Majority of the direct selling companies’ second quarter revenues fell behind their 2022 figures just like they did in the first quarter. While acknowledging their performances, the company executives covered in this article are quite optimistic for the future as you will see in their comments below.
This review here includes six of the leading public direct sales companies’ (Herbalife, Medifast, Natura &Co, Nu Skin, Oriflame, and USANA) global sales results.
Herbalife’s sales in the second quarter totaled $1.3 billion. This was 6% lower than its revenues in the same quarter of last year. Yet this was also the second quarter in a row that the company’s year-over-year net sales trends improved.
Among the regions, Latin America (0.6%) and EMEA (0.2%) reported flat sales. Asia-Pacific’s sales were down 6%, North America’s 12%, and China’s 15%. Asia-Pacific is Herbalife’s largest region with its 23% share in the global sales.
Chairman and CEO Michael Johnson was happy with the results, saying, “This is a pivotal time for Herbalife. Our trends are improving, we are delivering on our product innovation commitments and our distributors are more energized and engaged in our business than I’ve ever seen. We expect this high-level of engagement and strong momentum to continue, driving our return to growth by the end of 2023.”
The company said the development of Herbalife One, its new, integrated digital technology platform, remains on track. With this, Herbalife expects to streamline the overall business, reduce costs, and simplify transactions for its distributors and their customers. Herbalife said it will begin launching its new website in late third quarter 2023, starting from Singapore. In Q4 of 2023, the company plans to launch its new distributor e-commerce platform starting in the UK and Spain. Planned investments for this whole Herbalife One project is approximately $400 million.
In early August, Herbalife announced the appointment of Stephan Gratziani, a top Herbalife distributor for over 32 years as its new Chief Strategy Officer. CEO Michael Johnson called this appointment “a game changer”. As an inducement, the company granted Gratziani 470,809 time-based stock appreciation rights, with a base price of $18.61/share. Together with this appointment, Chief Strategic Officer John DeSimone transitioned from his position to Special Advisor to Herbalife.
For more on Herbalife’s second quarter performance, please click here.
Medifast reported this time a sharp decline in its quarterly sales: -35%. Q2 2023 sales came down to $296 million (was $453 million in Q2 of 2022). However, this still exceeded the upper end of the company’s guidance range of $250-$270 million.
The company said this drop was primarily driven by a decrease in the number of active OPTAVIA coaches and the decline in their productivities. The total number of active earning OPTAVIA coaches decreased by 22% to 53,100.
During the quarter, Medifast announced it would exit Singapore and Hong Kong markets.
Commenting on these results, Medifast Chairman and CEO Dan Chard said, “We are ahead of our ‘Fuel for the Future’ plan with key initiatives aimed at driving efficiency and cost reduction, which helped to mitigate the impact of continued economic headwinds on our revenues during the quarter.” The recent launch of OPTAVIA ACTIVETM line of products marks an inflection point as these products will more than triple Medifast’s total addressable market, he added.
Medifast management expects third quarter 2023 revenue to be in the range of $220 million to $240 million. The company’s sales in the same quarter of 2022 were $390 million. By the end of 2025, the company is targeting a sustainable 15% revenue growth rate.
For more on Medifast’s second quarter performance, please click here.
Natura &Co’s second quarter consolidated revenues were BRL 7.8 billion (approx. US$ 1.6 billion), down 4.1% year-over-year.
From the business units’ perspective, Natura &Co Latam reported 1.7% decline. Natura brand’s sales increased by 17% with another quarter of solid growth in Brazil (+15%) and with the positive performance (+8%) in other countries. Avon International’s quarterly sales were down 8.1%. And finally, The Body Shop’s were down 12.0%.
40% of Natura &Co’s business is being generated in Brazil. 29% of sales are made in other Latin American countries, and 31% in the rest of the markets.
Fábio Barbosa, Group CEO of Natura &Co, said, “Natura & Co’s second-quarter performance continued to show the improvement already observed in Q1, with low-single digit top line growth at constant currency and a significant improvement in adjusted EBITDA margin… Q2 23 was also a landmark quarter for us, as we kicked off Wave 2 in Peru and Colombia, with quite compelling initial results. In both markets, we saw a meaningful acceleration of cross-selling between brands, and more importantly, significant CFT productivity growth.”
