Nu Skin Enterprises, Inc. (NYSE:NUS) Q3 2023 Earnings Conference Call November 1, 2023 5:00 PM ET

Company Participants

Scott Pond – Vice President-Investor Relations

Ryan Napierski – President and Chief Executive Officer

James Thomas – Chief Financial Officer

Conference Call Participants

Tristen Chau – Stifel

Doug Lane – Water Tower Research

Operator

Good day, ladies and gentlemen. Thank you for standing by. Welcome to Nu Skin Enterprises' Third Quarter 2023 Earnings Conference Call. At this time, all participants are in a listen-only mode. After this speakers' presentation, there will be a question-and-answer session. [Operator Instructions] Please note that today's conference may be recorded.

I will now hand the conference over to your speaker host, Mr. Scott Pond, Vice President of Investor Relations. Please go ahead.

Scott Pond

Thanks, Olivia, and good afternoon, everyone. Today on the call with me are Ryan Napierski, President and CEO; and James Thomas, CFO. On today's call, comments will be made that include some forward-looking statements. These statements involve 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 for any required reconciliation of non-GAAP numbers.

And with that, I'll turn the call over to Ryan.

Ryan Napierski

Thanks, Scott. Hello, everyone. Thanks for joining us today. These are very important times for our company as we continue to navigate our enterprise transformation amidst the macro-environmental headwinds impacting consumers around the globe and pivot our business accordingly. Our third quarter performance was mixed with notable progress on strategic initiatives overshadowed by escalating pressures in key markets of our Nu Skin core business, particularly evident during the last half of this past quarter. This led to sales below our expectation and non-GAAP earnings per share to the low end of our guide.

In the third quarter, our revenue was $499 million with Q3 non-GAAP earnings per share of $0.56 when excluding a strategic inventory write-down. The primary factor leading to our underperformance was Mainland China. We had projected the growth for China in the second half of the year based on improving trends in the first half and even in the early Q3, but a significant slowdown in consumer spending across the broader economy reversed those early trends. In the Americas, prolonged inflation has constrained incomes and led to a more cautious and price-sensitive consumer. However, growth in our regions and other regions partially offset these challenges. Japan, Hong Kong, Taiwan, and Europe all experienced notable gains with the introduction of ageLOC WellSpa iO. We also generated sequential growth in our Southeast Asia Pacific and South Korea segments.