DALLAS, TX -- August 11, 2026 -- NU Skin Enterprises Inc. (NYSE: NUS): Stonegate Capital Partners updates their coverage on NU Skin Enterprises Inc. (NYSE: NUS). NUS reported revenue, adj NI, and adj EPS of $320.1M, $10.0M, and $0.20, respectively. This compares to our estimates of $345.2M, $10.3M, and $0.20, respectively. GAAP EPS was $(5.14), primarily reflecting a $78.9M non-cash goodwill impairment, which was largely a GAAP accounting item, and a $167.5M deferred-tax valuation allowance, both excluded from adjusted results. Core Nu Skin gross margin improved 20 bps y/y to 77.7%, while consolidated gross margin declined 60 bps to 68.2% and adjusted operating margin fell 190 bps to 6.1%. Nu Skin and Rhyz revenue declined 15.5% and 25.0% y/y, respectively. Management reduced FY26 revenue guidance to $1.28B-$1.35B from $1.35B $1.50B and adjusted EPS to $0.70-$0.90 from $0.80-$1.20. India also moved to 1H27 from year-end 2026 as NUS refines local sourcing, logistics, technology integration, and the affiliate model. We believe the revised outlook reflects a lower near-term setup, with Prysm iO adoption, sales-force productivity, and cost actions remaining the primary 2027 drivers.
Strategic Initiatives: Prysm iO remains central to NUS’ longer-term growth strategy, although early adoption is refining commercialization. More than 39,000 devices have been placed and 2.5M scans completed, with 50,000 60,000 devices targeted by year-end. We increasingly view Prysm iO as a field productivity initiative rather than a traditional product launch, as sales leaders use the platform as a wellness-consultation tool and learn to sell wellness alongside Nu Skin’s established beauty offering. This creates an opportunity to improve leader productivity, deepen customer engagement, and broaden monetization across the sales network. At its global event in Japan, NUS plans to introduce AI-enabled applications providing personalized assessments, product recommendations, and 90-day wellness plans, which should support conversion and customer lifetime value as leader familiarity improves.
KPIs: Nu Skin ended 2Q with 660,037 customers, 120,291 paid affiliates, and 26,998 sales leaders, down 14%, 8%, and 9% y/y, respectively. Sales-leader trends improved from a 13% y/y decline in 1Q, while the absolute count was essentially unchanged q/q. Mainland China sales leaders increased 2% y/y. Recruiting and leadership development remain below levels management believes are necessary for sustainable growth. NUS is addressing this through Prysm iO training, compensation-framework changes, and a leadership achievement roadmap focused on development, recognition, and incentives.
Balance Sheet and Liquidity: NUS ended 2Q with $189.6M of cash and $213.7M of total debt, generated $10.6M of operating cash flow, and paid $2.9M of dividends. No shares were repurchased, leaving $137.3M under the authorization. Management expects $5M-$10M of cash transition costs through year-end related to its East-West operating model, with greater efficiency benefits expected in 2027.
Guidance: NUS expects 3Q26 revenue of $310M-$340M and adjusted EPS of $0.10-$0.20. FY26 guidance now calls for revenue of $1.28B-$1.35B and adjusted EPS of $0.70-$0.90. Prysm iO adoption, the Japan event, seasonal 4Q promotions, and cost optimization should shape 2H results, with sales-leader activity and customer conversion remaining key indicators to monitor.
Valuation: We use a Price to Adj. EPS comparison when valuing NUS. Currently NUS is trading at a forward Price to Adj. EPS of 4.4x compared to comps at an average of 21.0x. We are using our 2027E Adj. EPS, and an P/E range of 10.0x to 12.0x with a midpoint of 11.0x which moves NUS closer to comp companies. This arrives at a valuation range of $11.61 to $13.94 with a price target of $12.77.
