Once again, the article will focus on these companies’ revenue growth performances.

AVON

Following many quarters with disappointing sale figures, Avon started the year with a 5% revenue increase achieving $1.4 million worldwide sales.

Yet, company’s new CEO Jan Zijderveld was not happy. He said, “Avon’s first-quarter results were unsatisfactory and do not represent the underlying potential of the business.”

In fact, out of four regions, only EMEA came up with a meaningful sales increase (12%). EMEA is Avon’s largest region, generating more than 40% of its global volume. North Latin America was up 1% in the first quarter, South Latin America was at par (0%), and Asia Pacific reported 2% decline.

When it comes to the active representatives on the field, the situation was even worse as all four regions reported decreases: Asia Pacific and EMEA each -1%, and North and South Latin America each -6%, bringing the global figure to -4% as compared to Q1 of 2017.

CEO Zijderveld summarizes what they should do in Avon as: “To win in this market, we must significantly step up our competitiveness. It is important to be agile and quickly identify, understand emerging trends and capture those opportunities faster. This means Avon must start driving bigger on-trend innovations and platforms, and bring them to market much faster with greater scale and impact. For this, we need to become more glo-cal, this means global and local. A few big global innovations with scale and impact, while at the same time capturing opportunities through locally relevant innovations with speed and agility.”

Following the first quarter, Avon announced it had sold its business unit in Japan to LG Household and Health Care for approximately $96.5 million.

For more on Avon’s first quarter results, please click here and here.

HERBALIFE

Herbalife closed the first quarter with a solid 7% increase in its global sales. Company’s Q1 revenue was $1.2 billion this time.

Just like it was Avon’s, EMEA was also Herbalife’s star region during the last quarter. Revenue increase was over 18% in EMEA. Sales grew in Asia-Pacific by 12%, in Mexico by 9%, in South & Central America by 3%, and in North America by 1%. The only decline came from China (-2%). Management stressed the importance of the newly launched products in getting these results. Herbalife reported it had introduced over 60 products in this last quarter globally.

CEO Rich Goudis was more than satisfied with his company’s performance. “In the first quarter, we exceeded expectations as we return to growth in the U.S. ahead of schedule and, as such, we raised our financial outlook for the year. This is an exciting time for the company,” he commented during the investors’ call.

So, Herbalife management was even more optimistic following these results, stating their second quarter sales increase target as 8.5%-12.5%. Herbalife’s full year target for 2018 is 9.0%-13.0% over last year. If achieved, Herbalife will have between $4.8 billion to $5 billion revenue by the end of this year.

A few weeks ago in April, the company announced its strategic name change from “Herbalife” to “Herbalife Nutrition”. Rich Goudis explained the reasoning behind this move, “Our new name, Herbalife Nutrition, reflects our strategic transformation as a leader in the nutrition industry.”

For more on Herbalife’s first quarter results, please click here and here.

NATURA

Brazil’s Natura described its first quarter performance as “another solid growth in sales and profitability across the group”. In fact, Natura’s net revenue increase during Q1 was 56% versus prior year’s same period, reaching R$2.7 billion (approximately, US$750 million). This included three months of additional revenue from The Body Shop.

The group’s main line, Natura’s quarterly growth was 7% over prior-year. Its Brazil unit grew by 1% and its LATAM division by 23%. Natura has over 1 million consultants on the field.

The group has recently been re-branded itself as Natura & Co. Currently, Natura accounts for 62% of the group’s net revenue, The Body Shop for 30%, and Aesop for 8%.

For more on Natura’s first quarter results, please click here.

NU SKIN

Nu Skin achieved an impressive 23% sales growth in the first quarter and all of Nu Skin’s regions contributed to this. The highest percentage growths came from China and EMEA (both 32%). Americas/Pacific region’s contribution was 29%. China is Nu Skin’s largest market that accounts for about 1/3 of Nu Skin’s global revenue.

After having reached $616 million sales in Q1, CEO Rich Wood said, “Our revenue growth was driven by an 11 percent increase in customers and a 16 percent improvement in the number of sales leaders. We are encouraged by the early execution of our growth strategy centered on engaging platforms, enabling products and empowering programs.”

