Here's How Nu Skin (NUS) Is Placed Ahead Of Q4 Earnings

Nu Skin Enterprises, Inc. (NYSE:NUS) is slated to report fourth-quarter 2019 results on Feb 12, after market close. This cosmetic, personal care and wellness products provider has trailing four-quarter positive earnings surprise of 3.6%, on average. In the last reported quarter, the company delivered a positive earnings surprise of 4%.

The Zacks Consensus Estimate for fourth-quarter earnings has been steady at 72 cents in the past seven days. This suggests a decline of 31.4% from the year-ago quarter’s reported figure. Further, the consensus mark for revenues is at $583.3 million that indicates a decline of 14.6% from the year-ago quarter’s tally.

Key Factors to Note

Nu Skin has been witnessing tough regulatory environment in Mainland China for a while, primarily due to restriction imposed by the government on meetings. The recently completed 100-day government campaign in the region to inspect offerings of nutrition and direct sales led to limited sales meetings, media scrutiny and unfavorable consumer sentiments. The consensus mark for revenues in Mainland China is pegged at $166 million, which indicates a decline of 23.5% from $217 million reported in the year-ago quarter.

Also, foreign currency headwinds are likely to have made an impact on in Nu Skins’ fourth-quarter performance. During the last earnings call, management projected currency headwinds of nearly 2% to impact fourth-quarter sales. For the fourth quarter, the company anticipated revenues in the range of $570-$590 million. Earnings are expected between 68 cents and 75 cents per share, including costs related to the LIVE event hosted in October 2019. In the year-ago quarter, the company delivered adjusted earnings of $1.05 per share.

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

Nevertheless, the company is undertaking several initiatives to accelerate growth in Mainland China. The company had planned of launching an improved version of Galvanic Spa along with the new age Nutrial hair and scalp treatment system in the quarter under review. Also, management is committed toward boosting customer strength by developing platforms for effective engagement and empowering programs. Recently, the company rolled out a new customer referral program in Mainland China, which is gaining pace.

Additionally, Nu Skin is on track with product development strategies and customer retention programs across all key market locations. The company is striving to expand its sales compensation program — Velocity.

What the Zacks Model Unveils

Our proven model does not conclusively predict an earnings beat for Nu Skin this season/time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. But that’s not the case here. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Nu Skin carries a Zacks Rank #3 but an Earnings ESP of -0.69%.

Stocks With Favorable Combinations

Here are some companies you may want to consider, as our model shows that these have the right combination of elements to post an earnings beat:

Monster Beverage Corporation (NASDAQ:MNST) currently has an Earnings ESP of +3.38% and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.

The Kraft Heinz Company (NASDAQ:KHC) currently has an Earnings ESP of +1.33% and a Zacks Rank #3.

The J. M. Smucker Company (NYSE:SJM) presently has an Earnings ESP of +0.39% and a Zacks Rank #3.

More Stock News: This Is Bigger than the iPhone!

It could become the mother of all technological revolutions. Apple (NASDAQ:AAPL) sold a mere 1 billion iPhones in 10 years but a new breakthrough is expected to generate more than 27 billion devices in just 3 years, creating a $1.7 trillion market.

Zacks has just released a Special Report that spotlights this fast-emerging phenomenon and 6 tickers for taking advantage of it. If you don't buy now, you may kick yourself in 2020.

Click here for the 6 trades >>