Good day, and thank you for standing by. Welcome to the Q1 2026 Nu Skin Enterprises Earnings Conference Call. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, B.G. Hunt, Vice President, Treasurer and Investor Relations. Please go ahead.

Thanks, Kelly, and good afternoon, everyone. I'm joined by Ryan Napierski, President and CEO; and by our Interim CFO, Chelsea Lantz. I have worked closely with Chelsea for the past 15 years and can say with confidence that she brings both strong financial discipline and thoughtful, proven leadership. Today, we'll be sharing Nu Skin's Q1 2026 results and providing guidance for the remainder of the year. Before I turn time over to Ryan, let me point out that on today's call, comments will be made that include forward-looking statements. These statements involve important 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 statements. We believe these non-GAAP numbers assist in comparing period-to-period results in a more consistent manner. Please refer to our investor website, ir.nuskin.com for any required reconciliation of these non-GAAP numbers. And with that, I'd like to now turn the call over to Ryan.

Thanks, BG. Good afternoon, everyone. Thanks for joining us. I'm pleased to report our first quarter results, which were in line with expectations for both revenue and adjusted earnings, reflecting continued progress towards our vision of becoming the world's leading intelligent Beauty and Wellness platform. Powered by our talented global sales leaders. We made meaningful progress in Q1 with the sales leader introduction of Prysm iO and continue to build the foundation for growth in emerging markets in spite of uncertain macro environmental pressures that are impacting consumers and supply chains around the globe. From a regional perspective, we were pleased to see the hard work and dedication of our talented sales leaders across Latin America who delivered sustained growth, and we saw continued improvement in Mainland China with growing leader engagement around our Tru Face anti-aging product rollout. At the same time, a few of our reporting segments remained pressured by broader macroeconomic and industry dynamics. We were pleased with growing brand affiliate confidence and improving trends across several regions as well as year-over-year growth in new sales leaders exiting the quarter, both of which are indicators of improving energy around Nu Skin's entrepreneurial opportunity associated with our new product innovations. As I've discussed previously, our enterprise strategy is centered around two key growth drivers: first, advancing our intelligent wellness platform with our next disruptive innovation, Prysm iO; and second, further expansion in developing and emerging markets, including Latin America, Southeast Asia, China and India. Let me start with Prysm iO. We are seeing encouraging signs in new sales leader development across several markets as our leaders increasingly engage with Prysm iO and continue to build on our leading anti-aging Tru Face brand. These two initiatives are providing fuel for our sales force and our efforts to improve channel activation in the first half of the year as we work towards our return to growth in the back half. For more than 40 years, Nu Skin has been focused on helping people look, feel and live better grounded in science-based innovation, our leadership-driven opportunity and our force for good culture and community. We have established a strong position in integrated anti-aging science and product innovation led by our ageLOC brand, which has generated more than $15 billion in revenue since its inception. This proprietary gene-based approach to anti-aging remains highly differentiated, and we believe this category will expand further as younger generations increasingly seek youth preservation and integrated solutions across beauty, wellness and lifestyle. As we move into the next chapter of our anti-aging journey, we believe the future will be increasingly defined by intelligent technologies that provide people with personalized insights to help them live better longer. As consumers better understand and look to close the gap between their health span and their lifespan, the need for personalization and biomarker-driven insights continues to grow, aligning directly with our Intelligent Beauty and Wellness platform vision. While nutritional health is widely recognized as critical, the ability to measure it has historically been limited to invasive, complex and slow processes such as blood or serum sampling. As we've learned with other biomarker devices, changing consumer behavior requires simple, fast and easy assessments and real data collection paired with meaningful insights and personalized product solutions. Prysm iO enables consumers to assess a critical indicator of their nutritional health through a simple 15-second fingertip scan to receive a real-time personalized wellness assessment across four key domains of health: nutrition, fitness, lifestyle and supplementation. Since our initial introduction of Prysm last December, we've generated nearly 2 million scans from more than 30,000 Prysm iO devices around the globe. Combined with more than 20 million historical scans from our biophotonics scanner, this rapidly expanding data set is strengthening our ability to refine our wellness algorithms, improve assessment accuracy and enhance product recommendations. As Prysm iO adoption increases and more people are scanned, we expect subscriptions to increase, which historically drives significantly higher customer lifetime value. In fact, we're already beginning to see early indicators of this dynamic. On a year-over-year basis, subscription volume is up 5% and the percent of subscribers to total customers is up 14%. We're also seeing continued strength in