Following a promising fourth quarter in 2023, the first quarter reports in 2024 had not brought much optimism to the global direct sales industry. Looking at the second quarter reports, we can say the industry is still being hit with various challenges. However, there are also companies like Primerica, eXp Holdings, Betterware, Zinzino, and (as you will see below in detail) Natura &Co that posted revenue increases in the second quarter.
This review below covers Q2 performances of five major direct sellers: Herbalife, Medifast, Natura &Co, Nu Skin, and USANA.
Herbalife reported second quarter 2024 sales of $1.281 billion, down 2.5% year-over-year.
Latin America posted revenue increase in Q2 (+2.3%). Other regions’ growth performances were negative, at varying degrees: EMEA -0.6%, Asia Pacific -2.1%, North America -6.7%, and China -7.2%.
In the second quarter of 2024, the number of new distributors joining Herbalife worldwide increased 12%, reversing 12 consecutive quarters of year-over-year declines.
Herbalife had events in Thailand, Colombia, India and the U.S in the last quarter. The management said they had record attendances in APAC, where approximately 24,000 people convened in Bangkok, and the events in India drew nearly 36,000 people.
The management also announced a new mentoring, leadership development and accountability program that they called “Mastermind Program”. The program is geared towards creating sustainable growth and increased productivity, and will address
important areas that make the biggest difference in helping distributors succeed. Mastermind program will be launched in North America in late August and will later expand it into other markets.
Herbalife’s third quarter sales forecast is -4.5% to 0%. And for the whole year, it is -3.5% to +1.5% as compared to 2023.
For more on Herbalife’s 2024 second quarter performance, please click here.
Medifast’s second quarter 2024 revenue decreased 43% to $168.6 million from $296.2 million for the second quarter of 2023. The total number of active earning OPTAVIA Coaches also decreased 36%.
The company said they continue to face macroeconomic challenges, including increased competition in the health and wellness space, and a broad slowdown in consumer spending.
Medifast does not expect these pressures to ease in the short-term, but they anticipate their initiatives will begin to have a positive impact in 2025. Also, Medifast plans to release additional products later in 2025 and into 2026 which will extend beyond company’s current offerings and tap into additional ways to improve health and wellness.
“We are acting decisively to transform our business to position us for long-term growth, with a strong balance sheet free of debt, a clear focus on new customer acquisition, and a broader health and wellness offer to a significantly expanded target market,” said Dan Chard, Chairman & CEO.
Medifast management said they will position themselves against competition by leveraging their capabilities in science-based product development and clinically proven plans. They are focusing on initiating two incremental channels for growth, company-led advertising to drive brand awareness and customer acquisition.
Medifast announced they are testing a new channel approach through collaborating with LifeMD to support their patients who are seeking lifestyle support beyond medication.
The company expects third quarter 2024 revenue to be in the range of $125 to $145 million.
For more on Medifast’s 2024 second quarter performance, please click here.
Natura &Co’s Q2 consolidated net revenues were BRL 7.4 billion, up 5.4%.
Of its two business units, Natura &Co Latam reported 8.4% sales increase in the second quarter. Avon International’s sales were down 5.5% in the same period.
Within Natura &Co Latam, the positive trend was fueled by both Natura and Avon in Brazil, with Natura showing another quarter of strong growth, and Avon posting a significant recovery compared to previous quarters’ figures.
At Avon International, beauty sales were down 6.0% and a steeper decline came from home & style category (-27%). Management said Avon’s results were impacted by lower rep count (-11.1% year-over-year).
Group CEO Fabio Farbosa said, “The strong results in Q2-24 from Natura &Co Latam, even partially offset by the still challenging figures from Avon International, were able to turn the consolidated Natura &Co revenues back into positive territory while continuing to expand margin.”
On Avon’s filing for bankruptcy protection that happened last week, CEO Farbosa commented, “Avon Products Inc. announced it has initiated voluntary Chapter 11 proceedings in the U.S. Bankruptcy Court. This process should enable Avon to address its debt and legacy liabilities and emerge as a more solid and sustainable business. Natura &Co, as the largest creditor of Avon, supports this reorganization and sees Avon’s decision as another important step in Natura &Co’s simplification journey, which started a couple of years ago.”
For more on Natura &Co’s 2024 second quarter performance, please click here.
Nu Skin reported $439 million sales in the second quarter, 12% decline from last year’s same quarter/
Having performed in-line with their expectations for the first half of the year, CEO Ryan Napierski was satisfied, saying, “We are pleased with our progress as we perform to plan on our transformational efforts, and we are on track as evidenced by our second quarter results.”
The company was encouraged by sequential gains in several of its markets including the U.S. and most of Southeast Asia/Pacific, even though all the regions recorded revenue decreases versus last year: Southeast Asia/Pacific -5%, Hong Kong/Taiwan -9%, Europe & Africa -13%, Japan -16%, South Korea -18%, Americas -21%, and Mainland China -27%.
In the second quarter, 15% of Nu Skin’s revenues came from its Rhyz business. Year-over-year increase was 32%. Rhyz plays a critical role in their enterprise transformation, as CEO Napierski states.
Nu Skin is enhancing its market strategy that includes a revised business model, targeting product offering and streamlined operating infrastructure beginning with Latin America and parts of Southeast Asia in the second half. Additionally, the management announced they are intensifying their plans to enter India with a proprietary business model that will be a catalyst for expansion into other emerging markets.
Nu Skin anticipates $430 to $465 million sales in the third quarter (-14% to -7%), and $1.73 to $1.81 billion in 2024 (-12% to -8%).
For more on Nu Skin’s 2024 second quarter performance, please click here.
USANA’s second quarter sales were $213 million versus $238 million during Q2 of 2023.
All regions contributed to this overall 11% decrease: Americas and Europe 5%, Southeast Asia Pacific 10%, Greater China, and finally, North Asia 23%. China is USANA’s largest market with its more than 50% share.
“Second quarter operating results were below our expectations. Ongoing macroeconomic pressures in several of our key markets continue to impact consumer spending. This in turn creates challenges in our ability to attract and engage new customers and generate sales momentum. To counter these challenges, we have made several strategic changes in our business over the past few quarters, including restructuring our commercial team, heightening our focus on product innovation, increasing our efforts to engage our sales leaders with an Associate-first approach, expanding into India, and evaluating more business development activities,” said Jim Brown, President and CEO.
During the investors’ call, the management emphasized the work they have been doing to reduce the time needed for product development. In some cases, this takes up to three years and they said they were just not happy with that. CEO Brown said they should be able to do this within a year’s time.
USANA updated its revenue outlook for 2024 as $850 – $880 million (was $850 – $920 million).
For more on USANA’s 2024 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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