During the earnings call following the first quarter, Nu Skin management explained their growth strategy that had focused on three key pillars: Platforms, Products, and Programs.

For the second quarter, Nu Skin expects $630 to $650 million sales. This is 15% to 18% growth over prior year. And Nu Skin announced its 2018 revenue guidance as $2.51 billion to $2.56 billion, that is 10%-12% yearly growth.

For more on Nu Skin’s first quarter results, please click here and here.

ORIFLAME

Oriflame reported disappointing growth results this time. Its €330.8 million quarterly sales meant a 2.6% decline. Without the one-time impact of the new reporting standards the company announced it had started implementing, the decrease would still have been 2%.

In the first quarter, only one region recorded sales growth and that was Oriflame’s largest region, Asia&Turkey (9%). The rest reported declining sales: CIS (-17%), Latin America (-4%), and Europe&Africa (-2%). Once a very important region for Oriflame, CIS (i.e. Armenia, Azerbaijan, Belarus, Georgia, Kazakhstan, Kyrgyzstan, Moldova, Mongolia, Russia, Ukraine) seems to continue being a problem.

Oriflame’s active global sales force grew by 1% and reached 3.034 million. However, Oriflame owed this global growth only to the performance in Asia&Turkey, the active sales force declined in its all other regions.

Oriflame’s unit sales dropped by 6% and sales per active by 4% during the last quarter. From the category perspective, the management was especially happy with the performances of skin care and wellness as both achieved double digit sales growth during the quarter.

For more on Oriflame’s first quarter results, please click here.

TUPPERWARE

Tupperware joined Oriflame in the first quarter to report a sales decline: -2.2% with $543 million revenue. Its total sales force of 3.1 million was also down 2%.

At the country level, the most significant positive contribution to the first quarter results in local currency was in China, the management said. This was along with good results in Argentina, CIS, Fuller Mexico, Malaysia/Singapore, Tupperware Mexico and Tupperware South Africa. The local currency sales decreases were most significant in France, Germany and Italy, partially offset by the United States and Canada. Tupperware United States and Canada’s sales were up 9%.

During the earnings call, CEO Rick Goings commented on the results, “As you’ve seen in the first quarter it was a disappointment, down 2% in dollars, while local currency sales decreased 6%, which was below the low-end of our January guidance range of 3 points.”

Patricia Stitzel takes over as CEO so this was Rick Going’s last earnings call participating in as Tupperware’s chief executive. He said on this, “In the direct selling industry, there have been numerous horror stories regarding new leadership taking over a company with no industry knowledge. That continues to this day. And I’ve got to say that’s not the case here.”

Management expects -2% to 0% growth for the second quarter, and -1% to 1% for the whole year of 2018.

For more on Tupperware’s first quarter results, please click here and here.

USANA

With a global revenue of $292 million, USANA grew by 14% in the first quarter. The company’s total number of actives also increased 1.9% year-over-year to 585,000.

USANA’s North Asia region reported 40% sales increase, Greater China 20%, and  Southeast Asia Pacific 12%. Sales in Americas and Europe decreased by 1%.

More than half of USANA’s global business is being generated in China where it has been voluntarily conducting an internal investigation of its China operations, BabyCare Ltd as announced in February 2017. The investigation focuses on compliance with the Foreign Corrupt Practices Act and also certain conduct and policies like expense reimbursement policies. The company said it could not predict the duration, scope, or result of this investigation.

“We are off to a solid start to the year as we continue to see strong momentum in most of our regions around the world,” said Kevin Guest, USANA’s CEO.

USANA plans to open four new European markets, Germany, Spain, Italy and Romania in June this year. In preparation for this, company said it had already made products available on a not for resale basis in these markets.

After the results in the first three months, management announced its 2018 net sales target as $1.13 and $1.17 billion (previously between $1.11 and $1.16 billion).

For more on USANA’s first quarter results, please click here and here.

This concludes are brief analysis of a group of seven public direct sellers. We will wait and see how their results will evolve in the rest of 2018.

…..

