What happened

Shares of Nu Skin Enterprises (NYSE:NUS) plunged 14.6% on Wednesday after the direct-selling personal care products company announced disappointing preliminary second-quarter 2019 results. 

More specifically, Nu Skin says its second-quarter revenue is now expected to arrive between $622 million and $623 million, translating to earnings per share of $0.82 to $0.84. Analysts, on average, were modeling earnings closer to $0.92 per share on revenue of $665.4 million. 

Stock market numbers on an LED display with red and green arrows indicating direction.


So what

According to Nu Skin CEO Ritch Wood, weakness in Mainland China primarily was to blame following a 100-day campaign by the government "to review and inspect the health products and direct selling industries."

In particular, Wood called out media scrutiny and continued government restrictions on sales meetings -- approvals for which remain limited even now -- for hurting consumer sentiment in the Middle Kingdom.

Now what

As such, Nu Skin also reduced its outlook for 2019 revenue to be in the range of $2.48 billion to $2.52 billion, which should translate to earnings per share of $3.20 to $3.35. By comparison, the company's previous guidance called for revenue of $2.76 billion to $2.81 billion, with earnings per share of $3.80 to $4.05.

For now, investors seeking more color on Nu Skin's performance will need to wait until the company's official second-quarter release in early August. But given this preliminary guidance reduction in the meantime, it's no surprise to see the stock falling hard today.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.