Their quarterly financial reports revealed that revenues of a number of direct selling companies lagged behind their Q3 2022 figures, with some experiencing significant declines while others saw more modest decreases. Having that said, there were also direct sellers like Nature’s Sunshine, Primerica, Zinzino, and Coway that reported positive performances.
This review here includes six major direct sales companies’ (Herbalife, Medifast, Natura &Co, Nu Skin, Oriflame, and USANA) global sales results.
Herbalife reported its third quarter 2023 sales as $1.3 billion, down 1.5% compared to the third quarter of 2022. The company noted that its year-over-year sales trends had improved for three sequential quarters.
“We are seeing signs of success, and we are delivering on our commitments, from Herbalife One and product innovation to how we support our distributors’ businesses,” said Chairman and CEO, Michael Johnson. “Our momentum is building steadily as we continue to evolve and transform Herbalife. More work is ahead of us, and we believe we are on a path to achieve sustainable growth.”
Herbalife One is the company’s new, integrated, modernized digital technology platform. Following its launch in Singapore during the quarter, Herbalife plans to launch in approximately 40 additional markets that represent approximately 80% of the company’s business, by the end of 2023.
At the regional level, EMEA (+5.4%) and Asia-Pacific (+2.2%) reported sales increases in Q3. There were revenue declines in other regions: North America (-12.5%), Latin America (-13%), and China (-19.1%). Management said India continued to outperform and EMEA posted two consecutive quarters of year-over-year growth. Now, their focus would be on returning to growth in the U.S. and China.
Management also announced that their overall strategies are now evolving. Their focus that had been primarily on supporting the B2B component of the business will now move towards the B2C component, through helping distributors better manage their customers.
For more on Herbalife’s third quarter performance, please click here.
Medifast’s third quarter 2023 revenue decreased 39.6% to $235.9 million from $390.4 million for the third quarter of 2022. However, this result was not a surprise as it sit at the upper end of company’s guidance range of $220 million to $240 million for the quarter.
This decrease was primarily driven by both the decline in the number of active OPTAVIA Coaches and the decline in the productivity per active Coach. The total number of active OPTAVIA Coaches decreased 28.9% to 47,100 compared to 66,200 for Q3 of 2022.
“We are adapting our business model to adjust to the rapidly evolving health and wellness market,” said Dan Chard, Chairman & CEO. “Medically supported weight loss solutions have brought a fresh focus to the landscape, and it’s important that we continue to develop an approach that recognizes the needs of the customers who choose to utilize medication as part of their health and wellness journey.”
Medifast announced the four components of its transformation for future growth as:
- Moving medically supported weight loss to next phase (developing approach for customers who seek medically supported weight loss solutions)
- Completing the product offers (launching additional products in 2024 that will extend the average customer lifetime value)
- Expanding digital capabilities (conducting attribution, analytics, and path-to-purchase optimizations leading to a marketing program expansion in 2024)
- Broadening customer base (increasing engagement of Hispanic Coaches & Customers and using the Hispanic Coaches in the US as a springboard for the Latin American expansion)
The company expects its full-year 2023 revenue to be in the range of $1,050 million to $1,070 million.
For more on Medifast’s third quarter performance, please click here.
Q3 2023 consolidated net revenue of BRL 7.5 billion was down 10.5% year-over-year.
Performances of business segments:
- Natura brand in Latam: Revenue was up 5.3% with another quarter of solid growth in Brazil and further growth in Hispanic Latam. In Brazil, revenue increase was 10.5% in the third quarter. Sales in other Latin American countries were down 2.6%.
- Avon brand in Latam: In Brazil, beauty category revenues decreased 24.8%. In Hispanic markets, net revenue from this category decreased 18.7% . Home & Style category also showed a decline.
- Avon International: Q3 2023 revenue was down 11.6%. Avon International generates 20% of the consolidated revenue.
- The Body Shop: Revenues declined by 15%, particularly impacted by store closures (-111 over the last 12 months).
Fábio Barbosa, Group CEO of Natura &Co, commented, “Natura &Co’s Q3 performance continued the trend of the first two quarters of the year, showing a strong expansion of both Gross and EBITDA margin versus the prior year, despite a small deceleration in revenues mainly caused by the Wave 2 implementation in Latam and the continuing declining trend in sales at The Body Shop. The main highlight of the quarter was the launch of Wave 2 in Brazil, which showed positive initial results.”
“Wave 2” is the name for the integration project of the Natura and Avon brands in Latin America.
