Nu Skin (NUS) Q3 2026 Earnings Call Transcript

DATE

Thursday, Nov. 5, 2026

CALL PARTICIPANTS

• Vice President of Investor Relations - B.G. Hunt
• President and Chief Executive Officer - Ryan Napierski
• interim Chief Financial Officer - Chelsea Lantz

TAKEAWAYS

• Revenue -- $311.0 million, reflecting ongoing pressures in the core business and an 18% decline in the total customer base.
• Adjusted EPS -- $0.10, which was in line with management guidance despite a challenging operating environment.
• Rhyz Manufacturing Revenue -- $56.8 million, increasing 19.3% year over year and partially offsetting core business declines.
• Total Customers -- 609,469, representing an 18% decrease versus the prior-year quarter.
• Paid Affiliates -- 116,449, a 10% year-over-year decline across the global sales network.
• Sales Leaders -- 26,995, down 13% year over year as the company works to rebuild channel momentum.
• Total Gross Margin -- 65.0% compared to 70.5% last year, primarily driven by the revenue mix shift toward the manufacturing platform.
• Core Nu Skin Gross Margin -- 76.6%, a decrease from 77.7% in the prior year.
• Selling Expenses -- 33.2% of revenue, down from 35.8% in the previous year.
• General and Administrative Expenses -- $93.9 million, representing a $10.9 million year-over-year decline as management rightsized its fixed cost base.
• Adjusted Operating Margin -- 3.7%, compared to 5.9% in the prior-year quarter.
• Interest Expense -- $3.5 million, down from $4.1 million in the third quarter of 2025.
• Cash and Cash Equivalents -- $164.9 million as of Sept. 30, 2026.
• Total Debt -- $203.7 million, following continued debt reduction efforts during the quarter.
• Dividend Payments -- $2.9 million returned to shareholders in the third quarter.
• Share Repurchase Authorization -- $137.3 million remains under the current authorization, with zero shares repurchased during the period.
• Prysm iO Device Count -- 41,000 units placed globally since the device was introduced.
• Platform Engagement -- 4.5 million total scans completed through the Prysm iO platform through the end of the third quarter.
• Scan-to-Purchase Conversion -- 10%, which doubled month over month following the rollout of the version 2.0 app update in late August.
• LifePak Sales -- Increased nearly 3% year to date, serving as a key proof point for the intelligent wellness platform.
• Q4 Revenue Guidance -- $310 million to $340 million, including an anticipated 1% foreign currency tailwind.
• Q4 Adjusted EPS Guidance -- $0.11 to $0.21, excluding anticipated transition costs.
• Full-Year Revenue Guidance -- $1.26 billion to $1.29 billion, representing a 13% to 15% annual decline.
• Full-Year Adjusted EPS Guidance -- $0.55 to $0.65, after excluding non-cash impairment charges and transition expenses.
• Organizational Transition Costs -- $5 million in remaining cash-based costs expected in the fourth quarter related to the East-West operating model implementation.

Need a quote from a Motley Fool analyst? Email pr@fool.com

RISKS

• Lantz stated, "Third quarter revenue was $311 million within the guidance range, including an approximate 1.1% or $3.9 million foreign currency headwind," noting a continued impact on top-line performance.
• Napierski stated, "While our results reflect ongoing pressures in the core business, we remain focused on our strategic priorities that we have outlined over the last year," acknowledging weakness in the direct-selling segment.

SUMMARY

Nu Skin Enterprises, Inc. (NYSE:NUS) reported third-quarter revenue of $311 million, which aligned with management's previous guidance despite a double-digit decline in the core business customer base and affiliate counts. The company is implementing an East-West operating model to realign manufacturing closer to consumers, intending to optimize gross margins and improve speed to market. Management is also preparing for a full market launch in India during the first half of 2027 while expanding its intelligent wellness platform through artificial intelligence integrations. These strategic efforts focus on stabilizing the sales channel and improving long-term operational efficiency as the company navigates a challenging global environment.

