Having concluded the first half 2015, we now have companies’ second quarter reports. As we always do, we will focus on world’s six largest public direct selling companies, Avon, Herbalife, Natura, Nu Skin, Oriflame, and Tupperware, in alphabetical order.
As you analyse companies’ reports, you will see that US-based direct sellers have been suffering from the unfavorable impact of currency exchange rates. Since this does not seem to be a transient situation in the short-term, I would assume managements are considering options that will at least soften this impact. The brief review we have here covers “reported” figures, but not “constant Dollar” figures or numbers in “local currencies”. U.S. companies choose to do this to show the headwinds they take due to the currency rates.
Total revenue of Avon was 17% down last quarter. Active representatives were also down 2% year over year, and the total units sold decreased by 4%.
All of Avon’s regions contributed to the decrease in sales and Latin America took the first place with -19%.
For a more detailed review of Avon’s performances this year so far, please see our previous article, Avon’s 2015.
For more on Avon’s Q2 figures, please click here.
Herbalife reported $1.2 billion quarterly revenue, down 11% from last year. There were sales decreases in all of Herbalife’s regions but China. China posted 39% growth in the second quarter. The company’s mid-year growth performance is -12%.
CEO Michael O. Johnson says he is optimistic about the future and one reason to his optimism he adds, is the high distributor participation to company events. In May, over 18,500 attended the event in Brazil, and 22,000 attended the one in St. Louis, USA. For the upcoming EMEA convention in Russia, the expectation is to exceed 17,000 that will be more than 40% from last year. Management says, “St. Louis was a turning point” for their U.S. business.
Herbalife expects to have a yearly revenue decrease between 6.5%-9.5% from 2014.
For more on Herbalife’s Q2 figures, please click here.
In the second quarter, Natura posted 7% sales increase as compared to the second quarter of 2014. Company’s six-month performance was +6%. In its largest market Brazil, Natura’s sales decreased however, by 4.6% last quarter.
Being still a predominantly Brazil-driven business, Natura’s international operations account for a larger percent of its volume every year. While Brazil’s share was 82% in Q2 of 2014, this has dropped to 73% this year. Sales in Natura’s international operations grew by 60% last quarter. Mexico is Natura’s largest market after Brazil and it celebrates 10th anniversary this year in Mexico.
Currently, Natura has over 1.8 million consultants on the field, of which 1.3 million are in Brazil and 500,000 in other countries.
Management has announced that starting from this August, Natura consultants in Brazil will be able to get a Natura SIM Card and use a new application for placing orders on smartphones and tablets and to lease card terminals for receiving payment via debit and credit cards.
For more on Natura’s Q2 figures, please click here.
Nu Skin announced $560 million net revenue in Q2, a 14% decrease from last year same period. With this, Nu Skin closes the first six months with a sales figure that is 16% less than 2014’s mid-year figure.
The company saw diminishing sales in all of its regions in the first two quarters: EMEA -30%, Greater China -24%, North Asia -12%, South Asia/Pacific -9%, and Americas -4%.
Nu Skin continues to be an Asia-driven business. China, North Asia, and South Asia/Pacific regions generate close to 80% of company’s global sales volume.
CEO Truman Hunt was happy with these results: “We are pleased the business performed at the high end of our expectations for the second quarter.”
Nu Skin management’s expectation is to close the year with an annual revenue figure in the $2.40 to $2.44 billion range. This represents a 7% decrease from 2014. As Nu Skin’s last year sales was also worse than the previous year, 2015 will be the second consecutive year of diminishing revenue for Nu Skin.
For more on Nu Skin’s Q2 figures, please click here.
Oriflame reported 3% decrease in sales last quarter. Company’s active consultants decreased by 6% and the total units sold by 16%, too.
Oriflame’s CIS region continued to be a big problem. Sales in this region was down 27% in Q2. CIS countries account for about one third of company’s global volume. Europe was down 10%; Turkey, Africa & Asia up 35%; and Latin America up 15%.
CEO Magnus Brannstrom has been especially happy with the positively performing regions, saying, “We are pleased with the development in our key growth markets in Latin America, Turkey, Africa & Asia contributing with 48 % of the total Group sales during the second quarter. The strong growth in China continues and is now an increasingly important part of the business.”
For more on Oriflame’s Q2 figures, please click here.
In the second quarter, Tupperware’s sales was down 13% as compared to Q2 of last year. Two quarters together, it was down again, 13%.
In Europe, Tupperware’s quarterly sales growth was -16%, Asia Pacific’s was -8%, North America was even, and the worst was in South America with -25%.
“Our strong global management team continues to enhance and execute the levers of our business model to support and enable the growth of our 3.0 million global sales force. We also remain focused on the execution of our strategies to contemporize the business model, strengthen our core business fundamentals and extend our reach to continue to provide value to all of our stakeholders,” CEO Rick Goings commented on the results.
For the whole year of 2015, Tupperware management expects a 10-11% sales decrease from last year.
For more on Tupperware’s Q2 figures, please click here.
Let’s all wait and see what the second half of the year will bring to the industry.