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Nu Skin Enterprises Cuts its 3Q Outlook

October 31, 2005

Nu Skin Enterprises Inc. cut its financial forecast for the current third quarter, blaming sluggish sales in China, Japan and the U.S. Last month, hares of Nu Skin, which sells its own brand of cleansers, toners and other toiletries in 41 markets worldwide, sank $2.69, or 14.4%, to a new 52-week low of $16.01 on the New York Stock Exchange, where it was among the top percentage losers. The stock is down 36% so far this year, on a dividend-adjusted basis.
Nu Skin forecast third-quarter earnings between 24-26 cents per share, on $290 million in revenue. In July, the company had projected earnings from 29-30 cents per share, on revenue between $298-$303 million.
Nu Skin said uncertainty over recent rules governing direct selling in China have hurt sales. Direct selling in China has been banned since 1998, but in September, Beijing issued new rules on direct sellers, saying it would end the prohibition on direct sales in December. Nu Skin also said third-quarter earnings would be hurt by increased expenses over the prior year, including additional investment in China and expenses related to opening in Indonesia.

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