Slight 3Q Sales Growth Misses Nu Skin Expectations

Slight 3Q Sales Growth Misses Nu Skin Expectations

PROVO, UtahNu SkinEnterprises Inc. (NYSE:NUS) announced its third quarter results will likely fallshort of the companys expectations, as results from operations in China,Japan and the United States are all off target. Management projects net revenuesto inch up 2 percent to $290 million, shy of its original estimate of between$298 million and $303 million. Accordingly, quarterly earnings are now projected to bebetween $0.24 and $0.26 per share, down from earlier estimates of between $0.29and $0.30 per share. As a result, the company (www.nuskin.com) is downgradingfourth quarter revenue guidance to $300 million to $306 million, which wouldplace total fiscal 2005 sales at around $1.2 billion, a 5-percent growth fromthe year prior.

Management expects to report 3Q sales in China of about $24million, an 11-percent decline, and lowered its annual projections for China tobetween $100 million and $105 million, from a previous estimate of between $115million and $120 million. Truman Hunt, president and chief executive officer (CEO),explained changes to the companys sales compensation plan in China resultedin a decreased number of sales representatives in that country, where proposednew direct selling regulations could limit compensation plans.

The company noted its weaker-than-expected sales in Japan andthe United States could be attributed to its global distributor convention, heldin early October. Management speculated distributors reserved spending in orderto purchase new products launched by Nu Skin at the convention.