• The Rhyz manufacturing segment posted 19.3% revenue growth, partially offsetting volume declines in the core beauty and wellness segments.
• Management hosted 12,000 sales leaders at a global convention in Japan to preview a new anti-aging product line focused on women's health scheduled for rollout in mid-2027.
• The East-West structure leverages manufacturing hubs in both the U.S. and China to better serve regional markets and optimize fixed costs.
• CEO Napierski noted that the version 2.0 app update features a new intelligence AI integration that provides personalized product recommendations based on user health scans.
• The company is shifting its sales leader strategy toward long-term skill development in social media commerce rather than relying on short-term promotional incentives.
• Management confirmed that the scan-to-purchase conversion rate for the Prysm iO platform doubled to 10% within one month of the latest software update.

INDUSTRY GLOSSARY

• Rhyz: A synergistic ecosystem of consumer, technology, and manufacturing companies owned by Nu Skin Enterprises.
• Prysm iO: An intelligent wellness device platform used for nutritional health scanning and personalized product recommendations.
• LifePak: Nu Skin's flagship brand of nutritional supplements.
• Paid Affiliates: Brand affiliates and members of the sales force in Mainland China who earned sales compensation during a specific period.
• Sales Leaders: Members of the independent sales force who meet specific monthly qualification requirements to lead teams.
• East-West operating model: A strategic realignment of resources and manufacturing to serve Eastern and Western global hemispheres more efficiently.

Full Conference Call Transcript

Operator: Please be advised that today's conference is being recorded. I would now like to hand the conference over to your first speaker today, VP of Investor Relations, B.G. Hunt. Please go ahead.

B.G. Hunt: Thanks, Janelle, and good afternoon, everyone. I am joined by Ryan Napierski, President and CEO, and by our interim CFO, Chelsea Lantz. Today, we will be sharing Nu Skin's Q3 2026 results and providing guidance for the remainder of the year. Before I turn the time over to Ryan, let me point out that on today's call, comments will be made that include forward-looking statements. These statements involve important risks and uncertainties, and actual results may differ materially from those discussed or anticipated. Please refer to today's earnings release and our SEC filings for a complete discussion of these risks. Also during the call, certain financial numbers may be discussed that differ from comparable numbers obtained in our financial statements.

We believe these non-GAAP numbers assist in comparing period-to-period results in a more consistent manner. Please refer to our investor website, ir.nuskin.com, for any required reconciliation of these non-GAAP numbers. With that, I would like to now turn the call over to Ryan.

Ryan Napierski: Thanks, B.G. Good afternoon, everyone, and thanks for joining for our third quarter call. We delivered revenue of $311 million and adjusted EPS of $0.10, both within our guidance range. Our Rhyz manufacturing platform had an exceptional quarter, posting strong year-over-year revenue growth. While our results reflect ongoing pressures in the core business, we remain focused on our strategic priorities that we have outlined over the last year. Our Chief Operating Officer, Chayce Clark, has been leading the team to simplify, focus, and execute upon each of them. These priorities are, number one, advancing our integrated anti-aging platform. Number two, strengthening our channel through improved sales force activation and development.

Three, preparing for a formal launch of India early next year. And four, improving our operating model to support greater profitability over time. Let me briefly update you on each of these priorities. First, we continue to make progress in advancing our integrated anti-aging platform with Prysm iO playing an increasingly important role in our approach to personalized wellness. Prysm is designed to help consumers better understand their nutritional health status and engage more consistently with our wellness product solutions, creating a differentiated experience that connects technology, products, and ongoing customer relationships. Since launching Prysm through the end of Q3, we have now placed approximately 41,000 devices globally and completed 4.5 million scans.

During the quarter, we rolled out version 2.0 of the app, which delivers a meaningfully improved user experience powered by our new intelligence AI integration. Since the app update, we have more than doubled our scan-to-purchase conversion rate to 10%, which tells us that the consumers are taking action when we get them more engaged with the platform. We also see this in demand for LifePak, our flagship nutritional supplement, as sales grew nearly 3% year to date, a meaningful proof point given the broader revenue environment. We remain encouraged by the potential of this intelligent wellness platform to deepen customer engagement, support recurring product consumption, and provide our sales leaders with meaningful differentiation in the marketplace.

