DALLAS, TX -- Stonegate Capital Partners has updated its coverage on NU Skin Enterprises Inc. (NYSE: NUS) following the company's first quarter 2026 earnings release. NU Skin reported revenue of $320.6 million, adjusted net income of $6.8 million, and adjusted earnings per share of $0.14 for the quarter ended March 31, 2026. These results compared to Stonegate's estimates of $329.7 million in revenue, $7.7 million in adjusted net income, and $0.15 in adjusted EPS. Revenue came in near the low end of the company's guidance, while adjusted EPS remained within the guided range as management continued investing behind its Prysm iO platform and emerging markets while maintaining cost discipline.
Core Nu Skin gross margin improved 20 basis points year-over-year to 76.9%, but adjusted operating margin fell to 3.6% from 6.4% in the prior year period. Despite the margin compression, the more significant takeaway from management's commentary was evidence of early field stabilization. Brand affiliate confidence improved and new sales leaders grew year-over-year exiting the quarter, suggesting that the training and leader engagement initiatives around Prysm iO are beginning to take hold.
Prysm iO remains the core commercialization catalyst for NU Skin. According to Stonegate, nearly 2 million scans have been conducted across over 30,000 devices, supporting early adoption of the platform. Additionally, 5% year-over-year subscription volume growth indicates that Prysm iO is beginning to improve customer engagement and recurring revenue quality. This is critical as the company navigates a period of pressured headline KPIs: sales leaders, paid affiliates, and customers declined 13%, 8%, and 14% year-over-year, respectively. However, the improvement in new sales leader growth exiting the quarter offers a potential inflection point.
Guidance from NU Skin implies confidence in a second-half 2026 improvement cadence. The company maintained its full-year 2026 revenue guidance of $1.35 billion to $1.50 billion and adjusted EPS guidance of $0.80 to $1.20. This outlook is supported by broader adoption of Prysm iO, the planned launch in India by year-end, and continued cost discipline. Stonegate Capital Partners noted that the maintained guidance suggests management sees a path to recovery as the year progresses.
For investors, the implications are twofold. First, the early field stabilization and subscription growth signal that Prysm iO may be gaining traction, which could underpin a turnaround in the direct selling business. Second, the maintained guidance provides a framework for potential upside if execution improves. However, the decline in operating margins and key metrics such as paid affiliates and customers underscore the challenges NU Skin faces in revitalizing its sales force and customer base. The coming quarters will be critical to determine whether the early signs of stabilization translate into sustained growth.
Stonegate Capital Partners is a leading capital markets advisory firm providing investor relations, equity research, and institutional investor outreach services for public companies. Its affiliate, Stonegate Capital Markets (member FINRA), offers a full spectrum of investment banking services.
