In Q2, Nu Skin Sees Rays of Light in China

Nu Skin Enterprises, Inc., the multi-level marketer of personal care products and nutritional supplements, reported second-quarter revenues that were weighed down by changes in foreign currency, but the company reported positive developments in Greater China, its largest market.

Revenues of US$560.2 million were down 14 percent from $650 million in the prior-year period, though Nu Skin said foreign currency fluctuations negatively impacted revenues by 7 percent. Net income rose to $44.7 million from $19.5 million in the year-ago period.

In Greater China—a region comprising Mainland China, Hong Kong, Macau and Taiwan—revenues declined 13 percent to $200.1 million from $229.9 million in the second quarter of 2014. But the results in the region represented an improvement from first-quarter revenues ($187.4 million).

Revelations early last year that Nu Skin was under investigation by the Chinese government led to a slowdown in the company’s sales growth. The Chinese government ultimately fined Nu Skin $524,000 for selling products that were not registered for the direct selling channel.

“We are pleased the business performed at the high end of our expectations for the second quarter," Nu Skin Chief Executive Truman Hunt said in a press release. “Additionally, we are encouraged by growth in the number of sales leaders sequentially, including a 19-percent increase in sales leaders in Mainland China. We believe that this trend signals growing sales leader energy as we build toward the introduction of our new ageLOC [anti-aging] products in the second half of the year."

Provo, Utah-based Nu Skin suffered its largest sales decline in EMEA, its smallest market, where revenues were down 32 percent to $35.6 million. In the Americas, revenues declined just 7 percent to $83.5 million. Revenues in North Asia, Nu Skin’s second-largest market, decreased 12 percent to $172.9 million, while revenues in South Asia/Pacific fell 17 percent to $68 million.

Earlier this year, Nu Skin revealed that the Securities and Exchange Commission was investigating certain aspects of its operations in China in connection with a 2013 charitable donation that the company made. A Nu Skin spokesperson did not immediately respond Friday to a request for comment on the status of the investigation. The SEC declined to comment.