As Barbosa stated above, the integration of the Natura and Avon brands occurred in Peru and Colombia. This is a project Natura &Co names “Wave 2”. The management said they see an improvement in cross-sell activity, an acceleration in productivity in both regions and thus, an improvement in independent consultants’ earnings as a results of a more compelling product offer. The roll-out in Brazil was also confirmed, in line with the initial schedule.
For more on Natura &Co’s second quarter performance, please click here.
Nu Skin reported $500 million sales in the second quarter, a 16% decline compared to last year. The company’s growth as of mid-year was also -16%.
Nu Skin’s regional growth performances in the quarter: Mainland China +2%, Hong Kong/Taiwan -6%, Europe & Africa -8%, Japan -9%, Americas -14%, South Korea -23%, and Southeast Asia/Pacific -32%.
“Our second quarter results improved sequentially and landed within our guidance range,” said Ryan Napierski, Nu Skin president and CEO. “We are seeing early signs of momentum building in Mainland China; however, we continue to be negatively impacted in several key markets by macro-economic factors and associated price increases that have had a dampening effect on consumer spending and customer acquisition.”
Nu Skin recently announced its investment arm Rhyz has acquired BeautyBio, a skincare and beauty device brand. BeautyBio will continue to operate independently as an omnichannel brand.
The management said the company was in the final stages of preparation for the launch of the Nu Skin’s first holistic wellness, beauty and beauty device named “ageLOC WellSpa iO”. This device system is planned to be introduced in several markets in Q3 and is expected to be rolled out in nearly all markets by the end of 2023.
For the third quarter of 2023, Nu Skin anticipates $500 to $540 million, and for the whole year, $2.00 to $2.08 billion sales. Nu Skin’s 2022 revenues were $2.2 billion.
For more on Nu Skin’s second quarter performance, please click here.
Oriflame’s second quarter revenues were 211 million Euros, representing a 14% decrease from last year’s same period. The average number of members went from 2.2 million to 1.7 million and unit sales decreased by 24%.
At the regional level, Asia reported 26%, Türkiye & Africa 12%, Europe & CIS 11%, and Latin America 6% declines. The company said sales results remained challenging in all major markets in Asia, while China showed signs of improvements after Covid lockdowns were lifted at the end of the last year.
Europe & CIS is Oriflame’s largest region with its 54% share in total sales. Asia follows with 20%, Latin America 1with 7%, and Türkiye & Africa with 9% shares.
From the category perspective, 26% of the sales came from skin care products, 21% from fragrances, and 18% personal & hair care products. Wellness category accounted for 16% of company sales.
Oriflame changed its Chief Executive Officer during the second quarter. The company announced that CEO Magnus Brannstrom had decided to step down after more than 26 years with Oriflame. He had been at the CEO role for 18 years of this period. The new CEO Anna Malmhake first joined the company as a Board Member in 2014. Previously, she held executive roles at companies like P&G, Coca-Cola, and Motorola.
For more on Oriflame’s second quarter performance, please click here.
USANA reported $238 million sales in Q2 of 2023 versus $264 million Q2 of 2022 (-10%).
“USANA’s second quarter results were modestly ahead of internal expectations, highlighted by sequential improvement in mainland China and continued progress on several key strategic initiatives,” commented Jim Brown, President and Chief Executive Officer.
All USANA regions came up with decreasing quarterly sales: Southeast Asia Pacific -18%, North Asia -11%, Greater China -9%, and Americas & Europe region -5%.
Greater China is USANA’s largest region, generating 54% of total sales. At the earnings call, USANA management said their team in China did an excellent job during the second quarter and sales in this market exceeded expectations: “We are pleased with our performance in this market, particularly given the macroeconomic environment. The country continues to reopen, allowing us to hold more in-person meetings and reengage with our customers in a single largest market,” said CEO Jim Brown.
USANA management’s 2023 sales expectation is $900 – $950 million. The company plans to open India as its 25th global market in late 2023, after preparing for it for several years, the management said.
For more on USANA’s second quarter performance, please click here.
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Hakki Ozmorali is the Founder of WDS Consultancy, a management consulting and online publishing firm in Canada, specialized in providing services to direct selling firms. WDS Consultancy is the publisher of The World of Direct Selling, global industry’s leading weekly online publication since 2010. Hakki Ozmorali is an experienced professional with a strong background in direct sales. His work experiences in direct selling include Country and Regional Manager roles at various multinationals. You can contact Hakki here.
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