Nu Skin Enterprises Inc., the skin-care product maker being probed by China’s government, fell as much as 5.8 percent after forecasting first-quarter profit and sales that trailed analysts’ estimates because of the investigation.
The shares dropped 5.2 percent to $79.15 at 9:55 a.m. in New York after early falling as low as $78.65. Provo, Utah-based Nu Skin had slid 40 percent this year through Feb. 28, the most recent trading day.
Profit per share in the current quarter will be 90 cents to 94 cents on revenue of $650 million to $670 million, the company said today in a statement. Analysts projected profit of $1.20 a share on sales of $732.3 million, according to the averages of estimates compiled by Bloomberg.
Chief Executive Officer M. Truman Hunt has been defending his company after the Chinese government said it would investigate a report in the People’s Daily newspaper that Nu Skin is a “suspected illegal pyramid scheme.” Nu Skin also is conducting an internal review of its operations there. Lower-than-expected revenue and costs from the probes will put pressure on profitability, Nu Skin said today.
Hunt has said that Nu Skin is “absolutely not a pyramid scheme.”