Hakki Ozmorali is the Principal of WDS Consultancy, a management consulting firm in Canada specialized in providing services to direct selling firms. WDS Consultancy is a proud Supplier Member of the Canada DSA. It is also the publisher of The World of Direct Selling, global industry’s leading weekly online publication since 2010. Hakki 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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The post Direct Sales Giants’ First Quarter Results appeared first on The World of Direct Selling.

This week’s article will be a review of six of the largest public direct sales companies’ 2017 growth figures. Although they cannot represent the whole global industry, how these “biggies” have been doing surely gives an idea:

AVON

Avon’s Q4 2017 sales was at par with its previous year same period sales: Approximately $1.6 billion. This brought the company to $5.7 billion which was also almost the same as Avon’s 2016 performance.

Avon’s largest region South Latin America grew by 4% to $2.2 billion in 2017. The rest of the three regions concluded the year with negative growths: Asia-Pacific -6%, North Latin America -4% and finally, Europe, Middle East & Africa -1%,

The weakening on the field was even worse with the company’s active representatives declining by 3% in 2017. All four regions contributed to this with their negative performances.

Besides the not-so-good news from the revenue side, Avon management’s reports on the profit side made the investors happy this time: Avon realized more than $250 million of cost savings, exceeding its target of $230 million for 2017. This impacted its profitability positively and increased its operating profit by 21% in Q4, bringing a net income both quarterly and annually. This was the main reason that moved Avon’s share price from $2.14 to $2.94. It was only a few weeks before that, some of Avon’s institutional shareholders were so pessimistic that they had wanted the company to sell itself to an investor.

Jan Zijderveld, the newly-appointed CEO of Avon said, “Many people have asked me why I was attracted to this role… I came here because I can make a difference. Avon is operating in a dramatically changing consumer and competitive environment and business as usual is not an option. The Board has given me a clear mandate to dive deeply into all aspects of this business.”

Avon management did not expect the closure of Australia and New Zealand that will happen this year to have any negative impacts. CFO Jamie Wilson said the business there had been a net loss position for a number of years and with the exit, that loss would no longer hit their results.

In January this year, New Avon, the North American unit that Avon had sold before, launched a food supplements line and got into a new category. Whether if and when these products will be made available in Avon’s other markets has not been disclosed yet.

For more on Avon’s 2017 performance, please click here and here.



HERBALIFE

Herbalife’s revenue growth in the last quarter was 5%, bringing the quarterly sales to approximately $1.1 billion. Despite this, company’s sales was down 1% on an annual basis.

EMEA was the most successful of Herbalife’s regions in 2017 achieving a 7% growth. With its $869 million annual volume, EMEA is now company’s third largest region after Asia-Pacific (0% growth in 2017) and China (2% growth in 2017). Mexico’s sales declined by 1%, South-Central America’s by 3% and last but not least, North America’s by 12%.

The revenue decrease in North America was $116 million last year, taking it from its “pole position” to fourth in one year. CEO Rich Goudis said during the earnings call that this decline had slowed down in the US: -19% in Q2, -17% in Q3 and -8% in Q4.

“After a year of transition, we returned to net sales growth in the fourth quarter as expected, and we anticipate stronger net sales growth for the full year in 2018,” said Rich Goudis. For 2018, Herbalife’s expectation is to reach a net sales growth of 5.5 to 9.5% versus 2017.

Herbalife announced a new executive organization structure effective May 1, 2018. According to this, President Des Walsh is transitioning to the new role of Executive Vice Chairman. Concurrently with this, CFO John DeSimone will assume the role of Co-President and Chief Strategic Officer. Current Sr. VP Bosco Chiu will be promoted to Executive VP and CFO, general counsel Richard Werber will assume the new role of Chief Legal Officer and Sr. VP and Chief Compliance Officer Henry Wang will be promoted to Executive VP and General Counsel.

For more on Herbalife’s 2017 performance, please click here and here.

NU SKIN

Thanks mainly to the growth performances achieved in China (+18%) and its Americas region (+15%), Nu Skin achieved 3% sales increase in 2017, globally. These two regions’ Q4 growths were exceptionally phenomenal: Quarterly revenue increase in China was 60% and in Americas it was 33%. These two regions together generated 45% of Nu Skin’s volume. In fact, Nu Skin has not much business in the U.S. Company’s CFO Mark Lawrence said during the earnings call, “… the vast majority of our revenue and all of our profit, virtually all of our profit is overseas.”

