Nu Skin (NUS) Q3 2026 Earnings Call: Prysm Momentum and Full-Year Guidance

Key Takeaways

• Nu Skin (NYSE: NUS) reported Q3 2026 revenue of $311 million and adjusted EPS of $0.10, both within management’s guidance ranges. Reported EPS was negative $0.02.
• Adjusted operating margin declined to 3.7% from 5.9% a year earlier. Gross margin fell to 65.0%, mainly due to the revenue mix between the core Nu Skin and Rhyz businesses.
• The Rhyz manufacturing platform delivered strong year-over-year revenue growth, while the core business continued to face pressure in customer and sales metrics.
• Approximately 41,000 Prysm iO devices had been placed globally by quarter-end, generating 4.5 million scans. Following the Prysm app 2.0 update, scan-to-purchase conversion more than doubled to 10%.
• Nu Skin expects Q4 revenue of $310 million to $340 million and adjusted EPS of $0.11 to $0.21. Full-year revenue guidance is $1.26 billion to $1.29 billion, with adjusted EPS of $0.55 to $0.65.
• Management’s priorities remain advancing its anti-aging platform, strengthening sales-force capabilities, preparing for India’s formal launch in the first half of 2027, and improving efficiency through an East-West operating model.

Core Financial Data

Business and Operating Performance

Prysm iO remained central to Nu Skin’s personalized wellness strategy. The platform connects nutritional health scans, AI-supported product recommendations and recurring product use. Management said the app 2.0 update, introduced in late August, improved customer engagement and more than doubled scan-to-purchase conversion to 10%.

LifePak, the company’s flagship nutritional supplement, recorded nearly 3% year-over-year sales growth for the year to date. Management cited this as evidence of engagement with its wellness platform despite pressure on broader revenue.

The Rhyz manufacturing platform posted strong year-over-year revenue growth during the quarter. However, the core Nu Skin business continued to experience pressure across overall customer and sales-force metrics.

Nu Skin is adjusting sales-force incentives and expanding leadership development. Management said its approach is shifting away from short-term promotions toward compensation, milestone incentives and training designed to improve customer and affiliate acquisition. Training is increasingly focused on social media, attributed links and direct digital transactions.

The company continues to prepare for India’s formal launch in the first half of 2027. Management said it is refining operational, product and commercial plans following the pre-marketing period, with an emphasis on building a scalable market foundation.

Nu Skin is also implementing an East-West operating structure. The company expects closer alignment between manufacturing and end markets—using the U.S. for western markets and China for eastern markets—to support gross margin, speed to market and fixed-cost optimization over time.

Management Guidance

Management anticipates sequential revenue growth in Q4, supported by efforts to increase customer and affiliate engagement during the holiday season. The company expects approximately $5 million of remaining cash-based organizational transition costs in Q4; these costs are excluded from adjusted earnings guidance.

Risks and Focus Areas

• Core business revenue, customer and sales-force metrics remain under pressure.
• Profitability is affected by the revenue mix between the higher-margin core Nu Skin business and Rhyz.
• Foreign exchange reduced Q3 revenue by $3.9 million and is expected to remain a roughly 1% headwind for the full year.
• Management cited inflation as a factor affecting customer budgets and product choices.
• The benefits of the East-West structure, manufacturing realignment and sales-force development depend on continued execution and are expected to emerge over time.
• Prysm app 2.0 remains at an early stage, and management did not provide a specific medium-term conversion target.

Analyst Q&A Highlights

Management said sustainable sales-channel improvement is more likely to come from compensation-plan changes, aligned milestone incentives and capability development than from short-term promotions. Nu Skin is tailoring incentives to balance customer acquisition and team building while preparing its 2027 incentive roadmap.

On Prysm, management noted that the 10% conversion rate aggregates different types of scans, including repeat scans by existing subscribers. The device is intended to support both customer acquisition and retention. Management believes conversion can rise further as the AI system improves its understanding of customer needs and provides tiered product recommendations based on nutritional priorities and budgets, but it did not set a numerical target.

Full Earnings Call Transcript

Complete Earnings Call Transcript

Management Remarks

Operator

[Operator Instructions] Please be advised that today's conference is being recorded. I would now like to hand the conference over to your first speaker today, VP of Investor Relations, B.G. Hunt. Please go ahead.

B.G. Hunt

Thanks, Janelle, and good afternoon, everyone. I'm joined by Ryan Napierski, President and CEO, and by our interim CFO, Chelsea Lantz.

