The direct selling industry showed a promising performance in general in the fourth quarter of 2023, boosting the optimism. Some of the companies still reported worse figures than their 2022 results. But there were also others that performed better on a year-over-year basis or at least slowed down their revenue declines.
Our review includes the fourth quarter performances of Herbalife, Medifast, Natura &Co, Nu Skin, Oriflame, and USANA.
Herbalife achieved year-over-year net sales growth in the fourth quarter of 2023: Sales were $1.2 billion, up 3% vs. 4Q of ’22. This marked the fourth consecutive quarter of improved year-over-year net sales trends. Yet Herbalife’s yearly growth performance was still down 3% in 2023.
Commenting on the results, Chairman and CEO Michael Johnson said, “We continue to modernize Herbalife with a sharp focus on top-line growth and margin expansion for 2024.”
China region reported the highest revenue growth (16%) in the fourth quarter. Asia-Pacific followed China with a growth of 9%. Latin America’s performance was 3%, and EMEA’s 1%. North America was the only region that recorded negative growth (-8%).
During the fourth quarter, Herbalife continued the rollout of its all-new Herbalife.com websites, which are part of Herbalife One. To date, the websites are live in markets that represent approximately 70% of the company’s sales. The rollout to the remaining planned markets is expected to be completed in 2024.
2023 marked Herbalife’s full return to in-person events. The company hosted nine “Extravaganzas” across the globe with nearly 125,000 attendees,
For 2024, the management said they are forecasting this year to be “relatively flat”, with the U.S. being their major focus. “We are in this to succeed, to get growth back into North America,” Michael Johnson said. In 2023, North America generated 22% of Herbalife’s global business. This figure was 24% in 2022.
For more on Herbalife’s 2023 fourth quarter performance, please click here.
Medifast reported $191 million sales in the fourth quarter, representing a 43% decline. The company closed the year with $1,072 billion sales and its forecast for full-year 2023 revenue was $1,05 million to $1,07 million.
The company stated that this was driven by both the decrease in the number of active earning OPTAVIA Coaches and the decline in the productivity per active earning Coach.
The total number of active earning OPTAVIA Coaches also decreased 33% to 41,100 compared to 60,900 for the fourth quarter of 2022.
Chairman and CEO Dan Chard commented, “We are realigning our business to respond to the evolving dynamics of the weight loss industry and to aggressively execute on bold initiatives to transform our business model. We are broadening our customer acquisition activities significantly, launching a broad-based national marketing effort and leaning into the medically-supported weight loss market.”
The company expects the first quarter 2024 revenue to be in the range of $155 million to $175 million. This was $349 million in the first quarter of 2023. This is due to the current challenges related to macroeconomic headwinds and disruption caused by “GLP-1 medications” are expected to continue in the near-term, the company said.
For more on Medifast’s 2023 fourth quarter performance, please click here.
Natura &Co’s consolidated revenue in the fourth quarter was BRL 6.6 billion, down 17% year-over-year basis.
The performances of its two business units were as follows: Natura &Co Latam -18% and Avon International -17%.
Within Natura &Co Latam, Natura Brazil’s sales were up 9% in constant currency. Avon’s performance showed volatility, influenced by the Wave 2 roll-outs in Brazil, Peru, and Colombia, and preparations for expansion into other Latin American markets. In Q4, Brazil experienced a 15% decrease in its consultants to 1.8 million, mainly due to the exit of the least productive consultants. The Hispanic Latam region also saw an 18% decrease in consultants. Avon Brazil reported a 12% decline in Q4-23 revenues within the beauty category.
Avon International’s Q4 revenue was down 17%, worsening from the generally stable sales figures delivered in the previous two quarters, primarily impacted by the home & style category, while beauty showed a stable performance. Avon International also saw a decline in the number of active representatives in the fourth quarter (-11%).
2023 was an important year for the company. As a part of its corporate strategy, Natura &Co continued to pursue a leaner holding structure enabling its business units to operate with more autonomy. It also had important advances on the company’s simplification side, as a result of the Aesop and The Body Shop divestments during the year. Furthermore, the management announced in February of 2024 that they were investigating the benefits of a potential separation of Natura &Co and Avon.
