American direct-selling personal care company Nu Skin Enterprises has posted first quarter revenue of US$543.3m, a 19 percent decrease compared to revenues of US$671.1m generated during the same period last year.
Revenue in the quarter was negatively impacted by 7 percent due to foreign currency fluctuations, the company states. The devaluation of the Venezuelan bolivar is said to have been particularly damaging to Nu Skin’s revenues.
Across the regions in which the company operates, its greatest constant currency revenue came from China at US$187,367m, followed by North Asia at US$172,066m, Americas (US$79,872m), South Asia (US$70,872m) and EMEA (US$33,210m). Revenue across all regions was down fromto last year’s figures.
Ritch Wood, Chief Financial Officer, commented, “While foreign currency continues to negatively impact our results, our first-quarter revenue was in line with our forecast and we expect the fundamentals of the business to improve going forward.
“Looking forward, we anticipate second-quarter revenue of US$540 to US$560 million with earnings per share of US$0.72 to US$0.75. For the year, we anticipate revenue of $2.45 to $2.50 billion, reflecting a negative impact from foreign currency of approximately 7 percent, with earnings per share of approximately US$3.65 to US$3.75.”
The company’s operating margin for the quarter was 12.6 percent, compared to 15.1 percent in the first quarter of 2014. Gross margin during the quarter was 80.7 percent, versus 84.1 percent in the prior-year period.
Selling expenses were 43.1 percent of sales in the first quarter, compared to 46.7 percent in the prior-year period. General and administrative expenses were 25.0 percent of sales compared to 22.4 percent. Other income/expense reflected an expense of US$12.3 million compared to US$17.5 million in the prior year.
Yet Truman Hunt, President and Chief Executive Officer, remains positive about the company’s outlook commenting, “Our business continues to make good progress as we prepare to introduce a number of new products in the second half of the year.
“We are encouraged by growing enthusiasm among our sales force in advance of launching our new ageLOC skin care and nutritional products. While currency headwinds proved to be slightly more challenging than expected, we continue to believe we are well positioned for growth in the back half of the year.”
“We are also pleased to have been approved to commence direct selling activities in two new cities in Guangdong province,” continued Hunt. “We believe in the potential of China’s large and growing market and look forward to expanding our footprint in the country.”