our broader nutritional ecosystem. Sales of products certified to raise someone's Prysm iO score are outperforming total product sales and our flagship LifePak brand grew more than 10% year-over-year, reinforcing the value of measurement-based wellness and targeted supplementation. We are in the early stages of Prysm iO and as with any new platform, adoption requires training, behavior change and broader market education. We're actively supporting our sales leaders as they shift from using Prysm primarily as a product demonstration tool to positioning it as a household wellness device, one that enables ongoing engagement through personalized insights and recommendations. We believe that every household can benefit from access to this personal and family wellness assessment tool, and it is our ambition to do just this. This business model transition does create near-term switching costs as our leaders build new capabilities, integrate new tools and shift how they engage customers as they transition from social sellers to Beauty and Wellness consultants. Nevertheless, we believe that this is the right direction to provide wellness consumers what they are looking for as we unlock a more scalable, higher-value model over time. We are encouraged by early feedback, particularly among wellness-oriented communities such as fitness groups, physicians, clinicians and leaders who are positioning Prysm iO as a consultative wellness assessment platform. We're also continuing to integrate artificial intelligence into the Prysm iO experience. Today, AI supports scoring, data comparisons and personalized product recommendations. Future introductions of the platform are expected to provide deeper, more intuitive insights into individual wellness journeys, creating a more actionable and data-driven experience over time. Prysm iO is not simply another product launch. It's a foundational platform that connects our anti-aging science, product ecosystem, data capabilities and AI insights into our leadership opportunity. While adoption will take time, we believe it will become a defining part of Nu Skin's future. The incorporation of AI across our Intelligent Wellness platform will lead to improving unit economics as we leverage critical insights from data across the business to drive deeper and more meaningful engagement with our customers, affiliates and sales leaders around the globe. Now I'll turn quickly to talk about our second growth driver of expanding further into developing and emerging markets. Nu Skin has historically performed best in developed markets given our premium positioning. However, as consumers and entrepreneurs around the world become more sophisticated, we see a compelling opportunity to broaden our reach across a greater, more diverse set of markets. Latin America continues to be an important and growing region where we are providing our Nu Skin opportunity within reach, maintaining our commitment to science-backed innovation while offering localized product solutions to meet various consumer lifestyles and budgets. This includes refining our sales compensation structure to better align with local entrepreneurial segments by providing earlier compelling rewards for selling products and building their sales teams. We see additional opportunities to scale this model across Southeast Asia and throughout more areas of China, which contain hundreds of millions of emerging consumer segments seeking to look, feel and live better. And our next anticipated major market, India, holds tremendous potential in the future as we apply key learnings in this pre-market entry phase of operations to better understand the needs of entrepreneurs and customers in the world's most populous market. We're working to solidify our operations, infrastructure and such ahead of our planned formal launch by the end of this year. Evolving a premium global brand to a broader market is challenging and requires thoughtful execution. However, finding the right balance that remains true to our core brand promise while helping more people around the world look, feel and live better can unlock meaningful long-term growth. What remains constant throughout all of this is the central role of our independent sales leaders. We are a leadership-driven company, and our long-term success depends on our ability to inspire, equip and align our leaders around these compelling opportunities. Next week, we'll be in South Africa with our top global sales leaders for our Team Elite trip. This will provide an important opportunity to closely engage with them as we share learnings, strengthen alignment and continue building confidence in the future we are all creating together. Now throughout all of this, operating efficiency remains a critical focus for us. We're working tirelessly to sustain growth in gross margin in spite of the headwinds associated with uncertain trade practices, which have placed significant pressures over the past many years. We're pleased with progress to date and are committed to continuing improvements in gross margin through localized manufacturing, portfolio optimization and strategic pricing actions. We will also work to optimize selling expense to reward leadership for growth and maintain disciplined controls on our G&A. This discipline allows us to invest in our strategic growth priorities while ensuring our cost structure remains aligned with revenue. So with that, let me turn some time over to Chelsea Lantz, who's been a key leader for us over the past several years and a valuable contributor to our finance organization. Chelsea has been instrumental in driving cost reductions throughout our organization, and she is now leading us as interim CFO. It's also Chelsea's birthday tomorrow, so we've intentionally synced these two things up. So Chelsea, take it away.