Today we'll be sharing Nu Skin's Q3 2026 results and providing guidance for the remainder of the year. Before I turn the time over to Ryan, let me point out that on today's call, comments will be made that include forward-looking statements. These statements involve important risks and uncertainties, and actual results may differ materially from those discussed or anticipated. Please refer to today's earnings release and our SEC filing for 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, ir.nuskin.com, for any required reconciliation of these non-GAAP numbers. And with that, I'd like to now turn the call over to Ryan.

Ryan Napierski

Thanks, B.G. Good afternoon, everyone, and thanks for joining for our third quarter call. We delivered revenue of $311 million and adjusted EPS of $0.10, both within our guidance range. Our Rhyz manufacturing platform had an exceptional quarter, posting strong year-over-year revenue growth. While our results reflect ongoing pressures in the core business, we remain focused on our strategic priorities that we've outlined over the last year. Our Chief Operating Officer, Chayce Clark, has been leading the team to simplify, focus, and execute upon each of them. These priorities are: #1, advancing our integrated anti-aging platform; #2, strengthening our channel through improved sales force activation and development; #3, preparing for our formal launch of India early next year; and #4, improving our operating model to support greater profitability over time. Let me briefly update you on each of these priorities. So first, we continue to make progress in advancing our integrated anti-aging platform with Prysm iO playing an increasingly important role in our approach to personalized wellness.

Prysm is designed to help consumers better understand their nutritional health status and engage more consistently with our wellness product solutions, creating a differentiated experience that connects technology, products, and ongoing customer relationships. Since launching Prysm through the end of Q3, we've now placed approximately 41,000 devices globally and completed 4.5 million scans. During the quarter, we rolled out version 2.0 of the app, which delivers a meaningfully improved user experience powered by our new intelligent AI integration. Since the app update, we've more than doubled our scan-to-purchase conversion rate to 10%, which tells us that consumers are taking action when we get them more engaged with the platform. We also see this in demand for LifePak, our flagship nutritional supplement, as sales grew nearly 3% year-over-year year-to-date, a meaningful proof point given the broader revenue environment. We remain encouraged by the potential of this intelligent wellness platform to deepen customer engagement, support recurring product consumption, and provide our sales leaders with meaningful differentiation in the marketplace.

In September, we hosted our global Nu Skin Live convention in Yokohama, Japan with approximately 12,000 sales leaders from around the world. We previewed upcoming innovations in our anti-aging portfolio with a particular focus on women's health, which will begin rolling out mid-2027. We will share a future product pipeline with you as we move into next year. Second, we continue to invest in the capabilities necessary to strengthen our talented and committed global sales channel. We recognize that innovative products alone are not enough to drive sustainable growth. Equally important is our ability to empower our dedicated brand affiliates and sales leaders to effectively introduce our products, engage with our customers, and build successful businesses. Over the past several years, we've focused on improving the simplicity, accessibility, and effectiveness of our sales compensation incentive system.

We have also begun expanding our investments into leadership learning and development by providing unique opportunities for leaders to acquire and strengthen critical success capabilities in selling products, acquiring customers and brand affiliates, building sales teams, and leading large organizations. At Live, we held a dedicated live leadership training session with industry-renowned trainer Eric Worre and our Team Elite top sales leaders. We've also just wrapped up a two-day leadership management event, our Management Mastermind event earlier this week with nearly 2,000 of our most engaged sales leaders from around the globe. These investments are designed to further empower our talented sales leaders and strengthen their development of the next generation of leadership for Nu Skin. Although our overall customer and sales metrics remain under pressure, we believe these new investments are important to rebuilding engagement and productivity, which is the foundation for more sustainable performance in our channel into the future. Third, we continue to prepare for our anticipated formal launch of India during the first half of 2027. India represents an attractive long-term market opportunity supported by its large consumer population, growing interest in health and wellness, and an expanding entrepreneurial economy.

We've acquired many learning streams during our pre-marketing period and our teams are focused now on refining operational product and commercial preparations necessary to support a successful and scalable full market launch. We are approaching this opportunity with a long-term perspective as we focus on building the right foundation for sustainable growth. And finally, we remain focused on improving efficiency and profitability of our global business. As we continue to align our operations with current market conditions, we are evaluating opportunities to simplify our organization, improve productivity, and better leverage our global capabilities. Chayce is also leading an effort across the company to realign the organization around our East-West structure, which will enable the company to meet the unique needs of our business across these two hemispheres. Each region is now focused on building and executing successful go-to-market plans, including incentive roadmaps, product introductions, and promotions, in order to improve customer and affiliate acquisition and retention. We believe that aligning our organization around this East-West structure will also result in greater efficiencies and cost performance as we leverage our manufacturing hubs in both the U.S. for our western market needs and China to better serve our eastern markets.