EMEA’s annual revenue was up 9% in 2017 and South Asia/Pacific’s 1%, whereas South Korea ended up with -13%, Hong Kong/Taiwan with -9%, and Japan -8%.

Last year’s $2.279 million revenue also meant the end of a three-year-long era of declining sales for Nu Skin. This also put the company ahead of Tupperware as of end-2017. But still, Nu Skin’s 2017 sales is far from its 2013 revenue when it peaked at $3.177 million.

“We concluded 2017 on a high note with solid quarterly results driven by customer and sales leader growth.Our growth strategy, which remains focused on three key elements – engaging platforms, enabling products and empowering programs, continues to drive our positive results,” said Ritch Wood, Nu Skin’s CEO.

For 2018, Nu Skin announced it expected annual sales of $2.44 billion to $2.49 billion, and if this happens, that will be a 7 to 9% growth.

For more on Nu Skin’s 2017 performance, please click here and here.

ORIFLAME

Oriflame closed the year with an impressive 9% revenue increase. The company’s fourth quarter sales was EUR 380 million (up 7% from last year) and the year-end result was EUR 1.363 million. Despite this, Oriflame’s annual sales in 2017 still was lower than that of 2013 (EUR 1.407 million).

Unit sales in Q4 increased by 4% and the price/mix effect was up by 10%. This positive mix effect was attributed by management to “a combination of geographic and product mix, mainly driven by skin care and wellness”.

The positively contributing regions to this yearly 9% global sales increase were: Asia & Turkey (17%), CIS (10%), and Latin America (6%). The only sales decrease came from Europe & Africa (-1%). For several years, CIS region (Armenia, Azerbaijan, Belarus, Georgia, Kazakhstan, Kyrgyzstan, Moldova, Mongolia, Russia, Ukraine) has been a headache for the company with its continuously diminishing sales. This region (Oriflame’s second largest after Asia & Turkey) succeeded to report Euro sales growth in each of the four quarters in 2017.

CEO Magnus Brannstrom was happy with the results saying, “2017 was another year of healthy Euro growth and double-digit local currency growth. We delivered very strong profitability improvements…  Our strategic categories – Skin Care and Wellness sets and routines –  served as significant drivers of growth and price mix development.” In fact, Oriflame’s skin care (28%), and wellness (11%) categories together accounted for 39% of its global sales in 2017.

Oriflame management also announced that 94% of company’s global orders were placed online last year and approximately 2/3 of visits to its websites came from mobile devices.

For more on Oriflame’s 2017 performance, please click here.



TUPPERWARE

Following $589 million sales in the last quarter of 2017 (down from last year same period), Tupperware ended the year with $2.256 billion sales. Apart from South America (+6%), all of its regions brought negative growths in 4Q.

This situation was the final result for whole of 2017, too. On an annual basis, sales in South America increased by 20%, whereas each of Europe and Asia-Pacific reported -2% and North America -1% revenue growth. So, basically in 2017, Tupperware owed its 2% global sales increase to South America’s 20% regional growth.

At the markets level, Tupperware’s stars in the last quarter of 2017 were China (+33%), CIS (-18%), Mexico (+13%) and Brazil (+4%). Brazil is Tupperware’s largest market with its volume exceeding $300 million. China made over $200 million and has become the third largest (US & Canada, the second). Among those that disappointed were Indonesia (-21%), India (-19%), Italy (-12%), South Africa (-7%), and France (-6%).

In the fourth quarter, Tupperware announced it would close down its manufacturing and supply chain facilities in France. Management admitted during the earnings call that while they found it a necessary move, it impacted both the sales force and the consumers, resulting in undesirable numbers especially in France, Germany and Italy in the end.

After having declining sales for three consecutive years since 2013, last year was the first with a positive growth. For 2018, Tupperware announced it expected 2 to 4% sales increase, globally. Assuming the high-end (4%) is achieved ($2.346 b), Tupperware’s global sales will still be lower than that of its 2014 figure which was $2.606 b.