Thank you, Ryan, and good afternoon, everyone. Before I begin, I'll briefly introduce myself. I'm currently serving as Interim Chief Financial Officer and have been with Nu Skin for 15 years, most recently as Corporate Controller. In that role, I partnered closely with the executive team on operational efficiency and gross margin initiatives while overseeing the company's global financial operations and financial reporting. I'm excited to continue supporting the business as we focus on disciplined execution and long-term value creation. Today, I'll walk through our first quarter results, provide our outlook for the second quarter and share an update on our expectations for the full year. Additional details can be found on our Investor Relations website. As a reminder, I will be discussing adjusted non-GAAP measures. Reconciliations to the most directly comparable GAAP measures are available on our website. For the first quarter, we delivered revenue of $320.6 million, within the guidance range, including a 1% favorable foreign currency impact. GAAP earnings per share were $0.04, while adjusted earnings per share were $0.14, excluding costs related to our decision to wind down our separate BeautyBio business and other charges. Adjusted EPS was in line with our guidance range. These results reflect continued investment in our key strategic priorities, including the expansion of our intelligent Beauty and Wellness platform through Prysm iO as well as ongoing investment in emerging markets. We believe these investments are important for our future growth, and we're encouraged by our ability to advance these initiatives while maintaining a disciplined focus on operational execution and margin improvement. From a margin perspective, adjusted gross margin was 67.9% compared to 67.8% in the prior year, reflecting a relatively stable revenue mix between the Nu Skin core and RISE entities. Within our core Nu Skin business, gross margin improved to 76.9%, up 20 basis points from the prior year, reflecting continued progress in our operational efficiency initiatives and product mix optimization, consistent with our focus on margin improvement. Consolidated selling expense was 34.3% of revenue compared to 32.5% in the prior year. Within the core Nu Skin business, selling expense was 40.5%, up from 38.7% in the prior year, consistent with our expectations as we continue to focus on rewarding sales leaders' productivity through compensation plan enhancements. Looking ahead, we expect selling expense in the core business to remain around 40% as we continue to prioritize investment in initiatives that support top-line revenue growth and sales leader engagement. General and administrative expenses declined by $9 million year-over-year on an adjusted basis, reflecting continued cost discipline while focusing on future investments. As a percentage of revenue, G&A was 29.9%, up from 28.9% in the prior year, reflecting our ongoing investments in technology and emerging market expansion, including India. As a result, adjusted operating margin for the quarter was 3.6%, down from 6.4% in the prior year. We remain focused on improving operating efficiency and aligning our cost structure with the current operating environment while continuing to invest in future growth initiatives. Now I'll turn to the balance sheet. Over the past several years, we have focused on paying down debt to strengthen our balance sheet and improve our liquidity position. During the quarter, we completed a refinancing of our credit facilities, extending maturities through 2031 and improving our overall cost of borrowing. This transaction provides appropriate financial flexibility to support our operating and strategic priorities. Proceeds from the refinance were used to repay existing indebtedness. Consistent with our disciplined capital allocation strategy, we returned approximately $8 million to shareholders during the quarter, comprised of $3 million in dividends and $5 million in share repurchases. At quarter end, we had $137.3 million remaining under our current share repurchase authorization. Looking ahead, we remain in the early stages of our key growth initiatives and are encouraged by early signs of stabilization, including improved brand affiliate and new sales leader trends across several markets. At the same time, we are mindful of potential inflationary pressures impacting consumer sentiment related to macro factors such as tariffs, recent fuel price increases and broader geopolitical dynamics. As a result, we are taking a measured approach as we evaluate the remainder of the year. We are maintaining our annual guidance and expect to provide more clarity following the second quarter. For the second quarter, we expect revenue in the range of $330 million to $360 million, assuming relatively neutral foreign currency impact, reflecting sequential improvement from the first quarter. We expect earnings per share in the range of $0.15 to $0.25, also reflecting sequential improvement. In closing, we were pleased to deliver results in line with expectations while continuing to invest in our strategic priorities. While the near-term environment remains challenging and the financial impact of these initiatives will take time to scale, we are focused on disciplined execution through managing costs, improving efficiencies and positioning the business for long-term growth. We appreciate your continued support and look forward to updating you on our progress next quarter. And with that, operator, we'll now open the call for questions.

