Nu Skin Q2 2026 earnings: Revenue falls 17.1% as non-cash charges drive GAAP loss

Nu Skin Enterprises (NYSE: NUS) reported Q2 2026 revenue of $320.1 million, down 17.1% from $386.1 million, while diluted EPS swung to a loss of $5.14 from earnings of $0.43; adjusted EPS fell to $0.20 from $0.43. Revenue declined across every major market and both reportable businesses, while non-cash impairment and tax charges drove a $249.8 million GAAP net loss.

Core earnings data

Foreign exchange reduced quarterly revenue by approximately $4.0 million, or 1.0 percentage point. On a constant-currency basis, revenue declined 16.1%, indicating that currency movements accounted for only a limited portion of the contraction.

Profitability also weakened before the exceptional charges. Adjusted operating income declined 36.5%, and adjusted operating margin narrowed by 190 basis points as gross margin decreased and selling and administrative costs consumed a larger share of revenue.

Selling expenses decreased to $107.9 million from $128.2 million, but rose to 33.7% of revenue from 33.2%. General and administrative expenses similarly fell in dollars to $90.8 million from $106.7 million but increased to 28.4% of revenue from 27.6%, showing that costs did not decline as quickly as sales.

Business and segment performance

Nu Skin segment revenue declined 15.5% to $271.2 million, while Rhyz revenue fell 25.0% to $48.9 million. Every major Nu Skin market contracted, with South Korea posting the largest reported decline and Hong Kong/Taiwan the smallest.

Currency had materially different effects by market. It reduced Japan’s reported performance relative to its 5.5% constant-currency decline, but supported reported results in Mainland China, where the constant-currency decline was 18.7% compared with a reported 13.7% decrease.

The contraction in Nu Skin revenue occurred alongside declines across its customer and sales network. Mainland China was an exception at the sales-leader level, increasing 2% even as its customer count fell 11%.

Americas customers decreased 24%, the steepest decline among the listed markets, while South Korea customers fell 19%. These trends leave the company with fewer customers and active sales participants supporting future revenue.

Profitability and balance sheet

Nu Skin’s consolidated gross margin decreased to 68.2%, although the core Nu Skin business’s gross margin edged up to 77.7% from 77.5%. The combination of the lower consolidated gross margin and higher selling and G&A expense ratios explains the decline in adjusted operating margin from 8.0% to 6.1%.

At June 30, 2026, cash and cash equivalents were $189.6 million, down from $238.6 million at the end of 2025. Inventory increased approximately 7.2% to $191.5 million, and accounts receivable rose approximately 23.7% to $48.9 million. Total debt, including the current portion, declined to $213.7 million from $224.2 million.

Goodwill fell to $4.8 million from $83.6 million, reflecting the balance-sheet effect of the quarter’s impairment. Stockholders’ equity declined to $542.7 million from $805.2 million at year-end. Nu Skin paid $2.9 million in dividends during the quarter, made no stock repurchases, and had $137.3 million remaining under its authorization.

Non-cash charges turned adjusted profitability into a large GAAP loss

The main distinction in the quarter was between positive adjusted earnings and the substantial GAAP loss. Nu Skin recorded a $78.9 million impairment charge, producing a GAAP operating loss of $59.3 million versus adjusted operating income of $19.6 million.

The company also recognized a $186.6 million income tax provision despite reporting a $63.2 million pretax loss. Its reconciliation identified a $167.5 million valuation allowance on deferred tax assets as the principal non-cash tax adjustment. As a result, the GAAP effective tax rate was negative 295.4%, compared with an adjusted rate of 36.6%.

Excluding the specified impairment and tax effects, adjusted pretax income was $15.7 million and adjusted net income was $10.0 million. Adjusted earnings remained positive, but adjusted EPS still declined by more than half as lower revenue and operating margin weighed on the underlying business.

Earnings guidance

Nu Skin updated its full-year outlook based on first-half performance and expectations for the rest of 2026. The guidance continues to anticipate year-over-year revenue contraction in both the third quarter and the full year; the release did not provide the previous annual ranges needed to quantify the direction of the update.

The company expects approximately $5 million of cash-based transition costs in the third quarter. Those costs account for most of the difference between the Q3 GAAP and adjusted EPS ranges.

Management perspective

CEO Ryan Napierski said Nu Skin is continuing the rollout of its Prysm iO wellness platform and preparing for a formal launch in India. Management is incorporating lessons from those initiatives while realigning organizational resources in support of its longer-term strategy.

Interim CFO Chelsea Lantz attributed the adjusted result to the company’s focus on profitability and disciplined execution. However, the updated outlook shows that management expects revenue pressure to continue through the remainder of 2026.

Recent insider transactions

The supplied Yahoo Finance summary reports 1,335,424 shares acquired across 19 insider transactions and 17,082 shares sold across three transactions during the past six months. Because recent acquisitions included director stock awards, the reported net acquisition figure should not be treated as equivalent to open-market buying.

The three reported sales were relatively limited in size and do not, by themselves, establish the insiders’ reasons for selling.

Share counts are approximate calculations based on the reported transaction prices and values.

Risks investors need to watch

• Continued erosion in the customer and sales network: Customers, paid affiliates and sales leaders all declined. Further contraction could make it harder to stabilize Nu Skin revenue.
• Broad-based geographic and segment weakness: Every major market reported lower revenue, and Rhyz declined faster than the core Nu Skin business. The lack of a growing segment reduces the company’s ability to offset weakness elsewhere.
• Margin and transition-cost pressure: Adjusted operating margin fell as expenses declined more slowly than revenue. Approximately $5 million of expected Q3 transition costs may add near-term pressure.
• Inventory risk: Inventory increased from year-end even as quarterly and first-half revenue declined. The company identifies inaccurate demand forecasting and potential inventory write-offs as operating risks.
• Execution of new initiatives: Prysm iO and the planned India launch are central to management’s strategy, but their contribution depends on sustained interest from customers and the sales force, as well as successful product and regulatory execution.

Summary

Nu Skin’s Q2 2026 results combined a broad 17.1% revenue decline with weaker underlying profitability and large non-cash charges that drove a $249.8 million GAAP net loss. Adjusted earnings remained positive, but the falling customer base, contraction across all major markets and lower adjusted operating margin show that the core business remains under pressure. The main points to monitor are whether Prysm iO and India can improve demand, whether cost realignment stabilizes margins, and whether Nu Skin can deliver within guidance while controlling inventory and transition costs.