Tupperware last week announced Patricia A. Stitzel as the new CEO. Rick Goings has been at this post since 1996 and from now on, he will serve as Executive Chairman.

For more on Tupperware’s 2017 performance, please click here and here.

USANA

USANA reached another record high sales in 2017: $1.047 billion. In fact, it succeeded in increasing its revenue each and every year during the last decade. In seven of the last 10 years, company’s growth was double-digit:

For the fourth quarter of 2017, the revenue was $273 million compared with $253 million in the prior-year period, representing an 8.0% increase. This was the highest quarterly sales in company’s history, as reported by the management. North Asia’s year-over-year quarterly growth was 25%, Greater China’s 14% and Southeast Asia-Pacific’s 4%. Sales in Americas-Europe region decreased by 5%.

During 2017, company had  announced its plans for a mid-2018 entry to four new European markets: Germany, Spain, Italy and Romania. It said products now have been available to preferred customers on a not-for-resale basis in these countries.

Currently, more than half of USANA’s volume is being generated in China where it has been dealing with a problem. It was announced in February 2017 that the company had been voluntarily conducting an internal investigation of its operations there, focused on compliance with the foreign corruption regulations. USANA says at this time it cannot predict the duration, scope, or result of the investigation.

For 2018, the company expects its net sales to be between $1.11 and $1.16 billion, a growth of 6.0%-10.8%.

For more on USANA’s 2017 performance, please click here and here.

…..

Hakki Ozmorali is the Principal of WDS Consultancy, a management consulting firm in Canada specialized in providing services to direct selling firms. WDS Consultancy is a proud Supplier Member of the Canada DSA. It is also the publisher of The World of Direct Selling, global industry’s leading weekly online publication since 2010. Hakki 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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The post 2017 in Growth Numbers: Avon, Herbalife, Nu Skin, Oriflame, Tupperware, USANA appeared first on The World of Direct Selling.

This analysis will focus on the public direct selling companies, Avon, Herbalife, Natura, Nu Skin, Oriflame, Tupperware, and USANA, in alphabetical order.

AVON

Avon reported 1% sales increase in the third quarter on a year-over-year basis. But this was not enough to declare a nine-month growth. When the total of first three quarters taken, Avon’s sales is only at par with last year’s.

In order to close this year with at least 2016 sales figure (i.e. $ 5.718 billion), Avon will need to generate $1.571 billion in the last quarter. That means bringing in 2% more sales than what they did in 4Q of 2016.

CEO Sheri McCoy said, “While we saw mixed results, I am encouraged by the revenue improvement in many of our top 15 markets and the underlying business trends we are beginning to see… It will take time to fully realize the benefits from our near and long-term initiatives in this highly competitive market, but with the right team in place we are poised to accelerate the pace of our progress.” In August this year, Avon announced the CEO transition plan that is expected to be completed with Sheri McCoy stepping down in March 2018.

The decline in the number of Avon’s active representatives continued in the last quarter (-3%). Management’s view is that this decline was mainly driven by Brazil as a result of the intentionally applied tighter credit policies in this country. Global average order on the other hand, increased 3% with growth in South Latin America, Asia Pacific and North Latin America.

North Latin America achieved the highest quarterly sales growth (+5%), followed by EMEA’s 1%. Both South Latin America and Asia-Pacific regions reported 1% sales decreases. At the country level, the highest growth came from Mexico and Philippines (each 4%), and the lowest from the UK, where Avon’s new global headquarters is located. (-13%).

For more on Avon’s 3Q growth performance, please click here and here.

HERBALIFE

Herbalife’s third quarter 2017 net sales of $1.1 billion showed a decline of 3.3% as compared to the third quarter of 2016. As of end-3Q, Herbalife’s sales this year is 3.2% lower than that of last year’s, too.

CEO Rich Goudis was confident, saying, “During this year of transition, we believe our performance has now stabilized and we are seeing improvements in trends. By continuing to implement our strategic plan, we expect to build on the improving trends and return to growth in 2018.”

