NU SKIN ENTERPRISES, INC. (NUS)

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

This Quarterly Report on Form 10-Q (this “Quarterly Report”) contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange
Act of 1934, as amended, that represent our current expectations and beliefs. All statements other than statements of historical fact are “forward-looking statements” for purposes of federal and state securities laws and include, but are not
limited to, statements of management’s expectations regarding our performance, growth, initiatives, strategies, products, ingredients, product introductions and offerings, product portfolio optimization, restructuring and exit activities,
acquisitions, the integration and performance of acquired companies, divestitures, opportunities and risks; statements of management’s expectations, plans and beliefs regarding global economic conditions and our markets (including India), sales
force, sales compensation plan and customer base; statements regarding government policies and regulations relating to our industry, including government policies and regulations in or related to the United States and Mainland China; statements
regarding tariffs and trade policies; statements regarding the outcome of litigation, audits, investigations, and other legal or regulatory matters; statements of projections and expectations regarding future sales, expenses, operating results,
taxes, duties, capital expenditures, sources and uses of cash, foreign-currency fluctuations or devaluations, repatriation of undistributed earnings, and other financial items; statements regarding the payment of future dividends and stock
repurchases; accounting estimates and assumptions; statements of belief; and statements of assumptions underlying any of the foregoing. In some cases, you can identify these statements by forward-looking words such as “believe,” “expect,” “enable,”
“project,” “anticipate,” “determine,” “estimate,” “intend,” “plan,” “goal,” “objective,” “targets,” “become,” “likely,” “will,” “would,” “could,” “may,” “might,” the negative of these words and other similar words. We undertake no obligation to
publicly update or revise any forward-looking statement, whether as a result of new information, future events or otherwise, except as required by law. We caution and advise readers that these statements are based on assumptions that may not be
realized and involve important risks and uncertainties that could cause actual results to differ materially from the expectations and beliefs contained herein. For a summary of these risks, see the risk factors included in our Annual Report on Form
10-K for the 2025 fiscal year and in any of our subsequent Securities and Exchange Commission filings, including this Quarterly Report.

The following Management’s Discussion and Analysis should be read in conjunction with our consolidated financial statements and related notes and Management’s Discussion and Analysis included in our Annual Report on
Form 10-K for the 2025 fiscal year, and our other reports filed with the Securities and Exchange Commission through the date of this Quarterly Report.

Overview

Revenue for the three-month period ended June 30, 2026 decreased 17.1% to $320.1 million, compared to $386.1 million in the prior-year period, and revenue for the six-month period ended June 30, 2026 decreased 14.6%
to $640.7 million, compared to $750.6 million in the prior-year period. Our revenue in the second quarter of 2026 was negatively impacted by 1.0% from foreign-currency fluctuations. Our Customers, Paid Affiliates and Sales Leaders declined 14%, 8%
and 9%, respectively, on a year-over-year basis.

The declines for the three- and six-month periods ended June 30, 2026 were largely driven by the continued macroeconomic challenges we have been facing in our markets, which have negatively impacted consumer spending
and customer acquisition. Our priorities for 2026 focus on business model optimization, driven by the continued rollout of enhancements to our sales performance plan, the continued launch of our Prysm iO
intelligent wellness platform and business expansion into India. Our early learnings from the Prysm iO have resulted in a shift in the strategy from a device placement focus to an assessment model that is
more conducive to in-person engagement. In addition, from our preview in India we have identified the need to simplify the model in advance of our full market opening, which is now slated for the first half of 2027.

Earnings per share for the second quarter of 2026 decreased to $(5.14), compared to $0.43 in the prior-year period. Earnings per share for the first six months of 2026 decreased to $(5.12),
compared to $2.59 in the prior-year period. Our second quarter 2026 earnings per share were negatively impacted by an impairment charge of $78.9 million and a $167.5 million valuation allowance associated with our U.S. deferred tax assets, as
well as the decline in revenue. Our earnings per share for the first six months of 2026 were negatively impacted by the second quarter impairment charge, second quarter valuation allowance, charges associated with our first quarter of 2026 wind
down of our separate BeautyBio business and decline in revenue. Our 2025 earnings per share benefited from the January 2025 sale of our Mavely business, which generated a pre-tax gain of approximately $176.2 million, partially offset by the
associated taxes, an intangible asset group impairment of $25.1 million in our Rhyz Other segment and a non-cash loss on equity investment of $28.1 million.

