Nu Skin Enterprises plans a multimillion dollar restructuring that will include layoffs and store closures, primarily in China.
Although the company is still evaluating the direction of the restructuring, it will probably be felt very little by the 1,200 employees at its Provo headquarters, Kara Schenk, senior director of corporate communications, said.
"We expect minimal impact on the corporate headquarters," she said. "It is mostly international."
Nu Skin announced its intentions Monday, when it said that they will include $10 million or more in restructuring charges in its fourth-quarter results. The announcement immediately sent the stock downward, with it losing nearly 18 percent in midday trading and over 8 percent by the end of trading.
The stock recovered Tuesday, however, gaining returning to within pennies of last week's share price at $17.06.
That may be due to the good news which Schenk said was included in the results, including increased revenue and earnings growth. Their markets in the United States, Europe and Korea also saw double-digit growth, which helped offset disappointing growth in two of the company's biggest markets, China and Japan.
"We had very strong top-line growth," she said.
Nu Skin executives also authorized a $100 million stock buyback.
In China, the company is planning to close 67 stores and open five flagship stores. Schenk said the company is planning to focus its efforts to more effectively market its products in the country.
"We are looking at key provinces and cities in China," she said.
The restructuring follows a similar move last year, when the company spent $13 million on restructuring. The charges for the upcoming quarter are related to employee severance costs and lease termination costs.
Nu Skin predicts revenue of $295 million to $300 million in the fourth quarter, while analysts expect a profit of $302.4 million, according to a poll by Thomson Financial.
For fiscal 2008, the company expects earnings between $1.15 and $1.22 per share on revenue of $1.18 billion to $1.2 billion. Analysts polled by Thomson Financial expect net income of $1.12 per share on revenue of $1.22 billion.
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