Moving manufacturing closer to the customer is expected to improve gross margin, speed to market, and fixed cost optimization over time. While there is more work ahead, we believe disciplined execution against these priorities will help the company improve efficiencies and profitability as our business performance strengthens. Looking ahead to the fourth quarter, our focus remains on driving customer and affiliate engagement through the holiday seasons as we anticipate sequential revenue growth. As we prepare for 2027, we remain committed to the strategic priorities we've outlined throughout the year: again, advancing our anti-aging platform, strengthening our sales channel, preparing for India's formal launch, and improving our operating efficiency. We believe these initiatives position Nu Skin for improved performance and sustainable growth long-term. So with that, I'll turn the time over to Chelsea to review our financials.

Chelsea Lantz

Thanks, Ryan. Good afternoon, everyone. Today I'll review our third quarter results and discuss our outlook for the remainder of the year. Third quarter revenue was $311 million within the guidance range, including an approximate 1.1% or $3.9 million foreign currency headwind. Reported earnings per share were negative $0.02 or a positive $0.10, excluding organizational transition costs related to the implementation of our ERP, East-West operating model, and certain other charges. Adjusted earnings per share were in line with our guidance range. Gross margin for the quarter was 65% compared to 70.5% in the prior year, primarily reflecting the revenue mix between our Nu Skin core and Rhyz businesses. Within the core Nu Skin business, gross margin was 76.6% compared to 77.7% in the prior year. We remain committed to our gross margin improvement initiatives through pricing discipline, product mix optimization, and operational efficiencies within the core business.

Selling expense as a percentage of revenue was 33.2% compared to 35.8% in the prior year. Within the core Nu Skin business, selling expense was 40.9% compared to 41.7% in the prior year. We continue to target core selling expense around 40%. General and administrative expenses declined by $10.9 million year-over-year to 30.2% of revenue compared to 28.8% in the prior year. As we continue to right-size our fixed cost base to current operations while preserving investment in key strategic priorities. Adjusted operating margin for the quarter was 3.7% compared to 5.9% in the prior year. We continue to make progress on the implementation of the East-West operating model announced last quarter to better align our resources with the needs of our markets. We currently anticipate approximately $5 million in remaining cash-based organizational transition costs in the fourth quarter, which have been excluded from our adjusted earnings guidance.

On the balance sheet, we ended the quarter with $164.9 million of cash and cash equivalents and reduced our total debt to $203.7 million. We remain focused on disciplined capital allocation and returned $2.9 million to shareholders through dividends during the quarter. We did not repurchase shares, leaving $137.3 million remaining under our current authorization. Turning to our outlook for the fourth quarter and full year. For the fourth quarter, we expect revenue in the range of $310 million to $340 million, including an anticipated foreign currency tailwind of approximately 1%. We expect reported earnings per share in the range of $0.05 to $0.15 or adjusted earnings per share of $0.11 to $0.21. For the full year, we now expect revenue of $1.26 billion to $1.29 billion, including an anticipated foreign currency headwind of approximately 1%.

We expect annual reported earnings per share of negative $5.08 to negative $4.98, reflecting the impact of the second quarter goodwill impairment and deferred tax valuation allowance, which did not affect our cash position or ability to execute on our strategic plan. On an adjusted basis, we expect annual earnings per share of $0.55 to $0.65, excluding these non-cash items, certain other year-to-date charges, and anticipated fourth quarter organizational transition costs. After these adjustments, our guidance reflects an effective tax rate for the year of approximately 39%. As discussed today, we are taking deliberate steps to strengthen the business from optimizing our cost structure to evolving our operating model. Our focus remains on disciplined execution and improving profitability, and we're confident these actions will position us for sustainable growth in the periods ahead. With that, operator, we'll now open the line for questions.

Operator

[Operator Instructions]

Our first question comes from the line of Dave Storms with StoneGate.

Question-and-Answer Session

David Storms

I know you guys are busy between India and Prysm, so I'll try to be brief here. Just a couple. Ryan, when you were talking about strengthening the sales channel and obviously trying to grow the customer base, I recognize that sometimes the customer base can follow the leaders, leaders can follow the customers, a bit of a push and pull there. Are there any incentives to highlight here that might bring that back beyond what you talked about with all the leadership initiatives that you have?