In September, we hosted our global Nu Skin LIVE convention in Yokohama, Japan, with approximately 12,000 sales leaders from around the world. We previewed upcoming innovations in our anti-aging portfolio with a particular focus on women's health, which will begin rolling out mid-2027. We will share our future product pipeline plans with you as we move into next year. Second, we continue to invest in the capabilities necessary to strengthen our talented and committed global sales channel. We recognize that innovative products alone are not enough to drive sustainable growth. Equally important is our ability to empower our dedicated brand affiliates and sales leaders to effectively introduce our products, engage with our customers, and build successful businesses.

Over the past several years, we focused on improving the simplicity, accessibility, and effectiveness of our sales compensation incentive system. We have also begun expanding our investments into leadership learning and development by providing unique opportunities for leaders to acquire and strengthen critical success capabilities in selling products, acquiring customers and brand affiliates, building sales teams, and leading large organizations. At LIVE, we held a dedicated leadership training session with industry-renowned trainer Eric Worre and our Team Elite top sales leaders. We have also just wrapped up a two-day leadership management event, or management mastermind event earlier this week with nearly 2,000 of our most engaged sales leaders from around the globe.

These investments are designed to further empower our talented sales leaders and strengthen their development of the next generation of leadership for Nu Skin. Although our overall customer and sales metrics remain under pressure, we believe these new investments are important to rebuilding engagement and productivity, which is the foundation for more sustainable performance in our channel into the future. Third, we continue to prepare for our anticipated formal launch of India during the first half of 2027. India represents an attractive long-term market opportunity supported by its large consumer population, growing interest in health and wellness, and an expanding entrepreneurial economy.

We have acquired many learnings during our pre-marketing period, and our teams are focused now on refining operational, product, and commercial preparations necessary to support a successful and scalable full market launch. We are approaching this opportunity with a long-term perspective as we focus on building the right foundation for sustainable growth. Finally, we remain focused on improving efficiency and profitability of our global business. As we continue to align our operations with current market conditions, we are evaluating opportunities to simplify our organization, improve productivity, and better leverage our global capabilities.

Chayce is also leading an effort across the company to realign the organization around our East-West structure, which will enable the company to meet the unique needs of our business across these two hemispheres. Each region is now focused on building and executing successful go-to-market plans, including incentive roadmaps, product introductions, and promotions in order to improve customer and affiliate acquisition and retention. We believe that aligning our organization around this East-West structure will also result in greater efficiencies and cost performance as we leverage our manufacturing hubs in both the U.S. for our Western market needs and China to better serve our Eastern markets.

Moving manufacturing closer to the customer is expected to improve gross margin, speed to market, and fixed cost optimization over time. While there is more work ahead, we believe disciplined execution against these priorities will help the company improve efficiencies and profitability as our business performance strengthens. Looking ahead to the fourth quarter, our focus remains on driving customer and affiliate engagement through the holiday seasons as we anticipate sequential revenue growth. As we prepare for 2027, we remain committed to the strategic priorities we have outlined throughout the year. Again, advancing our anti-aging platform, strengthening our sales channel, preparing for India's formal launch, and improving our operating efficiency.

We believe these initiatives position Nu Skin for improved performance and sustainable growth long term. With that, I will turn the time over to Chelsea to review our financials.

Chelsea Lantz: Thanks, Ryan. Good afternoon, everyone. Today, I will review our third quarter results and discuss our outlook for the remainder of the year. Third quarter revenue was $311 million within the guidance range, including an approximate 1.1% or $3.9 million foreign currency headwind. Reported earnings per share were negative $0.02 or a positive $0.10, excluding organizational transition costs related to the implementation of our East-West operating model and certain other charges. Adjusted earnings per share were in line with our guidance range. Gross margin for the quarter was 65% compared to 70.5% in the prior year, primarily reflecting the revenue mix between our Nu Skin core and Rhyz businesses.

Within the core Nu Skin business, gross margin was 76.6% compared to 77.7% in the prior year. We remain committed to our gross margin improvement initiatives through pricing discipline, product mix optimization, and operational efficiencies within the core business. Selling expense as a percentage of revenue was 33.2% compared to 35.8% in the prior year. Within the core Nu Skin business, selling expense was 40.9% compared to 41.7% in the prior year. We continue to target core selling expense around 40%. General and administrative expenses declined by $10.9 million year-over-year to 30.2% of revenue compared to 28.8% in the prior year, as we continue to right-size our fixed cost base to current operations while preserving investment in key strategic priorities.