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Segment Results

We report our business in nine segments to reflect our current management approach. These segments consist of our seven geographic Nu Skin segments—Americas, Mainland China, Southeast Asia/Pacific, Japan, Europe
& Africa, South Korea and Hong Kong/Taiwan—and our two Rhyz segments—Manufacturing and Rhyz Other. The Nu Skin Other category includes miscellaneous corporate revenue and related adjustments.

The following table sets forth revenue for the three- and six-month periods ended June 30, 2026 and 2025 for each of our reportable segments (U.S. dollars in thousands):

The tables below set forth summarized financial information for each of our reportable segments for the three- and six-month periods ended June 30, 2026 and 2025 (U.S.
dollars in thousands). Segment contribution excludes certain intercompany charges, specifically royalties, license fees, transfer pricing and other miscellaneous items. We use segment contribution to measure the
portion of profitability that the segment managers have the ability to control for their respective segments. For additional information regarding our segments and the calculation of segment contribution, see Note 11 to the consolidated financial
statements contained in this report.

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ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion of our financial condition and results of operations should be read in conjunction with the consolidated financial statements and related notes, which are included in this
Annual Report on Form 10-K.

Business Overview

Our Products

Nu Skin Enterprises, Inc. develops and distributes a comprehensive line of premium-quality beauty and wellness solutions in nearly 50 markets worldwide. In 2025, our revenue of $1.5
billion was primarily generated by our two primary product categories: beauty products and wellness products. We operate in the direct selling channel, primarily utilizing person-to-person marketing to
promote and sell our products, including through the use of social and digital platforms.

In addition to our core Nu Skin business, we also explore new areas
of synergistic and adjacent growth through our strategic investment arm known as Rhyz Inc., which we formed in 2018. Our Rhyz businesses primarily consist of consumer, technology and manufacturing companies. In 2025, the Rhyz companies
generated $223.6 million, or 15%, of our 2025 reported revenue (excluding sales to our core Nu Skin business). As discussed further in “Rhyz Companies,” below, in January 2025 we sold one of our Rhyz businesses that accounted for $69.6
million of our 2024 reported revenue. Our Rhyz companies enable us to optimize our cost of goods, improve lead times, diversify our revenue mix, and create synergies for our brands.

Our Global Operations

In 2025, we generated approximately 26% of our revenue from the United States (consisting of our Nu Skin United States and Rhyz businesses) and the remainder from our international markets. Given
the size of our international operations, our results, as reported in U.S. dollars, are often impacted by foreign-currency fluctuations; in 2025, our revenue was negatively impacted 0.8% from foreign-currency fluctuations compared to 2024. Our
results also can be impacted by global economic, political, demographic and business trends and conditions.

A Global Network of Customers, Paid Affiliates and Sales Leaders

As of December 31, 2025, we had 748,796 persons who purchased directly from the company during the previous three months (“Customers”). Our Customer numbers include members of our sales force who
made such a purchase, including Paid Affiliates and those who qualify as Sales Leaders, but they do not include consumers who purchase directly from members of our sales force. We believe a significant majority of Customers purchase our
products primarily for personal or family consumption but are not actively pursuing the opportunity to generate supplemental income by actively and consistently marketing and reselling products.

Our revenue is highly influenced by the number and productivity of our Sales Leaders. “Sales Leaders” are our Brand Affiliates, as well as sales employees and independent marketers in Mainland
China, who achieve certain qualification requirements. Our reported Sales Leaders number is the three-month average of our monthly Sales Leaders as of the end of each month of the quarter.

As we continue to focus on customer acquisition and social commerce, we believe our number of Paid Affiliates is an important indicator of consumer purchasing activity in our business. “Paid
Affiliates” are any Brand Affiliates, as well as members of our sales force in Mainland China, who earned sales compensation during the previous three months. Paid Affiliates power our social commerce model and are a bridge to attracting new
customers and nurturing relationships and community.

We have been successful in attracting and motivating our sales force by:

Our global sales force helps us to rapidly introduce products and penetrate our markets with modest up-front promotional expense. We rely on our sales force to create consumer demand for our
products, as opposed to a traditional approach of advertising-generated consumer awareness. Our approach is particularly effective with products that benefit from personal education and demonstration. Similar to other companies in our industry,
we experience relatively high turnover among our sales force.

