NuSkin boosts profits but sales results are mixed

Premium skin care specialist NuSkin has posted higher than expected profits on a weak dollar, despite the fact that certain key Asian markets saw sales slumps.

Net profit rose for the second quarter by 49 per cent to $20.6m, up from $13.8m in the corresponding quarter for last year.

The company, which is registered in the US but does most of its business in the Asian markets, said that its bottom line benefited from the weakness of the dollar against all global currencies, but especially those in its key Asian markets.

Weak dollar drives results

Indeed, NuSkin said that approximately half of the increase in profits was attributable to the weakness of the dollar.

However, the rise in profits was not met by the rise in revenues, which were up 12 per cent to $321.7m, reflecting particularly strong growth of 88 percent in Latin America and 61 percent in Europe, albeit from smaller foundations.

Amongst the company’s key Asian markets of South Korea and Japan, figures were far from satisfactory, with sales in the Japanese market falling by 13 percent.

Building on China

Meanwhile, sales in China and Taiwan rose by 7 percent, a figure that is expected to grow further this year, following the opening of 30 direct selling businesses in the Beijing and Shanghai metropolitan regions.

"We are not inclined to make excuses for poor performance," said chief executive Truman Hunt during a conference call concerning the results.

Hunt suggested that the weakness of the Japanese sales was likely to continue to the end of the year, as the latest financial information reveals that the Japanese economy is continuing to slow.

Japanese consumer spend down

Economic growth rates in the country are currently hovering at 1.5 percent, a rate that is causing some consumers to stay away from the shops.

Although the company’s performance was above the expectations of financial experts, the financial market reacted with concern to the falling sales in key Asian markets, causing shares on the NYSE to slide by just over a dollar on the close of business 31 July to $16.15.

NuSkin says it will continue to target the Asian market, and recently backed this up with the launch of an extended brand portfolio that also incorporates the forging of a global brand identity and a new corporate identity.