Nu Skin Enterprises Inc. (NYSE:NUS) Q2 2019 Earnings Conference Call Transcript
Aug 06, 2019 • 05:00 pm ET
Good afternoon, ladies and gentlemen, and welcome to the Q2 2019 Nu Skin Enterprises Earnings Conference Call. [Operator Instructions].
I would now like to turn the conference over to your host, Mr. Scott Pond, Vice President of Investor Relations. You may begin.
Thank you, Kyle, and good afternoon, everyone. On the call with me today are Ritch Wood, Chief Executive Officer; Ryan Napierski, President; Mark Lawrence, Chief Financial Officer; and Dr. Joe Chang, Chief Scientific Officer.
On today's call, comments will be made that include some forward-looking statements. These statements involve risks and uncertainties, and actual results may differ materially from those discussed or anticipated. Please refer to today's earnings release and our SEC filings for a complete discussion of these risks.
Also during the call, certain financial numbers may be discussed that differ from comparable numbers obtained in our financial statement. We believe these non-GAAP financial numbers assist in comparing period-to-period results in a more consistent manner. Please refer to our investor page at ir.nuskin.com for any required reconciliation of non-GAAP numbers.
Now I'd like to turn the time now to Ritch.
Ritch N. Wood
Thank you, Scott, and good afternoon, everyone. Thank you for joining us today. I understand there was a delay on this side of our wire service from the release today and so just went out recently. We apologize for that late submission. As you saw in our release today and consistent with our pre-release, our second quarter revenue was $623.5 million with earnings per share of $0.83. Our revenue and earnings were lower than previously expected due to primarily softness in China caused by the limitation of sales meetings from the negative consumer sentiment relating to the government's 100-day review of the nutrition and direct sales industry.
The government's 100-day review period ended on April 18th. However, the restriction on holding sales meetings continued throughout the quarter. These sales meetings are critical for acquiring, training and developing our sales force in China. Furthermore, the significant amount of press associated with the nutrition industry as well as direct selling negatively impacted consumer sentiment. These factors impacted our sales force with Mainland China sales leaders declining 27% against the prior year.
On a more positive note our customer base remained fairly steady benefiting from several consumer initiatives. Toward the end of the second quarter, we began holding limited meetings, and the approval of sales meetings has continued to improve into July and now August. During the month of July, for example, locations in which about two-thirds of our sales leaders where they live and work were open for meeting, and that has continued to modestly improve during the month of August. However, both the number and the size of meetings remain restricted compared to the pre-100-day period.
Despite this recent disruption, we continue to see great potential in China. It is a vast market with motivated and entrepreneurial people who need and appreciate both our products and opportunity. Our local management team has significant experience operating through challenging circumstances and