Ryan Napierski

Yes, so a lot of the leadership initiatives, Dave, that we are focused on are really around how do we enhance the customer acquisition and brand affiliate acquisition, and that really is the focus for us. As we have learned over the course of the last few years, incentives and short-term promotions are not as helpful at building channel momentum as more of a sustained programmatic approach. So when I mention kind of the three levers, you have the compensation system itself, the incentive roadmap that layers on top of that, that kind of recognizes and rewards key development. Those have kind of been our two levers that we've been really working to ensure that they're right for the market. So some compensation plan enhancements have been rolling around the world over the course of this past year to right-size the incentives for customer acquisition versus team building, for instance. And then we've been working, especially in the second half, to realign our incentive roadmap, again, these key milestone areas, to ensure that those are fully aligned for the 2027 year. This third piece though that we're talking about really is this learning and development platform that we're talking about for our leadership.

And it really is focusing on core skills and capabilities that are needed in the market, and a lot of that is related to just the changes in the marketplace over the course of the last 5 to 10 years. Today, the way that our affiliates build the business in terms of sharing products on social media, posting, sharing, commenting, DMing, that's a very different set of skills and capabilities than the way they used to do the job, what we used to call them distributors, where they would buy products wholesale and sell those. So the vast majority of our customers today transact on our platform directly through links, attributed links through social media, etc. And so we've realized that these skills, these capabilities, and the shift—and it's very different by market, different markets at different stages—but that's really where we need to focus: less on the short term, more on the systemic and sustainable skills and capabilities.

Chelsea Lantz

I would just add, and I said in my prepared remarks, but as we look at these changes and balancing our approach from a strategic standpoint, we do feel like 40% is the right level from a cost perspective. So that's how we're modeling it in our models for the core business.

David Storms

Understood. That's great. I appreciate that. And then just did want to maybe get a temperature check on Prysm. I know we've talked in the past about—I appreciate the new commentary around 10% scan-to-purchase conversion rate. Add in, you know, version 2.0 app, it sounds like there's a lot of tailwinds there. I think honing in on the conversion rate, how should we think about the success? I mean, is 10% just getting started, or what you would expect to see in the medium term? Just any thoughts there.

Ryan Napierski

Yes, no, I mean it's pretty interesting. So as I mentioned, if we just kind of do the simple math—and you'll have to do it for me here—4.5 million scans over 41,000 units. We're talking about many scans per unit that we are seeing. Some of that is self-scanning, others guest scanning, so we kind of are tracking all of this data differently. The 10% really is kind of an aggregation of that process. And so I think there's a lot of room for improved conversion when you think of the total scans.

But this device is unique because it plays a role for both acquiring new customers as well as retaining customers on the device. So, for example, I scan myself twice a week. I'm already on a subscription, right? And so obviously my conversion with each of my scans and such, that's not driving that 10% rate. I really do believe, and we're still in the early stage of this, what we have learned with the 2.0 and this new intelligent AI, the increased interactivity between the app and the customer with respect to their personalized product recommendation and the insights they gather through that AI algorithmic approach is really creating a greater engagement level. We are happy to see—we're very early, I think 2.0 rolled out the latter part of August, last week of August, so we're really talking about kind of a doubling within a month's time. And I think there's room upwards. I don't know that I could give you an exact number, but we certainly haven't hit the top there. I would hope to see that that can increase significantly from there, the smarter that intelligence gets in understanding that customer's needs and kind of helping them navigate which product solution set—kind of we do a good, better, best recommendation—which set is going to best meet their needs. And those needs also, by the way, include their pocketbook.

Obviously, inflation is heavy right now. Our app does look in kind of a good, better, best scenario to say where is the essential nutrition that you need versus kind of a more extensive and then optimal level. So we do try to give consumer choices to play into that.

David Storms

That's great, [ Carl ]. I really appreciate that. That's all I have. I appreciate the time, and good luck in the next quarter.

B.G. Hunt

All right, thanks, Dave.

Operator

I'm showing no further questions at this time. I would now like to turn the conference back to President and CEO Ryan Napierski for closing remarks.

Ryan Napierski

Well, truly, you know, we're in the day-to-day here at Nu Skin working with our sales leaders around the world, our teams in nearly 50 markets around the world. And it's always interesting to me when we get to go interact with this team and our teams and to see the dedication of our employees around the world, the dedication of our sales leaders to the mission of this company to be a global force for good by empowering people to look, feel, and live better. And they feel this truly to their bones, and it's just very inspiring to me. Our mission is absolutely needed in the world today. We're absolutely committed to delivering it, to leveraging technology to do it better through our sales force, who is ultimately the key to our success. And so with that, we'll plan to keep you updated quarter to quarter as our journey continues.

And we thank you for your support and your ongoing interest as we move forward. Thank you, everybody.

Operator

Thank you for your participation in today's conference. This does conclude the program. You may now disconnect.

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