Our first question comes from the line of Dave Storms of Stonegate.

Just kind of wanted to start with Prysm. I know, obviously, this is still very early innings. We're still in the training process for a lot of it. Just maybe any thoughts on what the qualities of a successful leader are having in Prysm? I know you mentioned the more wellness orientation, but is there anything that you're doing or tailoring your training that is going to help them hit the ground running?

Yes. I think that's a great question, Dave. To the point, we're seeing different leaders around the world utilizing it differently so far, kind of three to four months in. As I mentioned, the groups that tend to do that and convert best are those who are utilizing it as a wellness consultative or wellness assessment tool — part of a bigger assessment — and that seems to be an approach that works really well. For us, it's mostly about providing them with the knowledge of what Prysm is truly measuring from a carotenoid measurement perspective and how carotenoids or antioxidants benefit the body and help defend against oxidative stress. So there's the product knowledge or the device knowledge. There's the consumer journey knowledge that's necessary to scan themselves, to then learn about that scan and then ultimately lead to a subscription of products that work well. A lot of that is product training and behavior training. And then there's the CRM side or the follow-up and the persistency of being with those customers. I'd say those are probably the three elements on the consumer side. On the business side, because each of these sales leaders, of course, leads a team, it's important for that team to understand how to do the business with Prysm as well. So there's also a train-the-trainer approach. We have certifications in multiple markets today, primarily in Asia, for example, in Japan, Korea and China. We don't have those certifications in place everywhere yet, but we are working on them in other markets around the world, and we're working to bring those together based upon best practices out of these other markets.

That's super helpful. I appreciate all that color. I wanted to — the other big growth driver here is obviously India. You mentioned that you are making changes to some incentives and the like to maybe get some traction there. Just curious as to how aggressive you're being with really trying to grow India. Is it pretty paramount to get off on the right foot here? Or maybe how are you thinking of the growth potential there?

Yes. No, I think, in fact, we talk a lot about this because, as we said from the beginning, India is a very important mid- to long-term market for us. The direct selling industry in India is still relatively small — it's just over USD 3.5 billion — so it pales in comparison to some other markets, but it's also the fastest growing. We understand there's a lot of potential there. We also understand there's a lot of room for growth and development in that market before it will see an explosive level of growth, at least for our business model and product categories from an intelligent Beauty and Wellness perspective. So I would say it's very important for us to get it right. The reason we looked at the market in this unique way of a pre-market entry for about a year before we actually open doors for formal launch is precisely for us to learn about how to approach the Indian consumer and the Indian entrepreneur: highly educated, highly ambitious, fairly conservative on discretionary spend and disposable income still, especially in premium spaces. We have a lot to learn on our side as well about how to target them at the right level of spend and benefit. By the way, there's a whole host of learnings that we're gathering out of that. We want to get it right. I think these 12 months or so have been really important for us to dial in manufacturing, quality, logistics and distribution and even product formulas to ensure that they meet the consumer properly, and to align the business model itself. So I would say, as we look forward, we still anticipate low revenue impact in 2026; we're not forecasting a lot of revenue into our guide. It's really more learning in 2026, and, being so late in the year, we don't have much in the model. Then we'll begin to really ramp up year-by-year as we learn and grow.