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To enhance customer retention, we have developed product subscription and loyalty programs that provide incentives for consumers to commit to
purchase a specific amount of product on a monthly basis. Several of our products are conducive to subscriptions. For example, Prysm iO
and its accompanying mobile application are designed to generate subscription sales. All purchases under these programs are subject to our standard product payment and return policies. We believe these subscription and loyalty programs have
improved consumer retention, have had a stabilizing impact on revenue and have helped generate recurring sales.

Product Innovation

Our sales force markets and sells our products, and attracts others to the opportunity, based on the distinguishing benefits and innovative characteristics of our products. As a result, we
leverage our scientific expertise and product development resources to introduce innovative beauty, wellness and anti-aging products. Our sales force is increasingly using social media to market and sell our products. To continue to leverage
social media, it is imperative that we develop demonstrable products that are unique and engaging to younger consumers. We strive to strike a balance between the expenses associated with our scientific expertise and sales compensation with a
competitive price point.

Any delays or difficulties in introducing compelling products or attractive initiatives or tools into our markets may have a negative impact on our revenue and our number of Customers, Paid
Affiliates and Sales Leaders.

Our Product Launch Process

Prior to making a product generally available for purchase in a market, we often do one or more introductory offerings of the product, such as a preview of the product to our Sales Leaders or other product
introduction or promotion. We refer to the entire process, beginning with the introductory offering through general availability of the product, as a product launch or our product launch process. The timing of the launch of a particular product
often varies from market to market depending on such factors as customer demand, affiliate brand focus, product registration or other local legal requirements, and product availability in our supply chain.

Sales Leader previews and other product introductions and promotions sometimes generate significant activity and a high level of purchasing, which can result in a higher-than-normal increase in revenue, Customers,
Paid Affiliates and Sales Leaders during the quarter and skew year-over-year and sequential comparisons. We believe our product launch process attracts new Customers, Paid Affiliates and Sales Leaders to our business, increases consumer trial,
and provides us with important marketing and forecasting information about our products. Please refer to Item 1A. Risk Factors for more information on risks related to our product launch process.

Income Statement Presentation

We report revenue in nine segments, and we translate revenue from each market’s local currency into U.S. dollars using weighted-average exchange
rates. Revenue is measured as the amount of consideration we expect to receive in exchange for transferring products. All revenue associated with a contract is recognized when we satisfy our performance obligations under the contract. We
recognize revenue by transferring the promised products to the customer, with revenue primarily recognized at shipping point, the point in time the customer obtains control of the products. We recognize revenue for shipping and handling
charges at the time the products are delivered to or picked up by the customer. In most markets, we offer a return policy that allows our sales force to return unopened and unused product for up to 30 days for a full refund, or 12 months
subject to a 10% restocking fee. Reported revenue is net of returns, which have historically been less than 5% of annual revenue. Sales taxes and value added taxes in foreign jurisdictions that are collected from customers and remitted to
governmental authorities are accounted for on a net basis and therefore are excluded from net sales.

Cost of sales primarily consists of:

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For markets other than Mainland China, in 2025, we sourced most of our beauty products and wellness products from trusted third-party suppliers and manufacturers. In Mainland China, we operate
manufacturing facilities where we produce the majority of our beauty and wellness products sold in Mainland China. We also produce some products at these facilities that are exported to other markets. In addition, our Rhyz Manufacturing entities
in the United States are producing some of our products. Cost of sales and gross profit, on a consolidated basis, may fluctuate as a result of changes in the ratio between self-manufactured products and products sourced from third-party vendors.
In addition, because we purchase a significant amount of our goods in U.S. dollars and recognize revenue in local currencies, our gross margin is subject to exchange rate risks. Because our gross margins vary from product to product and due to
higher pricing in some markets, changes in product mix and geographic revenue mix can impact our gross margin on a consolidated basis.

Selling expenses are our most significant expense and are classified as operating expenses. Selling expenses include sales commissions paid to our
sales force, special incentives, costs for incentive trips, cost of sales force conventions and other rewards, as well as salaries, service fees, benefits, bonuses and other labor and unemployment expenses we pay to our sales force in Mainland
China. The sales force conventions are held in various markets worldwide, which we generally expense in the period in which they are incurred. Because our various sales force conventions are not held during each fiscal year, or in the same
period each year, their impact on our general and administrative expenses may vary from year to year and from quarter to quarter. For example, we currently plan to hold a global convention approximately every other year. We held our last
in-person global convention in the third quarter of 2024, with an east event in South Korea and a west event in the United States, and we currently plan to hold our
next in-person global convention in the third quarter of 2026. These conventions have significant expenses associated with them. Because we have not incurred expenses for these conventions during e

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