Nu Skin expands China footprint, but revenue outlook disappoints

By Simon Pitman

- Last updated on GMT

Nu Skin expands China footprint, but revenue outlook disappoints

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International skin care player Nu Skin announced 2015 revenue forecasts below market expectations during its annual investor conference, but the company is continuing to expand in China.

The company said that it expects revenues to grow by between 4 and 6% to $2.50 to $2.56bn, reflecting a predicted 6% negative impact from foreign currencies during the course of the 2015 financial year.

Since the beginning of 2014 the company has also been struggling against regulatory issues in its biggest market, China, where authorities suspended sales back in February as they investigated the company’s direct selling practices.

Rebuilding the Nu Skin business in China

However, the company believes that, after working hard with the regulatory authorities in China, it has now come full circle and is well on course to rebuilding its business in the country.

Adding to this, president and CEO Truman Hunt announced during the conference that it has received official approval to commence direct selling activities in five new districts in Shanghai and in two new cities in Jiangsu Province.

The company stated that the licensing process had included a review of it operation and that the new approval further expands its footprint in this vital market to future growth.

Strong future product roll out

Nu Skin is also hoping that a strong innovation-based product roll out during the course of the coming year should help to further boost its bottom line.

"We have several exciting product and business initiatives that we believe will help generate growth in our business globally,”​ said Hunt.

“In 2015, we plan to introduce what we consider to be the most ground-breaking anti-aging products in our corporate history. These new anti-aging innovations will bring technology-based customization to our skin care portfolio, as well as advanced nutritional support for the body."

Nu Skin emerges from a tough year

Nu Skin’s third and most recent quarter, which was revealed last month, showed revenues taking a big fall as the company continued to suffer from a crackdown on its practices in China earlier in the year, and problems in other regions also came to the surface.

The company said that revenues for the quarter fell by 30% compared to the prior year, to $638.8m, as sales also fell in the Southeast Asia and EMEA regions.

Drilling down on a regional basis, the results showed that revenues fell by 50% in Greater China, to $226.7m, although it was underlined that approximately $150m of revenue was generated by a limited time promotion on the ageLOC TR90 line in the corresponding period last year.

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