Nu Skin Enterprises, Inc. NUS appears well positioned on the back of focus on innovation and effective product launches. Moreover, the company’s efforts to strengthen sales leaders and expand the customer base have been working well. These were reflected in first-quarter 2021 results, with the top and the bottom line increasing year over year as well as beating the Zacks Consensus Estimate.
Let’s delve deeper.
Product Launches on Track
With the help of advanced technology and well-strategized product programs, Nu Skin tries to capture greater market share and maintain growth momentum. In fact, the company’s long-term strategies stand on three pillars — Products, Programs and Platforms. Notably, management is encouraged about the company’s global introduction of beauty device system — ageLOC Boost (2020). Also, its Nutricentials Bioadaptives product launch is yielding. During the first quarter of 2021, the company generated more than $35 million in sales from ageLOC Boost as well as Nutricentials Bioadaptives launches in a limited number of markets.
Moreover, the company is optimistic about momentum in 2021 driven by impressive product launches later this year. To this end, it will introduce Beauty Focus Collagen+ — a clinically-proven product — to improve skin health and complement other Nu Skin products like LumiSpa beauty system. The company plans to introduce a key Pharmanex innovation — ageLOC Meta — a metabolic health supplement. Apart from this, Nu Skin hopes to start introducing connected devices in the beginning of 2022 and beyond. We note that connected devices will accelerate personalization and enhance customers’ experience. Apart from product launches, Nu Skin’s well-knit product strategies and customer-retention programs have been driving growth in several market locations.
Factors Working in Favor of Nu Skin
Nu Skin sells and distributes products through a network of sales leaders and customers. The company is focused on empowering the same through product launches and engaging technology platforms among other initiatives. Moreover, the company has been conducting a number of promotional seminars online. Additionally, Nu Skin rolled out its Velocity sales compensation plan as well as enJoy rewards program over the past three years. These programs are doing well and driving growth in sales leaders and customers. In the first quarter of 2021, sales leaders were up 22% year over year to 60,619, while Nu Skin’s customer base increased 34% to 1,517,260. The company highlighted that its innovative beauty and wellness product efforts along with strength in its social commerce business model drove the upside.
A shift to work-from-home and at-home trends has led to increased online shopping, which presents a unique opportunity for the company’s business. With these macro trends, Nu Skin is making significant investments in the digital platform to build a socially-enabled business. In this regard, the company is on track to roll out its personal recommendation app, Vera globally. Earlier, Nu Skin had stated that it intends to expand the Vera experience to add a wellness journey that will be connected to other parts of its portfolio by the end of 2021. Also, the rollout of its personal product storefront, My Site bodes well. Further, management is on track to introduce its digital ecosystem, Empower Me, which will offer personalized beauty and wellness solutions via interactive as well as engaging digital experiences.
We note that a number of players in the cosmetic space like The Estee Lauder Companies Inc (NYSE:EL). EL, Coty (NYSE:COTY) Inc. COTY and e.l.f. Beauty (NYSE:ELF), Inc. ELF have been seeing impressive growth trends in their e-commerce business.
Coming back to Nu Skin, we believe that the aforementioned upsides are likely to help the company stay on growth trajectory.
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