Revenue Performance - In 2024, the company generated revenue of $1.7 billion, with 30% coming from the United States and 70% from international markets[13][15]. - Total revenue for Nu Skin in 2024 was $1,445.5 million, a decrease of 17.5% from $1,752.5 million in 2023[63]. - Revenue from the Americas segment was $322.5 million in 2024, representing a 19% decline from $398.2 million in 2023[63]. - Revenue from Southeast Asia/Pacific was $244.8 million in 2024, down 8.4% from $267.2 million in 2023[63]. - Revenue from Mainland China decreased to $235.2 million in 2024, a 21.1% drop from $298.1 million in 2023[63]. - The Rhyz business segment generated $286.6 million in total revenue in 2024, up 32.3% from $216.6 million in 2023[63]. - Manufacturing revenue increased to $201.4 million in 2024, a 11.0% increase from $181.4 million in 2023[63]. Product Categories - Revenue from beauty products was $681.8 million (39.4% of total revenue), while wellness products generated $757.2 million (43.7% of total revenue) in 2024[24]. - The ageLOC beauty products accounted for 43% of the beauty product category revenue and 17% of total revenue in 2024[24]. - The ageLOC TRMe personalized weight wellness line became the top-selling brand in 2024, with ageLOC wellness products making up 20% of total revenue[19][25]. Customer and Affiliate Metrics - Total Customers decreased from 1,147,124 in 2022 to 831,972 in 2024, representing a decline of approximately 27.5%[45]. - Total Paid Affiliates decreased from 236,956 in 2022 to 144,874 in 2024, a decline of about 38.8%[45]. - Total Sales Leaders decreased from 48,737 in 2022 to 36,912 in 2024, reflecting a decrease of approximately 24.3%[45]. Digital Transformation and Innovation - The company is undergoing a significant digital transformation, which will require substantial expenditures over the next several years[35]. - The company is developing new digital tools and enhanced e-commerce functionality to support its sales force and improve consumer engagement[34]. - The company launched ageLOC WellSpa iO and Nu Skin RenuSpa iO connected devices, which gather consumer behavior data for personalized experiences[18]. Regulatory Environment - Regulatory scrutiny in Mainland China has increased since 2019, impacting business operations and revenue potential[66]. - Direct selling regulations in Mainland China limit compensation to a maximum of 30% of revenue generated by sales[68]. - The FDA's implementation of the Modernization of Cosmetics Regulation Act of 2022 may impose additional compliance burdens on cosmetic manufacturers[73]. - The regulatory environment for dietary supplements is becoming increasingly complex, with stricter regulations anticipated in the future[88]. Supply Chain and Manufacturing Risks - The company experienced production difficulties and quality control problems that could lead to stock outages or shortages in the market[206]. - The company faces risks related to supply chain disruptions, including potential loss of suppliers and difficulties in sourcing alternative materials, which could harm revenue[208]. - The COVID-19 pandemic has caused significant disruptions in global transportation channels, resulting in delays, quantity limits, and price increases[210]. Sales Force and Compensation - The company’s global sales compensation plan is considered one of the most generous in the direct selling industry, providing competitive advantages[50]. - The company’s sales force is primarily composed of independent contractors who are required to adhere to ethical standards and consumer protection policies[38]. - The company’s sales leaders in Mainland China are compensated under a separate model, which is competitive but distinct from the global compensation plan[181]. Challenges and Competition - The company faces significant risks associated with direct selling, including regulatory scrutiny and potential legal actions that could impact revenue and profitability[143]. - The company is challenged by shifting consumer preferences and increased competition from affiliate marketing and gig economy businesses[160]. - The company faces intense competition, with competitors having greater name recognition and financial resources, which may hinder market share[167]. Employee and Human Capital Management - The company had approximately 3,100 full- and part-time employees worldwide as of December 31, 2024, excluding about 8,200 sales employees in Mainland China[109]. - The company’s human capital management strategy includes hiring, engagement, development, and retention initiatives to address competition for qualified employees[110]. - The company’s employee wellness program, "The Best You," aims to enhance physical, emotional, intellectual, and financial wellness[117].