For more on Natura’s 2023 fourth quarter performance, please click here.
Nu Skin closed the fourth quarter with 6% and the full year with 12% sales decline, compared to 2022.
All regions but Hong Kong/Taiwan (+4%) reported decreasing sales figures in the last quarter: Mainland China -3%, Japan -5%, Europe & Africa -13%, Southeast Asia/Pacific -13%, South Korea -19%, and Americas -24%.
Asia-Pacific remained in 2023 as Nu Skin’s main source of revenues. Last year, approximately 2/3 of revenues were generated in these countries.
“Our progress was impacted by persistent macro-economic pressures and disruptions associated with transforming our business. This was particularly evident with our fourth quarter results, which were down in our Americas, South Korea and Europe & Africa segments. This was offset by seasonal promotions in Mainland China, stabilization in Japan and modest growth in our Hong Kong/Taiwan segment. In addition, we achieved strong growth in our Rhyz businesses, which accounted for 13 percent of our revenue in the fourth quarter,” said Ryan Napierski, Nu Skin president and CEO.
The company announced its current focus as: 1) Accelerating the growth opportunities in Rhyz; 2) Facilitating a new market expansion model beginning with India anticipated in 2025; and 3) Furthering the build-out of the digital-first affiliate opportunity platform.
Nu Skin stated it achieved over 100% growth in its Rhyz businesses, which accounted for 13% of the total revenue in the fourth quarter. Rhyz is Nu Skin’s investment arm that consists of several businesses.
Management expects $400 to $435 million revenue in Q1 2024 (-17% to -10%) and $1.73 to $1.87 billion in 2024 (-12% to -5%).
For more on Nu Skin’s 2023 fourth quarter performance, please click here.
Oriflame continued its unsatisfactory performance in the fourth quarter, too: Sales were down by 25% to EUR 199 million. With this, the company’s 2023 full year sales growth was -19%. The last time Oriflame reported an annual sales increase was in 2017.
In its Europe & CIS region, sales were 29%; in Latin America 19%; in Asia 22% and in Türkiye & Africa 28% lower as compared to the last quarter of 2022.
Europe & CIS is Oriflame’s largest region with its 59% share in company’s sales. The second largest is Asia with a share of 22%.
The management said its comprehensive cost and efficiency program to increase profitability while at the same time ensuring continued strategic investments, has delivered above expectations. Also, the new commercial strategic initiatives are well under way, it added. Total savings are expected to deliver the previously announced EUR 45 million savings which will allow for additional investments to support the turnaround of the company.
While it is too early to see the tangible results of all initiatives, there were several encouraging factors around the new “Beauty Community Model” (BCM), the company reported.
For more on Oriflame’s 2023 fourth quarter performance, please click here.
USANA’s fourth quarter sales were $221 million in Q4 2023 (versus $228 million during Q4 2022), decreasing by 3%.
All regions recorded declining sales in the quarter: Americas and Europe -1%, China -2%, Southeast Asia Pacific -4%, and North Asia -10%.
About 80% of USANA’s global sales came from markets in Asia Pacific, and China alone generates more than half of the global business. When asked about the economic slow down in the Chinese economy during the investors’ meeting, Chief Commercial Officer Brent Neidig said the wellness space is quite resilient there and they are quite optimistic in the wellness category.
At the end of 2023, USANA launched operations in India, the company’s 25th global market.
“USANA delivered solid fourth quarter operating results, which exceeded our expectations,” said Jim Brown, President and CEO. “Our sales strengthened, in part, in response to a global incentive offering that was particularly effective in our Greater China region where it helped generate double-digit sequential growth in Active Customer counts. This boost helped to offset the seasonal slowdown we typically experience during the final month of the quarter and helped us finish the year strong.”
For 2024, company management expects sales of $850 – $920 million. This forecast reflects year-over-year net sales performance between flat and down 7% on a constant currency basis.
For more on USANA’s 2023 fourth 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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