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Nu Skin Benefitting from Demographic and Economic Tail Winds

August 17, 2013 | About:
ABN

ABN

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Nu Skin is a leading direct sales company founded in 1984, with operations in 53 markets worldwide. The company develops and distributes anti-aging personal care products and nutritional supplements under the Nu Skin and Pharmanex category brands and, more recently, both product ranges under the ageLOC anti-aging brand. The company operates globally with approximately 89% of 2012 revenue came from outside of the United States.

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Revenues have grown strongly and consistently as the company has benefited from numerous demographic and economic tailwinds. Namely people are growing old, obesity is increasing, women are earning more money and Asian economies are expanding rapidly. Additionally Nu Skin has successfully managed and revised its product range with a pipeline of innovative products and regular relaunches that have kept the company fresh and appealing to consumers as well as distributors who are essential for a direct sales company.

Last week the company announced second quarter results with earnings growth of 29.8% as revenue grew 15% to $682.9 million reflecting healthy trends throughout the global business. In Greater China, second-quarter revenue increased 35% to $269.1 million. North Asian revenues grew 12% to $196.8 million. Revenue in the Americas improved 17% to $84.3 million.

Looking forward, the company raised annual sales guidance by $90 million to $2.91 to $2.95 billion and now expect earnings per share to be $5.05 to $5.15. The increase reflects the significant growth already achieved in the first half and the expectation that the upcoming launch of ageLOC TR90 and the strength of the business in several key markets will lead to another record year as annual revenue.

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Consensus earnings forecasts on Yahoo Finance point to the sames with annual growth averaging 22.7% being predicted for the next five years.

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Risk Disclaimer: This article does not constitute a recommendation to buy or sell. Investing in stocks or other securities and derivatives is a high risk activity and not suitable for everyone. It is strongly recommended that individuals should consult with a SEC registered investment advisor prior to making any investment decisions.

Disclosure: The author holds no positions in the above mentioned stocks

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