Core Insights - Nu Skin Enterprises, Inc. (NUS) reported fourth-quarter 2024 results with earnings surpassing estimates, while net sales declined year over year [1][2] - The company anticipates improving trends in several markets for 2025 but expects economic challenges in Greater China and South Korea [1] Financial Performance - Adjusted earnings for Q4 were 38 cents per share, up from 37 cents in the previous year, beating the Zacks Consensus Estimate of 22 cents [2] - Quarterly revenues were $445.6 million, down 8.8% year over year, with a negative impact of 4.1% from foreign currency fluctuations; on a constant-currency basis, revenues fell 4.7% [3] - Adjusted gross profit decreased 9.8% to $317.9 million, with an adjusted gross margin of 71.4%, down 70 basis points from the prior year [5] - Selling expenses declined 8.8% to $165.4 million, remaining flat as a percentage of revenues at 37.1% [6] - General and administrative expenses fell 16.6% to $120.9 million, with a percentage of revenues at 27.1%, down 260 basis points [7] - Adjusted operating income increased 10.1% year over year to $34.5 million, with an adjusted operating margin of 7.7%, up 130 basis points [7] Regional Performance - Revenue declines were noted across various regions: Americas (-12.7%), Southeast Asia/Pacific (-2.9%), Mainland China (-21.1%), Japan (-6.8%), South Korea (-30.9%), Europe and Africa (-11%), and Hong Kong/Taiwan (-21%); however, other revenues surged 66.8% year over year [8] Financial Health - At the end of the quarter, the company had cash and cash equivalents of $186.9 million, long-term debt of $363.6 million, and total stockholders' equity of $651.5 million [9] - The company declared a cash dividend of 6 cents per share, payable on March 5, 2025 [10] Future Outlook - For 2025, Nu Skin anticipates revenues between $1.48 billion and $1.62 billion, indicating a decline of 15-6% from the previous year [12] - EPS for 2025 is projected to be between $3.45 and $3.85, or 90 cents to $1.30 when excluding gains from the Mavely transaction [13] - For Q1 2025, revenues are expected to be between $345 million and $365 million, representing a decline of 17% to 13% [13]

Financial Data and Key Metrics Changes - Fourth quarter revenue reached $445.6 million, exceeding previous guidance despite a 4% negative foreign currency impact of $20.1 million [33] - Adjusted earnings per share for Q4 was $0.38, surpassing guidance and slightly ahead of the prior year's $0.37 [34] - Full year revenue totaled $1.73 billion, within original guidance despite an unexpected foreign exchange headwind of approximately $60 million [34] - Adjusted gross margin for Q4 was 71.4%, down from 72.1% in the prior year, while the core Nu Skin business adjusted gross margin was 76.6%, down from 77.4% [34] Business Line Data and Key Metrics Changes - The launch of the AgeLock TrueFase peptide retinol complex contributed to Q4 results, with the new TrueFace product showing strong market acceptance [12][13] - The RISE segment achieved 28% year-on-year growth in Q4, indicating strong performance in this area [13] - A $38.8 million write-down was recorded this quarter as part of a strategy to streamline the product portfolio [35] Market Data and Key Metrics Changes - Growth was noted in Latin America and parts of Southeast Asia, while persistent headwinds remained in China and South Korea [11] - The Americas segment showed constant currency growth, with particular strength in Latin America [11] - The company anticipates revenue declines of 3% to 11% for 2025, excluding the impact of the Mable business from the prior year [44] Company Strategy and Development Direction - The company aims to strengthen its core Nu Skin business, accelerate innovation in its intelligent beauty and wellness platform, and improve operational performance and efficiency [15] - A new business model is being rolled out to enhance the entrepreneurial model for affiliates, focusing on social-first selling [18] - The company plans to refine its product portfolio to meet emerging consumer needs and increase focus on developing markets [19] Management's Comments on Operating Environment and Future Outlook - Management noted ongoing economic challenges in South Korea and China, with consumer spending dropping and savings rates increasing [51] - The company is optimistic about growth opportunities in Latin America, Southeast Asia, and Japan for 2025 [60][61] - The management expressed confidence in achieving meaningful earnings growth despite top-line pressures in certain markets [46] Other Important Information - The strategic transaction involving the sale of the Mable business for $250 million was highlighted, which generated a five times return on investment [14] - The company has made significant progress in strengthening its balance sheet, reducing debt by $110 million funded through cash from operations [41] - The restructuring plan is now materially complete, positioning the company for a more sustainable future [39] Q&A Session Summary Question: Economic challenges in South Korea and China - Management acknowledged ongoing economic challenges in these regions, with consumer spending dropping and local brands gaining priority [50][52] Question: Markets expected to return to growth in 2025 - Management highlighted Latin America, Southeast Asia, and Japan as key markets with potential for growth in 2025 [60][61] Question: Performance on Amazon - Management discussed the importance of maintaining brand image on Amazon and noted that the strategy has been beneficial in minimizing discount reselling [66][70]

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]