NUS Stock Forecast & Price Target

Nu Skin Enterprises Inc. has experienced a notable year-over-year increase in its core direct selling business, reaching 40.2%, driven by changes in its compensation plan aimed at fostering customer growth and affiliate acquisition. The company is committed to improving operational efficiency through an extended restructuring program and a targeted SKU rationalization initiative, which is set to reduce inventory by approximately 20% by the end of 2024, with the goal of enhancing gross margins. Additionally, despite projected sales declines, management has ensured a sequential improvement in key performance indicators, including significant customer growth in Mainland China and the Americas, indicating potential for recovery and future growth.

Nu Skin Enterprises Inc. is facing significant challenges, as it has lowered its 2Q24 estimated operating profit by 37% year-over-year, reflecting a broader trend of declining sales, particularly with constant currency sales down double-digits in four out of seven regions. The expected decline in 3Q24 operating profit has deepened further, with estimates now reflecting a 46% year-over-year decrease, alongside a downward revision of sales forecasts from -8.8% to -12.3% year-over-year. Despite maintaining its 2024 guidance, the company's rising general and administrative expense ratio, coupled with continuous sales declines across all segments, raises concerns about its profitability and operational efficiency moving forward.