NU SKIN ENTERPRISES, INC. Q2 FY2025 earnings call

Ryan Napierski noted that Nu Skin delivered revenue at the high end of guidance and significantly exceeded earnings per share forecasts for Q2. Key strategic priorities include the launch of Prysm iO, an intelligent wellness platform, with limited rollout for qualified sales leaders in Q4 2025, broader launches globally in H1 2026, and consumer launches in H2 2026. The developing market strategy is performing well in Latin America, with plans for India including a Q4 2025 premarket opening for qualified sales leaders and a formal launch anticipated in mid-2026. Project Accelerate, an initiative to improve operational efficiencies, led to a Q2 operating margin of 8%. Rhyz, the innovation incubator, contributed with manufacturing growth and businesses like Mavely and LifeDNA.

In Q2 2025, Nu Skin achieved revenue of $386.1 million. Latin America saw year-over-year revenue growth of over 100%. North America faced declines due to macroeconomic pressures. Japan reported growth, benefiting from a strong subscription-based wellness business. South Korea and China experienced revenue drops due to persistent economic challenges but showed sequential improvement. The Pacific region had growth, while the rest of Southeast Asia was sluggish. Europe and Africa saw improving trends in customer and new sales leader engagement. Rhyz manufacturing reported a 17% year-over-year increase in the quarter.

For Q3 2025, revenue is projected to be between $360 million and $390 million, factoring in an expected ~1% foreign currency headwind. For 2025, Nu Skin projects revenue of $1.48 billion to $1.55 billion and earnings per share of $3.05 to $3.25, with adjusted earnings per share of $1.15 to $1.35. The back half of 2025 revenue outlook is narrowed, with Q3 earnings per share expected to be in the range of $0.25 to $0.35.

Potential risks include ongoing global uncertainties, such as tariff impacts, evolving geopolitical conditions, and concerns about consumer durability in key markets.

Q: Just want to start at the top here maybe with -- maybe just some thoughts around the puts and takes on your guidance. Great to see you guys narrow that range. But are there any initiatives or geographies that can maybe have an outsized impact that will put you on the higher end or lower end of that guidance?

A: Dave, yes, just -- maybe I'll share my thoughts and then obviously, James, can dive into it a little bit better. But I think as I mentioned through first half performance, we continue to see Latin America overperforming expectations, a little bit offset through North America, which is a key market, and we're working to improve there. Again, puts and takes, as you said, it's Korea and China. Korea, we're seeing improving trends there. China is always a big question mark, especially with the macro uncertainty there economically and just geopolitically. So those are probably for me the ones that are like top of mind would be those North America, China, Korea, whereas Europe, Southeast Asia and Japan and LatAm, I think are going to are going to do better. But James, any additional color from you?

Q: Turning to -- at the consolidated level, the cost optimization that you've been kind of driving here, it seems to really be making some strong progress. When you're thinking about it going forward, how many levers do you still see to pull there? Is there any low-hanging fruit that could continue to drive margin improvement year-over-year like we saw this quarter?

A: Yes, I'll take that question, Dave. For us, we talked about earlier about 4 consecutive quarters of sequential growth in gross margin. That is the result of cumulative efforts across the [ last 2 years ] mainly and working through the inventory and the turns to get that flow through our cost of sales, so the lower overhead will roll through. We still believe that there's still opportunity there as we've lowered our inventory levels and manage that to be really in line with our overall revenue. Selling expense, we continue to optimize for us. That's something that helps the field and generates the top line. And so we're really focused on spending efficiently where we can to make sure that we're optimizing performance. And then G&A, we're going to continue to focus on our operational footprint, like the developing market strategy that Ryan talked about in Latin America. We're looking across the scope of all of our markets and continue to look and find opportunities where we can use technology in place of physical presence or labor and continue to find opportunities where we can deliver more dollars to the bottom line. So we're going to continue our efforts, and we feel confident in our ability to navigate our forward.

Q: I am showing no further questions at this time. I would like to turn it back to Ryan Napierski for closing remarks.

A: Well, we really appreciate everyone joining the call. If you have additional questions, please reach out to B.G., James, myself to answer those. We're very, very excited about the future as it's unfolding. We were pleased with our first half results and are now very focused on second half in preparations for 2026. We're going to be driving these 3 priorities across the business of accelerating innovation with Prysm iO and our intelligent wellness platform, strengthening our core business with developing and emerging markets beginning with India and then driving operational performance and efficiency, all with an end game of strengthening shareholder value as we provide greater opportunities for our empowered sales force, affiliates and powerful leaders around the world, where we provide them opportunities to grow and empowerment initiatives is where we find success in our business. So that's what we're acutely focused on. We'll look forward to updating you in coming quarters. And so please join the calls and reach out with any questions. Thank you.