligns with Later's vision to redefine how marketers and creators collaborate, empowering creators to build sustainable, income-generating businesses [3] - Mavely's CEO Evan Wray emphasizes the potential to create a more comprehensive platform that delivers value to both creators and marketers, positioning creators at the center of the marketing ecosystem [4] Future Focus - Later will focus on combining the strengths of both platforms to drive innovation, enhance creator collaboration, and help marketers plan, budget, forecast, and deliver measurable results [4] - Mavely will continue to provide a world-class creator experience, maximizing creator earnings and accelerating the vision through the business combination [4] Company Background - Later is a leader in social media and influencer marketing software, services, and data, helping brands, agencies, and creators maximize return on social through streamlined creator partnerships and campaign management [6] - Mavely is an Everyday Influencer Platform that empowers creators to monetize their content by promoting major brands, driving hundreds of millions of dollars in sales annually with attributable data from post to purchase [7]

Core Viewpoint - Nu Skin Enterprises, Inc. (NUS) is experiencing significant challenges, with a 40.1% decline in share price over the past six months, underperforming the industry and broader market indices [1][5][12] Financial Performance - In Q3 2024, Nu Skin's revenues fell 13.8% year-over-year to $430.1 million, with sales leaders down 19% and the customer base decreasing by 15% [5][10] - The company anticipates 2024 revenues between $1.70 billion and $1.73 billion, indicating a 12-14% decline from the previous year [10] - For Q4 2024, expected revenues are between $410 million and $445 million, reflecting a decline of 9% to 16% from the prior year [11] Cost Structure - Selling expenses as a percentage of revenues increased to 39% in Q3 2024 from 37.6% the previous year, with core business selling expenses rising to 43.5% [7] - The elevated cost structure poses risks to near-term profitability as revenues continue to decline [7] Macroeconomic Challenges - Persistent macroeconomic obstacles are affecting consumer spending in key markets like South Korea and China, alongside pressures in the U.S. direct selling industry [5][9] - Inflationary pressures, political uncertainty, and weak consumer sentiment are expected to persist into 2025 [9] Currency Fluctuations - Nu Skin's international presence exposes it to risks from volatile currency movements, with Q3 revenues impacted by a 3.4% negative effect from foreign currency fluctuations [6] - The company anticipates unfavorable foreign currency impacts of 1-2% and 3-4% on Q4 and 2024 revenues, respectively [6] Future Outlook - Management has lowered its 2024 outlook due to ongoing pressures in the core business, lacking clear visibility on when growth may resume [9][10] - Despite innovative launches and long-term strategies, current financial struggles suggest caution for investors in the short term [13]

Group 1: Market Trends and Stock Performance - The holiday week has seen significant gains in stocks related to diet drugs, referred to as the "vanity" trade, including IPAR, ELF, ULTA, and HIMS, alongside the Retail sector ETF (XRT) [1] - Nike (NKE) and Nu Skin (NUS) are highlighted as stocks that could perform well moving forward, with NUS showing gains today [1] Group 2: Nu Skin Company Overview - Nu Skin is an American multi-level marketing company specializing in personal care products and dietary supplements [2] - The company faced a scandal in 2016, resulting in a $47 million class-action settlement and a $750,000 fine from the SEC due to allegations of bribery [3] Group 3: Recent Developments and Financial Performance - Since 2022, Nu Skin has launched new products, including the RenuSpa iO, which are integrated beauty and wellness devices endorsed by Venus Williams [3] - In the third quarter, Nu Skin's revenue missed analyst estimates by 2.5%, but its EPS exceeded estimates by 17% [3] Group 4: Technical Analysis - The NUS stock chart indicates that since early 2023, the price has not cleared the exponential moving average (EMA), which is significant for potential breakout [3] - The EMA aligned with the 50-week and 200-week moving averages in January 2023, but they are now far apart, suggesting a compelling breakout opportunity if NUS clears the EMA [3] Group 5: Market Indicators - The Retail sector (XRT) is bullish above 84, with 80 as price support [5] - Other market indicators include pivotal price levels for major indices such as S&P 500 (575 support, 600 resistance) and Russell 2000 (new all-time high) [5]

Business Model and Free Cash Flow - Nu Skin Enterprises Inc demonstrates a proven business model with consistent long-term free cash flow generation [1] - The company has identified multiple catalysts for free cash flow growth including recent acquisitions of LifeDNA and BeautyBio [1] - New product launches such as ageLOC WellSpa iO are expected to contribute to future free cash flow growth [1] Investment Strategy and Research Focus - The research service focuses on value investments with companies trading around 10x earnings and offering dividend yields [1] - Primary research coverage includes small and mid-cap companies across multiple regions including the United States, Canada, South America, UK, France, and Germany [1] Analyst Position and Disclosure - The analyst maintains a beneficial long position in Nu Skin Enterprises Inc through various financial instruments including stock ownership, options, or other derivatives [2] - The analysis represents the independent opinion of the analyst without external compensation or business relationships with mentioned companies [2]