Natura &Co recently announced a binding agreement to sell The Body Shop to private investor Aurelius Group for US$254 million. The Body Shop was acquired in 2017 by Natura for US$1.1 billion. The company now sees this sale as an important step to continue to streamline its business. The move represents the second major divestment by Natura this year as part of an organizational shakeup, following a deal announced in April to sell Aesop to L’Oreal at an enterprise value of $2.53 billion.
Natura &Co currently has operations in 90 countries with 32% of its revenue coming from outside Latin America.
For more on Natura &Co’s third quarter performance, please click here.
Nu Skin’s Q3 sales decreased by 7% to US$438 million. The company’s third quarter 2022 sales performance was $538 million.
Europe & Africa region reported 11% and Hong Kong/Taiwan region 3% sales increases. South Korea’s sales declined by 5%, China’s 7%, Southeast Asia/Pacific‘s 18%, and finally Americas’ 30%. Japan reported flat sales.
Ryan Napierski, Nu Skin President and CEO, said, “Our third quarter results were softer than expected as persistent macro-economic challenges in several of our key markets negatively affected consumer spending and customer acquisition, particularly in our Mainland China and Americas segments. Although we are disappointed in the third quarter results of our Nu Skin business, we are encouraged by stabilization and modest growth in three of our Nu Skin reporting segments, highlighted by double-digit gains in Europe & Africa.”
Management stressed that Nu Skin’s “Rhyz” segment performed well above their expectations. Rhyz consists of several businesses: Mavely is a leading affiliate marketing and technology platform that connects nearly 800 retailers and brands to more than 45,000 affiliates. Wasatch and Elevate manufacturing currently service more than 120 customers including Nu Skin and BeautyBio. BeautyBio is Nu Skin’s most recent clean beauty omnichannel acquisition. And LifeDNA, a DNA recommendation holds significant future potential for Nu Skin’s broader personalization strategy, the company said. Rhyz now accounts for 12% of Nu Skin’s global business. Management anticipates this will grow to 20% to 25% over the next two years.
For the last quarter of 2023, Nu Skin expects $440 to $480 million sales (-16% to -8%), and for the whole year, $1.92 to $1.96 billion (-14% to -12%).
For more on Nu Skin’s third quarter performance, please click here.
Oriflame reported EUR 162 million sales in the third quarter. This represented 26% decline comparing to its revenue performance (EUR 220 million) in the same quarter of 2022.
In Europe & CIS, sales were 28% lower; in Latin America, sales dropped 9%; Turkey & Africa region’s sales decreased by 27%; sales in Asia were down 36%. Europe & CIS is Oriflame’s largest region generating a little more than 50% of the global revenue.
In August, the company announced two executive changes: Chief Operating Officer Jesper Martinsson left the company. At the same time, Niclas Palmquist was promoted to Chief Commercial Officer. Niclas Palmquist most recently was Vice President of Business Technology and Digital Experience. Also during the quarter, a new Group Management team was formed.
Dissatisfied with the results, Oriflame launched a comprehensive cost and efficiency program to increase profitability and secure long-term growth and announced this on August 15. The program aims to deliver annual cost savings of approximately EUR 45 million once completed and will reduce about 20% of its staff across all levels and geographies.
Oriflame’s new operating model replaces its current regional management structure to increase empowerment in the markets. Within this context, the company declared some of its markets as “lead markets’ which will will have more autonomy than previously. These lead markets are announced as China, India, Turkey, Poland, and Mexico.
For more on Oriflame’s third quarter performance, please click here.
USANA’s third quarter sales were down 9% versus Q3 of 2022 (US$ 213 million vs. US$ 233 million).
China, company’s largest region with its 60%+ share, reported 3% decline. Sales decrease in North Asia was 6%, 14% in Americas and Europe, and 17% in Southeast Asia Pacific.
“Operating results for the third quarter did not meet our expectations, largely because of challenging economic conditions across many of our regions and a lower cadence of promotional activity during the quarter,” said Jim Brown, President and CEO.
Having finalized its preparations during the quarter, USANA plans to commence operations in India prior to year-end. Management believes India will provide a “meaningful and diverse growth opportunity”.
During the investors’ meeting, CEO Jim Brown said they had a list of top five potential markets to expand into that they had been evaluating. Yet he does not expect another launch to happen before 2025 due to the complexity of the launch in India.
Company recently made some adjustments to the structure of its management team: First, Brent Neidig assumed the role of Chief Commercial Officer. Neidig was the Managing Director of USANA’s largest market, China. Additionally, Walter Noot’s role as Chief Operating Officer was expanded to include USANA’s research and development department.
USANA anticipates to close 2023 with $900 – $920 million global sales.
For more on USANA’s third 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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