Shares of direct selling company Nu Skin were down more than 24% after reporting second quarter earnings and revenue that missed expectations.
The company also gave a third quarter revenue outlook that came in well below expectations.
Nu Skin is a direct selling company that distributes anti-ageing products.
According to the IRS, direct selling companies market their products via independent sellers who contact customers away from a retail store. These companies can operate as single- or multi-level marketing companies, with single-level marketers compensating sellers only for products sold, while multi-level marketers allow sales reps to earn commission from sales made by their underlying sellers.
Herbalife, for example, is a multi-level marketer that hedge funder Bill Ackman is famously short. Herbalife shares are also having a rough day, falling to a 52-week low.
In Q2, Nu Skin earned $US1.22 per share, below the $US1.27 expected by Wall Street, on revenue of $US650 million, shy of the $US709 million expected by the Street.
In Q3, the company said revenue is expected to come in between $US620-$640 million, well below current analysts estimates for revenue of $US847 million.
Nu Skin also amended its 10-Q for the first quarter, to include a $US21 million charge related to currency and tax-related adjustments.
The troubles for Nu Skin follow regulatory reviews the company faced in China earlier this year, which forced the company to suspend business promotional meetings from January until May.
On Twitter, TheStreet.com’s Herb Greenberg, who has long been critical of the company, tweeted some of the “highlights” from Nu Skins’ earnings conference call.
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