Sales: $1.6 billion. Corporate sales: $3.1 billion. Net income: $364 million.
Key Personnel: Steven J. Lund, chairman, Nu Skin Enterprises; Truman Hunt, president and chief executive officer, Nu Skin Enterprises; Joseph Y. Chang, chief scientific officer and executive vice president, product development; Daniel R. Chard, president, global sales and operation; Scott E. Schwerdt, president, Nu Skin Americas Region; Ritch N. Wood, chief financial officer; D. Matthew Dorny, vice president, general counsel and secretary.
Major Products: AgeLOC, Tru Face and Epoch anti-aging and personal care products.
New Products: AgeLOC TR90 weight management and body shaping system. To be launched: Facial Spa Device.
Comments: Sometimes, everything works out. That’s what happened for Nu Skin during the past year, as regulatory troubles in China, its biggest market, threatened to derail the company’s long-time success story. Earlier this year, Nu Skin China voluntarily suspended operations to cooperate with authorities after an article in the People’s Daily accused the company of operating a “suspected pyramid scheme.”
As a result of the article, Nu Skin’s stock price plunged, and Wall Street watchers speculated about the company’s long-term viability. But after an investigation, Nu Skin agreed to pay a fine and got back to business on May 1.
With the Chinese controversy behind it, Nu Skin is ready to soar. The company’s first quarter 2014 sales jumped 24% to $671 million.
“We are pleased to report record first-quarter results, generating year-over-year growth in all five of our regions,” said Truman Hunt, president and chief executive officer. “Our results are particularly encouraging given the business disruption we experienced in China during the first quarter, as well as currency headwinds we faced in many markets. With respect to China, our team took aggressive, proactive steps to address media and regulatory concerns in a timely manner. While these first-quarter events in China will have a negative impact on 2014 results, we are now focused on generating sustainable, long-term growth.”
By region, Greater China’s first-quarter revenue increased 63% to $278.9 million. The sales leader count in the region improved 41%, while the number of active reps increased 17% compared to the prior year. Revenue in North Asia increased 5% to $195.5 million. South Korea generated local-currency revenue growth of 38% while Japan local-currency revenue declined 14%. The number of sales leaders in the region was up 7% and the number of actives improved 11%. Revenue in the Americas improved 6% to $79.9 million. The number of sales leaders in the region improved 17% and the number of actives improved 10% compared to the prior year. Revenue in South Asia/Pacific increased 6% to $71.2 million. The region’s first-quarter sales leaders improved 27% while actives increased 17% compared to the same period in 2013. Revenues in Europe, Middle East and Africa rose 9% to $45.6 million. Sales leaders and actives increased 5% and 3%, respectively.
Great stuff, especially coming off a banner 2013. Last year, sales jumped 49% to more than $3.1 billion. As in prior years, Greater China led the way, with sales more than doubling to over $1.3 billion. Still, every region reported an increase in sales. North Asia rose nearly 11% to $869 million; South Asia/Pacific rose 15% to nearly $379 million; Americas jumped nearly 30% to $370 million and Europe improved nearly 7% to $195 million.
To keep growing in Asia, in April Nu Skin opened an Innovation Park in Shanghai that serves as the regional headquarters for the Greater China region. The site includes a world-class anti-aging research and development laboratories, as well as manufacturing facilities, modern meeting spaces and green areas. It is located in the heart of Shanghai’s Fengxian District on 9.4 acres and encompasses more than 365,000 square feet. The Innovation Park features three buildings: a headquarters that houses employees, a product development production and distribution center, and a vision hall that includes a 230-seat auditorium.
While so much news about Nu Skin revolves around China and the rest of Asia, the company continues to expand in its home base in Utah. In October, Nu Skin opened its new Innovation Center and expanded US headquarters. The company has invested more than $100 million in the new corporate facilities.
The expanded US headquarters campus includes more than 300,000 total square feet that features five research laboratories, a state-of-the-art data center, environmentally friendly design, and modern office and meeting spaces. At the heart is Nu Skin’s Center for Anti-aging Research, which will be the company’s global center for innovation and scientific discovery. The new research facilities will be instrumental in the development and evaluation of Nu Skin products.
“These new facilities reflect our investment in our future and our commitment to advancing Nu Skin’s long-term growth potential,” said Ritch Wood, chief financial officer. “We continue to foster a culture of innovation, providing a steady stream of state-of-the-art anti-aging solutions and a continually attractive business opportunity for our sales leaders. These new facilities also reflect the hard work and dedication of the entire Nu Skin family and our vision to become the leading direct selling company in the world.”
Last month, Nu Skin CEO Truman Hunt was elected chairman of the US Direct Selling Association.