The Utah Investor

Nu Skin Enterprises, Inc. is a Provo-based company that sells beauty and wellness products, including skincare devices and products, supplements, and more. One thing that sets Nu Skin apart from other beauty companies is their distribution network. They use what they refer to in their 10-K as "direct selling" or "network marketing", but what is colloquially known as multi-level marketing. They have an independent sales force, referred to as "Brand Affiliates", that use word of mouth and personal selling and receive a commission from the company on their sales. Another interesting thing about Nu Skin is their geographical diversification. In 2025, they derived just 22% of their core business revenue from the Americas. The overwhelming majority of their revenue comes from Asia, diversified between Mainland China, Hong Kong/Taiwan, Japan, South Korea, etc. Nu SKin is an expensive, higher-end brand. For example, one of their best-selling products on their Amazon store is a $25, 4 oz toothpaste. High sales numbers and good Amazon reviews tell me that people think the products are worth the high price.

There are a couple of key developments to focus on in the coming months with Nu Skin. They did a pre-launch of Nu Skin India in late 2025, and plan to do the full launch in the second half of 2026. This could be a good sign given the sheer size of the market in India. I will be paying close attention to any information that comes out about this over the next several months. Another recent development is the release of a new device called PrysmiO, which does a 15-second scan of your fingertip to tell you the level of carotenoids in your skin. Carotenoids are antioxidant molecules that protect against the damaging effect of free radicals. Free radicals are particles that are present in your skin and play an important role in your body, but if they exceed a certain level of concentration can cause tissue damage and even cancer. It is important to have enough carotenoids in your skin to offset and protect against free radicals. Carotenoid levels can be improved through diet and lifestyle, as well as avoiding pollutants like smoking and UV rays. A scanner like PrysmiO could help someone check the level of carotenoids in their skin and then make the necessary changes to improve their levels. Nu Skin also sells supplements that improve carotenoid levels, mostly marketed as anti-aging supplements.

Nu Skin's revenue has been on a downward trend over the past 4 years since peaking in 2021. See the chart below of revenue over the past 10 years, with expected revenue for 2026.

In their financial reports, the company attributes this decline largely to macroeconomic weakness, currency depreciation, and trends that have disrupted their distribution strategy such as the "convergence of social commerce, influencer, and affiliate marketing, the growing gig economy and expanding product marketplaces." Nu Skin is doing many things to combat this revenue decline, such as a "digital transformation" that aims to adapt their sales force to capitalize on these trends. In addition, their release of the PrysmiO and the entry into the India market could boost sales. While the revenue trend is concerning, their revenue levels are still relatively high. They generated $1.44 Billion over the past 4 quarters, over 5 times the current market value of the company.

From 2020 to 2024, NUS's operating margin, excluding restructuring expenses, declined from 10%-3%.

This reduction was caused by a decrease in gross margin, from 75% to 69%, as well as the fact that general and administrative expenses did not go down as much as revenue, making them increase from 25% to 28% of revenue. The company rolled out restructuring plans in 2022 and 2023, which continued through the first quarter of 2025. This restructuring seemed to have paid off, as they were able to increase their operating margin to 6%, excluding restructuring and impairment expenses, for 2025. However, in Q1 2026, the margin returned to around 3%. Whether this is indicative of a trend reversal or just a blip in the upward trend remains to be seen. In each of the past 6 years, revenue has been down in Q1 vs the previous Q4, so it could be reflective of seasonality. Getting Q2 information will give us a better idea.

See the below trailing-twelve-month valuation ratios as of close on 6/10/26:

On each of the 4 ratios, NUS is well below the TUI median. NUS stock has lost 90% of its value since the beginning of 2021. My best estimate is that this is largely due to the revenue and profitability trend over the same timeframe. Some of the pessimism could also be due to a less-than-optimistic outlook on the consumer economy in the near future, and ongoing concerns about trade barriers. Expensive products like Nu Skin's can be more vulnerable to economic weakness as consumers look for cheaper alternatives. These are all valid concerns. On the other hand, Nu Skin has made a profit in 5 of the last 6 years, with 2024 being the only exception and that was primarily due to restructuring and impairment charges. They also have paid a consistent dividend of $.06 per share per quarter from 2024 through Q2 26, which at the current stock price ($5.43 as of 6/10) comes out to a ~4.4% dividend yield. The balance sheet looks healthy, with good liquidity and solvency ratios, and the company is not in a lot of debt relative to their assets. The restructuring of the company during the past few years helped them adjust their cost structure to fit a lower level of revenue, although they will need to slow or stop the rate of revenue decline in order to maintain profitability. India is a very big market, and if their business model works as well in India as it has in other parts of Asia, this could be a significant source of revenue going forward. I am currently invested in this company with over 5% of my portfolio. I am holding this investment with an eye on the next financial reports as well as any additional information that comes out about the company. Specifically, I will be paying attention to the following things:

Now that the restructuring has been completed, what rate will the operating margin normalize to? To get a better view of this, I will be looking at the next few quarters of income statements and excluding any large, non-recurring items from operating income/loss.
Will the release of PrysmiO and the entry into the India market have a meaningful positive impact on future revenue? I hope to see someo sales of PrysmiO and the India segment in the second half of 2026.

Please don't take this article as investment advice - do your own research before making any investment decisions. Read my notes page for a description of my investment process.