Nu Skin posts $311 million as gross margin retreats sharply

By Sophie Lindqvist

Third-quarter 2026 revenue reached $311 million at Nu Skin Enterprises, with adjusted earnings of $0.10 per share, both within guidance, as growth in its Rhyz manufacturing business offset pressure in core operations. Adjusted earnings excluded organizational transition costs and certain charges; generally accepted accounting principles (GAAP) produced a $0.02 loss per share.

Interim Chief Financial Officer Chelsea Lantz said the excluded transition costs relate to the new East-West operating model. Chief Executive Officer Ryan Napierski said overall customer and sales metrics remained under pressure, leaving wellness products, sales-channel development, an India launch and operating efficiency as the four priorities. The list covers both the plan and the pressure.

What did the margin mix expose?

Gross margin (revenue left after production costs) fell to 65% from 70.5% a year earlier, primarily because of the revenue mix between core Nu Skin and Rhyz, Lantz said. Core Nu Skin gross margin declined to 76.6% from 77.7%. Manufacturing growth helped the top line, but not the margin percentage.

Selling expenses fell to 33.2% of revenue from 35.8%, while the core rate eased to 40.9% from 41.7%. Nu Skin continues to target a core selling-expense rate of around 40%. General and administrative expenses dropped $10.9 million year over year, yet rose to 30.2% of revenue from 28.8%.

Adjusted operating margin, the share of revenue left after operating costs, declined to 3.7% from 5.9%. Selling-cost discipline did not prevent the gross-margin decline and higher administrative burden from outweighing those savings. Lower spending did not buy a wider margin.

How strong is the balance sheet?

Nu Skin ended the quarter with $164.9 million in cash and cash equivalents and $203.7 million in total debt. It paid $2.9 million in dividends and made no share repurchases, leaving $137.3 million available under its repurchase authorization. The quarter produced a dividend, not a repurchase.

Does Prysm justify the platform attention?

Nu Skin had placed approximately 41,000 Prysm iO devices globally and completed 4.5 million scans by the end of the third quarter. The device sits within a personalized wellness platform that connects nutritional assessments with product recommendations. The placement count is measurable; conversion remains the sterner test.

After a late-August app update added artificial-intelligence features, the scan-to-purchase conversion rate more than doubled to 10%. Napierski called the figure “an aggregate measure” and said scans can serve both customer acquisition and retention. He expects room for improvement but gave no target, leaving management without a useful finish line.

Sales of LifePak, the flagship nutritional supplement, grew nearly 3% year to date. Nu Skin also previewed anti-aging products focused on women’s health, with a rollout planned for mid-2027. The wellness portfolio now combines measurable device engagement, modest supplement growth and a later product rollout.

What is changing in the sales channel and India?

Nu Skin is investing in leadership training and adjusting compensation and incentive programs. Napierski said the emphasis is on sustained development of customer-acquisition and sales skills rather than short-term promotions. Many customers now buy directly through the company’s platform using links shared by affiliates, extending the direct-to-consumer reach.

India will receive a formal launch in the first half of 2027. Nu Skin is applying lessons from pre-marketing to refine operational, product and commercial preparations, according to Napierski. The company is also reorganizing around an East-West structure and plans to use manufacturing hubs in the United States and China to serve their respective regions.

Napierski said: “Producing closer to customers is expected to improve gross margin, speed to market and fixed-cost efficiency over time.” Lantz said the company expects approximately $5 million in remaining cash-based organizational transition costs in the fourth quarter. Those costs are excluded from the adjusted-earnings forecast.

What must the outlook deliver?

• Fourth-quarter revenue: $310 million to $340 million, including an expected foreign-currency tailwind (benefit from currency movements) of approximately 1%.
• Fourth-quarter earnings: $0.05 to $0.15 per share reported, and $0.11 to $0.21 adjusted.
• Full-year revenue: $1.26 billion to $1.29 billion.
• Full-year adjusted earnings: $0.55 to $0.65 per share.

Napierski anticipates sequential revenue growth in the fourth quarter as Nu Skin seeks to increase customer and affiliate engagement during the holiday season. The full-year reported outlook remains a loss of $5.08 to $4.98 per share, reflecting a second-quarter goodwill impairment (a write-down of acquired value) and a deferred tax valuation allowance (a reserve against future tax benefits).

Lantz said those items did not affect the company’s cash position. The accounting loss is large; the cash effect, for now, is nil.

Who is Nu Skin?

Nu Skin Enterprises, founded in 1984 and headquartered in Provo, Utah, is a global direct-selling company (sales through independent distributors rather than conventional stores). It develops and distributes personal care and wellness products, with a portfolio spanning skincare, beauty and personal care products, nutritional supplements, and wellness-related devices and technologies.

The portfolio includes the Nu Skin and Pharmanex brands, with the ageLOC product line focused on skincare and age-related wellness. Products move primarily through independent distributors, supported by digital commerce and other direct-to-consumer channels. The model remains distributor-led, with digital commerce providing a second route to market.