Adjusted operating margin for the quarter was 3.7% compared to 5.9% in the prior year. We continue to make progress on the implementation of the East-West operating model announced last quarter to better align our resources with the needs of our markets. We currently anticipate approximately $5 million in remaining cash-based organizational transition costs in the fourth quarter, which have been excluded from our adjusted earnings guidance. On the balance sheet, we ended the quarter with $164.9 million of cash and cash equivalents and reduced our total debt to $203.7 million. We remain focused on disciplined capital allocation and returned $2.9 million to shareholders through dividends during the quarter.

We did not repurchase shares, leaving $137.3 million remaining under our current authorization. Turning to our outlook for the fourth quarter and full year. For the fourth quarter, we expect revenue in the range of $310 million-$340 million, including an anticipated foreign currency tailwind of approximately 1%. We expect reported earnings per share in the range of $0.05-$0.15 or adjusted earnings per share of $0.11-$0.21. For the full year, we now expect revenue of $1.26 billion-$1.29 billion, including an anticipated foreign currency headwind of approximately 1%.

We expect annual reported earnings per share of negative $5.08 to negative $4.98, reflecting the impact of the second quarter goodwill impairment and deferred tax valuation allowance, which did not affect our cash position or ability to execute on our strategic plan. On an adjusted basis, we expect annual earnings per share of $0.55-$0.65, excluding these non-cash items, certain other year-to-date charges, and anticipated fourth quarter organizational transition costs. After these adjustments, our guidance reflects an effective tax rate for the year of approximately 39%. As discussed today, we are taking deliberate steps to strengthen the business, from optimizing our cost structure to evolving our operating model.

Our focus remains on disciplined execution and improving profitability, and we're confident these actions will position us for sustainable growth in the periods ahead. With that, operator, we'll now open the line for questions.

Operator: Thank you. At this time, we will conduct a question-and-answer session. As a reminder, to ask a question, you will need to press star 11 on your telephone and wait for your name to be announced. To withdraw your question, please press star 11 again. Please stand by while we compile the Q&A roster. Our first question comes from the line of Dave Storms with Stonegate. Your line is now open.

Dave Storms: Hey, Ryan and Chelsea. Thanks for taking my questions.

Ryan Napierski: Hey, Dave.

Dave Storms: Afternoon. I know you guys are busy between India and Prysm, so I'll try to be brief here. Just a couple. When, Ryan, you were talking about strengthening the sales channel, and obviously trying to grow the customer base, I recognize that sometimes the customer base can follow the leaders can follow the customers, can be a bit of a push and pull there. Are there any incentives to highlight here that might bring that back beyond what you talked about with all the leadership initiatives they have?

Ryan Napierski: Yeah. A lot of the leadership initiatives, Dave, that we are focused on are really around how do we enhance the customer acquisition and brand affiliate acquisition, and that really is the focus for us. As we have learned over the course of the last few years, incentives and short-term promotions are not as helpful at building channel momentum as more of a sustained programmatic approach. When I mentioned kind of the three levers, you have the compensation system itself, the incentive roadmap that layers on top of that kind of recognize and rewards key development. Those have kind of been our two levers that we've been really working to ensure that they're right in the market.

Some compensation plan enhancements have been rolling around the world over the course of this past year to rightsize the incentives for customer acquisition versus team building, for instance. Then we've been working, especially the second half, to realign our incentive roadmap, again, these key milestone areas, to ensure that those are fully aligned for the 2027 year. This third piece, though, that we're talking about really is this learning and development platform that we're talking about for our leadership, and it really is focusing on core skills and capabilities that are needed in the market. A lot of that is related to just the changes in the marketplace over the course of the last five to 10 years.

Today, the way that our affiliates build the business in terms of sharing products on social media, posting, sharing, commenting, DMing, that's a very different set of skills and capabilities than the way they used to do the job, what we used to call them distributors, where they would buy products wholesale and sell those retail. The vast majority of our customers today transact on our platform directly through links, attributed links through social media, et cetera. We've realized that these skills, these capabilities, and the shift, and it's very different by market, different markets at different stages, but that's really where we need to focus. Less on the short term, more on the systemic and sustainable skills and capabilities.

