NU SKIN ENTERPRISES, INC. Q4 FY2024 earnings call

• Strengthening Nu Skin core business: Evolving the entrepreneurial business model to reward affiliates in a social-first manner, refining product portfolio including launching Mind 360 and restaging TrueFase Prestige, and focusing on developing markets like Latin America and India.
• Accelerating innovation of IO intelligent beauty and wellness platform: Integrating topical insights with bioproducts scanner data to build a beauty and wellness insights database, with Prism.Io scheduled for limited release in 2025 and global launch in 2026.
• Improving operational performance and efficiency: Evaluating every market to optimize operations, having completed the 2023 restructuring plan, and aiming to reduce the global product portfolio by more than 50% by end of 2025.

RISE segments achieved 28% year-on-year growth in Q4. The Maybelli transaction, which represented approximately 4% of the company's revenue last year, was sold for $250 million. In the core Nu Skin business, adjusted gross margin was 76.6% down from 77.4% due to a geographic shift in revenue away from China and Korea. The Americas segment had constant currency growth, and Latin America and parts of Southeast Asia showed encouraging growth.

• 2025 revenue projected in the range of $1.48 billion to $1.62 billion, including an estimated foreign currency exchange headwind of $52.5 million or 3%. Excluding Maybelli, revenue decline anticipated to be 3% to 11%.
• Earnings per share expected in the range of $3.45 to $3.85 with adjusted earnings between $0.90 and $1.30.
• First quarter 2025 revenue projected between $345 million and $365 million, with reported earnings per share in the range of $2.65 to $2.75 or $0.10 to $0.20 excluding Maybelli transaction.

• Persistent headwinds in China and South Korea due to declining consumer sentiment and shifts in shopping habits.
• Discount reselling on third-party marketplaces like Amazon hurting brand image and entrepreneurs' opportunities.
• Economic challenges in key markets impacting premium beauty and personal care categories.

Q: Can you elaborate on economic challenges in South Korea and China and their progression throughout the quarter?

A: Economic outlooks for these markets are hesitant, with consumer spending down, savings rates up, and unemployment concerns. Local teams report consumers are hesitant to spend, and discounts from local brands are a priority. Nu Skin is focused on supporting consumers through product pricing and emerging opportunities.

Q: Which markets are expected to return to growth in 2025 and what's the catalyst?

A: Latin America, Southeast Asia Pacific, Japan, and some Europe markets are expected to grow. Catalysts include deploying the developing market strategy, getting pricing right, and success in certain regions. Also, reduced declines in other segments are seen as improvement but still facing top line pressures.

Q: How is performance on Amazon in the US?

A: Amazon has been an interesting journey. Nu Skin has worked to limit discount reselling by unauthorized sellers. Retail plus products have done well, supporting affiliates and providing consumer accessibility, though numbers aren't reported separately.