I think that makes a lot of sense. Maybe just zooming out a little bit. You mentioned in your prepared remarks some of the macro headwinds. I know Chelsea mentioned them as well. I guess trying to think about where the most leverage is here: the consumers that you're catering to, are they most impacted by gas prices, diesel prices? Is there more leverage to the consumer sentiment number? I guess how are you thinking about where we could get the most leverage if we get some clarity over the next three to six months?

Yes. In fact, I just came from an event called Crossroads of the World and listened to some leading economic experts on the tariff pressure since 2018 and more recently with conflicts in the Middle East. It's interesting how it's been like boiling the frog where we've all been in this hot water for nearly a decade now, going back to 2018 in the first tariff round. When I step back and realize the impact that has happened over time on our gross margins, on raw materials and how that transfers through to the consumer, we were looking at general consumer goods post-COVID and you're talking about averages of 16% to 30% inflationary pressures on consumers. I mean that's enormous — up to 30% is like paying one-third more for products. We've seen enormous pressure on consumers. Then you add to that growing fuel costs that impact every good and every part of the consumer wallet. I think consumers are highly strained around the globe. I think we're still waiting to see the full effects of this, and Chelsea mentioned that we're trying to forecast out. Our view is very much that we need to continue to innovate our way through, providing greater value to our consumers largely in the digital space, but also continue to deliver highly efficacious formulas in our Beauty and Wellness. We're leaning heavily into that side of it to ensure that consumers do feel they're getting significant value. But there is that macro pressure that I think really does hurt margins over time as we know.

Yes. And I'd just add — as Ryan talked about and as I mentioned earlier — in terms of our guidance model, we're not currently anticipating a significant impact. But if increases in oil prices and other macroeconomic pressures are prolonged, then we're monitoring that as well. We're continuing to look for ways to optimize our gross margin to offset and navigate these uncertain times. So not currently anticipating a significant impact, but we're very aware and working on plans to mitigate the risk.

That's great color. I appreciate that. Maybe just one more. And Chelsea, I think you mentioned this in some of your prepared remarks as well, given some of the share buybacks, the dividends, the repayments, the balance sheet looks like it's in a good spot, and we obviously push you guys to continue to perform here. How do you think about prioritizing your capital allocation? Is it more of the same where it will be maybe a smattering of everything? Or is debt paydown going to be the primary? Or are you going to look to M&A markets? Just any thoughts there would be very helpful.

Yes. Thanks for the question, Dave. I would say it remains unchanged at this point. Our priorities are to continue to fund the business and prioritize investment in strategic opportunities to provide value for our customers and our sales leaders. We maintain a strong liquidity profile, and we did recently refinance our debt, which extended our liquidity through 2031, which we're happy about. So we do continue to look for opportunities to return value to shareholders through dividends and repurchasing shares as appropriate. But prioritizing our liquidity profile has been important to us. So we will look to pay down debt, especially with this new facility that we have.

This concludes the question-and-answer session. I would now like to turn it back to Ryan Napierski, President and CEO, for closing remarks.

Yes. Thank you. So in summary, we're making meaningful progress on our vision around our intelligent Beauty and Wellness platform, building that out with Prysm iO and expanding further into our emerging markets, both existing and new. Nu Skin's heritage has always been one that's based upon innovation and transformation, and we'll continue to do so as we navigate these uncertain times. We're very encouraged by these green shoots that we're beginning to see with our sales leaders and, again, exiting the quarter with new sales leader growth on a year-over-year basis gives us some more encouragement towards our plans of returning to growth in the second half of this year as we align and engage our leaders. And with that, we'll plan to keep you all updated in the months to come. So thank you for tuning in, and we'll speak with you in the next quarter.

Thank you for your participation in today's conference. This does conclude the program. You may now disconnect.