Chelsea Lantz: Yeah. Dave, I would just add, and I said in my prepared remarks, but as we look at these changes and balancing our approach from a strategic standpoint, we do feel like 40% is the right level from a cost perspective. That's how we're modeling it in our models for the core business.

Dave Storms: Understood. That's great. I really appreciate that. Just did want to maybe get a temperature check on Prysm. I know we've talked in the past about 50,000-60,000 units. I appreciate the new commentary around 10% scan to purchase conversion rate, add in version 2.0 app, that it sounds like there's a lot of tailwinds there. I think honing in on the conversion rate, how should we think about the saturation there? I mean, is 10% just getting started? Is that what you would expect to see in the medium term? Just any thoughts there.

Ryan Napierski: Yeah. No, it's pretty interesting. So, one of the, as I mentioned, you have a If we just kind of do the simple math, and you'll have to do it for me here, but 4.5 million scans over 41,000 units. We're talking about many scans per unit that we are seeing, and some of that is self-scanning, other is the guest scanning. We kind of are tracking all of this data differently. The 10% really is kind of an aggregation through that process. I think there's a lot of room for improved conversion when you think of the total scans.

But this device is unique because it plays a role for both acquiring new customers as well as retaining customers on the device. So, for example, I scan myself twice a week. I'm already on a subscription, right? Obviously, my conversion, with each of my scans and such, that's not driving that 10% rate. I really do believe, and we're still in the early stage of this, what we have learned with the 2.0 and this new intelligence AI, the increased interactivity between the app and the customer with respect to their product, their personalized product recommendation, and the insights they gather through that AI algorithmic approach is really creating a greater engagement level.

We are happy to see We're very early. I think 2.0 rolled out the latter part of August. It was last week of August. We're really talking about a kind of a doubling within a month's time, and I think there's room upwards. I don't know that I could give you an exact number, but we certainly haven't hit the top there. I would hope to see that can increase significantly from there, the smarter that our intelligence gets in understanding that customer needs and kind of helping them navigate which product solution set, we do a good, better, best recommendation, which set is going to best meet their needs. Those needs also, by the way, include their pocketbook.

Obviously, inflation is heavy right now. Our app does look in kind of a good, better, best scenario to say where is the essential nutrition that you need versus kind of a more extensive and then optimal level. We do try to give consumer choices to play into that.

Dave Storms: That's great, . I really appreciate that. That's all I have. I appreciate the time, and good luck in the next quarter.

Ryan Napierski: All right. Thanks, Dave.

Chelsea Lantz: Thanks, Dave.

Operator: Thank you. I'm showing no further questions at this time. I would now like to turn it back to President and CEO Ryan Napierski for closing remarks.

Ryan Napierski: Well, truly, we're in the day-to-day here at Nu Skin, working with our sales leaders around the world, our teams in nearly 50 markets around the world. It's always interesting to me when we get to go interact with this team and our teams and to see the dedication of our employees around the world, the dedication of our sales leaders to the mission of this company to be a global force for good by empowering people to look, feel, and live better. They feel this truly to their bones, and it's very inspiring to me. Our mission is absolutely needed in the world today.

We're absolutely committed to delivering it, to leveraging technology to do it better through our sales force, who is ultimately the key to our success. With that, we'll plan to keep you updated quarter to quarter as our journey continues, and we thank you for your support and your ongoing interest as we move forward. Thank you, everybody.

Operator: Thank you for your participation in today's conference. This does conclude the program. You may now disconnect.

This article is a transcript of this conference call produced for The Motley Fool. While we strive for our Foolish Best, there may be errors, omissions, or inaccuracies in this transcript. Parts of this article were created using Large Language Models (LLMs) based on The Motley Fool's insights and investing approach. It has been reviewed by our AI quality control systems. Since LLMs cannot (currently) own stocks, it has no positions in any of the stocks mentioned. As with all our articles, The Motley Fool does not assume any responsibility for your use of this content, and we strongly encourage you to do your own research, including listening to the call yourself and reading the company's SEC filings. Please see our Terms and Conditions for additional details, including our Obligatory Capitalized Disclaimers of Liability.

The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.