Why Shares of Nu Skin Enterprises, Inc. Dropped

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of Nu Skin Enterprises (NYSE: NUS  ) were cracking up today, falling as much as 13% and finishing down 11% after providing a disappointing outlook in its fourth-quarter report.

So what: The beauty and nutritional-products maker saw shares fall off a cliff in January after the Chinese government's official newspaper accused it of being a pyramid scheme. While Nu Skin has insisted that it's operating within all Chinese laws, it is currently auditing its business in that country to verify compliance, and has taken to steps to keep a lower profile in China by temporarily suspending all business promotional meetings and all applications for new sales representatives. As a result, Nu Skin now expects top-line growth in the current quarter of 20%-24% to $650 million to $670 million, and EPS of $0.90-$0.94. Analysts had expected sales to come in at $732.2 million on 33% growth, and per-share profit of $1.20. 

Now what: The key word in Nu Skin's outlook seems to be "temporary." CFO Ritch Wood explained: "We are early in the process of understanding the impact of recent events in China on our business, so it is difficult to project how reflective anticipated first quarter results will be of results for the remainder of the year. We believe we will be in a better position to provide specific updated annual guidance in conjunction with our first-quarter earnings release." Despite the uncertainty, Nu Skin is still growing strongly. Unless the audit committee finds something particularly egregious, I'd expect shares to bounce back eventually. 

Don't get tripped up
Millions of Americans have waited on the sidelines since the market meltdown in 2008 and 2009, too scared to invest and put their money at further risk. Yet those who've stayed out of the market have missed out on huge gains and put their financial futures in jeopardy. In our brand-new special report, "Your Essential Guide to Start Investing Today," The Motley Fool's personal finance experts show you why investing is so important and what you need to do to get started. Click here to get your copy today -- it's absolutely free.


Read/Post Comments (0) | Recommend This Article (0)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Be the first one to comment on this article.

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 2862457, ~/Articles/ArticleHandler.aspx, 8/28/2015 11:26:57 AM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...

Jeremy Bowman

Fool since 2011. I write about consumer goods, the big picture, and whatever else piques my interest. Follow me on Twitter to see my latest articles, and for commentary on hot topics in retail and the broad market.

Today's Market

updated Moments ago Sponsored by:
DOW 16,621.29 -33.48 -0.20%
S&P 500 1,987.24 -0.42 -0.02%
NASD 4,817.88 5.17 0.11%

Create My Watchlist

Go to My Watchlist

You don't seem to be following any stocks yet!

Better investing starts with a watchlist. Now you can create a personalized watchlist and get immediate access to the personalized information you need to make successful investing decisions.

Data delayed up to 5 minutes

Related Tickers

8/28/2015 11:11 AM
NUS $45.00 Down -0.16 -0.35%
Nu Skin Enterprise… CAPS Rating: **