Nu Skin Enterprises reports record first quarter
supplements, has reported a good start to 2004 with a 20 per cent
increase in first quarter revenue. Growth in its US nutrition
business, momentum in Mainland China and beneficial foreign
currency fluctuations have all been attributed to the company's
success, writes Claire Johnston.
Net income - for the quarter ended 31 March 2004 - rose by 13.3 per cent to $14.5 million, up from $12.8 million the previous year. Net revenues also increased by 20 per cent to $264 million, compared to $219.6 million in 2003, impacted 6 per cent by favorable foreign currency fluctuations.
"We are encouraged with our record first quarter revenue. Sales in the US alone were up by 16 per cent, benefiting from our February global distributor convention and the growth in our nutrition business," said Nu Skin's CEO Truman Hunt.
In the United States revenues climbed to $35.1 million, benefiting from $5.8 million of sales to international distributors attending the company's convention.
Sales in Pharmanex - the company's supplement division - rose 40 per cent due mainly to the success of its flagship product, LifePak.
The continued emphasis on the monthly product subscription program and the Pharmanex BioPhotonic Scanner, a tool that monitors the level of certain antioxidants found within body tissue, is thought to have had a positive impact on the sale of LifePak, Pharmanex's core vitamin and mineral supplement.
"Global monthly product subscription orders continued to climb, reaching a 55 percent increase over the first quarter of last year. We are very encouraged by this growth and believe that our focus on improving retention through product subscriptions and other mechanisms will positively impact our business in the future," said Hunt.
Revenue in Greater China increased 78 percent to $47.6 million during the first quarter compared to prior year results. Mainland China continued to post strong results with revenue of $22.8 million, following the opening of the company's retail business there in 2003.
Revenue in North Asia increased 12 percent to $150.1 million in the first quarter, where the company effectively managed BSE issues by transitioning to non-bovine based capsules in Japan, minimizing stock-out risks to its Pharmanex products.
"Japan, the United States and Mainland China remain our key geographic priorities. In the United States, the Pharmanex Scanner and customer retention initiatives will continue to be the primary revenue growth drivers. Our immediate objective in Mainland China is to train our growing sales force, enabling us to build a strong foundation for what has become an important market for us," said Hunt.
Nu Skin Enterprises expects second quarter net revenues of $270 to $275 million, a 12 to 14 percent increase over the second quarter of 2003.
