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Will Product Launches Aid Nu Skin (NUS) in Q3 Earnings?

Nu Skin Enterprises, Inc NUS is slated to report third-quarter 2017 results on Nov 1, after the closing bell.

The company is expected to gain from ongoing innovation and sales-enhancing initiatives. However, lower revenues from Mainland China and negative currency fluctuations are expected to hurt Nu Skin’s performance.

Notably, the company’s earnings have outpaced the Zacks Consensus Estimates in three out of the trailing four quarters, with an average positive earnings surprise of 10.8%. We note that this has helped Skin to outperform the industry in the past year. Its shares have returned 2.3% as against the industry’s decline of 7.8%.

So let’s look at how things are shaping up prior to the upcoming third-quarter results.

What to Expect?

The Zacks Consensus Estimate of earnings for the third quarter is pegged at 76 cents, which reflects a year-over-year decline of approximately 29.1%. Further, the consensus mark has declined by a penny over the past 30 days.

Moreover, analysts polled by Zacks expect revenues of $564.3 million for the quarter under review, representing a 6.6% drop from the year-ago period. Expected revenues are, however, higher than management’s projected range of $559-$563 million for the said period.

Nu Skin Enterprises, Inc. Price, Consensus and EPS Surprise

Factors at Play 

From a regional perspective, we note that the performance of the EMEA region has been positively impacting the company’s sales. The consensus estimate of revenues for the third quarter is expected to rise for the EMEA region to reach $39.1 million approximately, depicting growth of 6%.

Consensus estimate of revenues from the South Asia/Pacific region is also expected to grow 8.7% from the prior year, to reach $77 million. However, dismal performance in Mainland China is expected to continue in the third quarter as well. The Zacks Consensus Estimate for revenues from this region is expected at $168 million, depicting a 22.4% decline from the prior year. Revenues are also expected to be negatively impacted by currency fluctuations.

Nevertheless, the beauty segment has been benefitting from increased consumer confidence and spending. In order to gain from these trends, Nu Skin remains committed toward innovation and product launches to suit consumer needs and thereby expand market share. The company also expects its top line to gain from product launches, lined up for the second half of 2017 as well as 2018.

Earlier this month, the company’s focus on these endeavors led management to raise the lower end of its earnings view for the third quarter.Nu Skin now expects earnings in the range of 74-76 cents per share, compared with the previously anticipated range of 71-76 cents.

What Does the Zacks Model Unveil?

Our proven model shows that Nu Skin is likely to beat earnings estimates this quarter. A stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. You may uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Nu Skin has an Earnings ESP of +0.44% and carries a Zacks Rank #3, which makes us reasonably confident of an earnings beat.

Stocks With Favorable Combinations

Here are some companies which, according to our model, have the right combination of elements to deliver earnings beat.

B&G Foods Inc BGS has an Earnings ESP of +2.08% and carries a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.

United Natural Foods, Inc UNFI has an Earnings ESP of +6.33% and holds a Zacks Rank #2.

McCormick & Company, Incorporated MKC has an Earnings ESP of +0.49% and holds a Zacks Rank #2.

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Nu Skin Enterprises, Inc. (NUS): Free Stock Analysis Report
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McCormick & Company, Incorporated (MKC): Free Stock Analysis Report
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