Japan keeps bringing out new issues in companies in America which many might not have considered. One such name is Nu Skin Enterprises Inc. (NYSE: NUS), which develops and distributes anti-aging personal care products and nutritional supplements. A research call update from Canaccord Genuity highlights some of the risk and also the opportunity which exists here after Japan has taken a severe bite out of its share price in the last two days.
The research notes that the complete impact of the recent Japanese earthquake will not be known for some time, and it admits that sales of discretionary goods are likely to take a hit near-term. Canaccord Genuity’s Consumer Products Analyst is Scott Van Winkle and he noted significant exposure to Japan of about 30% of his expected 2011 revenue forecasts were expected to come from Japan. Again, sales are expected to be hit and the outcome of ongoing challenges currently remains unclear.
Van Winkle indicated that each 1% disruption to Japanese revenue versus his forecast will impact consolidated revenue by $4.7 million, while the impact to earnings will be roughly $0.02 EPS for each 1% sales disruption. That still assumes that incremental sales deliver a 40% contribution margin. He also noted that Nu Skin’s operations suffered no major physical impacts from the earthquake and tsunami.
Read more: Nu Skin: Japan Drop May Be Opportunity (NUS) – 24/7 Wall St. http://247wallst.com/2011/03/15/nu-skin-japan-drop-may-be-opportunity-nus/#ixzz1GhKQ6abJ