The “transition” Rich Goudis mentioned refers to the changes Herbalife had to make in its business in the U.S. as a result of the FTC settlement it had agreed to in 2016.

North America with its 17% decline, was the #1 contributor to Herbalife’s negative growth in the third quarter. South & Central America (-3.6%), China (-2%) and Asia-Pacific (-0.2%) followed it. EMEA (+6.1%) and Mexico (+1.3) were the two regions of Herbalife that reported positive figures.

Based on the current trends, the company expects sales growth in the range of  2.3-7.3% in the last quarter of 2017 on a year-over-year basis. Even with this, Herbalife’s year-end global sales guidance is between -1.9% and  -0.6%.

For more on Herbalife’s 3Q growth performance, please click here and here.

NATURA

Natura reported a strong growth in the third quarter with advances in all its businesses: R$ 2.4 billion, up 24.3% vs. Q3 of 2016, including one-month of revenue from the recently acquired The Body Shop. Excluding this, it was still double-digit: 11.4%.

Natura posted revenue growth of 10.4% in Brazil, its home country. In other countries in Latin America it achieved sales growth of 19% in local currency, “despite the difficult political and economic situation in Peru and the earthquake in Mexico” as Natura reports.

The sales through the Natura Network, Natura’s online channel maintained the trend of triple-digit growth in the first nine months. In the meanwhile, the company continued to expand its retail presence, reaching 18 Natura stores in shopping malls, 13 of which are in Sao Paulo and 5 in Rio de Janeiro. In addition to these Natura is present in 3,300 stores of major drugstore chains.

“This quarter represents a historical milestone for Natura. With the closing of the acquisition of The Body Shop, we took a decisive step towards becoming a global, multi-brand and multi-channel group, with three different businesses and brands committed to ethical and sustainable business practices that generate positive social impacts,” management commented on results. The “three different businesses” that are referred to here are Natura, Aesop, and The Body Shop.

For more on Natura’s 3Q growth performance, please click here.

NU SKIN

Third quarter sales of Nu Skin was $564 million. This was 7% less than 3Q of 2016. Speaking in percentages, the biggest decline came from Nu Skin’s South Korea region (-35%). South Korea used to generate more than 20% of company’s global sales. The other two negative figures were reported by Hong Kong-Taiwan (-15%) and Japan (-14%).

CFO Mark Lawrence said, “Looking forward, we expect fourth-quarter revenue in the $650 to $670 million range.” This, if achieved, will bring Nu Skin to an annual sales of $2.263-$2.283 billion that will be higher than its 2016 sales ($2.208 billion). Again, if achieved, this will also be the end of Nu Skin’s three-year consecutive revenue decline.

For more on Nu Skin’s 3Q growth performance, please click here and here.

ORIFLAME

Oriflame reported a solid 6% sales growth in the third quarter, bringing its quarterly sales to €295 million. This result also brought Oriflame’s 2017 end-3Q sales to €983 million that is 10% better than 2016’s same nine-month period.

Commenting in a written statement on the results, “CEO Magnus Brannstrom said, “We continued to execute on our strategic priorities resulting in yet another quarter of healthy growth and improved profitability. The overall performance in Asia & Turkey remained strong… the growth in the CIS continued… Latin America was affected by the earthquakes and negative timing. “ Please click on the image to watch what Brannstrom had to say in his own words.

Currently, 38% of Oriflame’s global business comes from its Asia & Turkey region. 24% from Europe & Africa, 24% from CIS, and 14% Latin America.

Unit sales in the third quarter increased by 2% and the price/mix effect was up by 9%, primarily driven by mix effect. The positive mix effect was reported as a combination of geographic and product mix, mainly driven by Skin Care and Wellness.

Oriflame’s number of registered actives was stable at 2.6 million at the end of 3Q.

During the quarter, Oriflame held its largest conference ever to celebrate its 50th Anniversary. Reportedly, close to 6,000 participants at the Global 50th Anniversary Cruise sailed together in the Mediterranean.

For more on Oriflame’’s 3Q growth performance, please click here.

TUPPERWARE

Tupperware’s quarterly sales growth was up 3% versus last year, reaching $540 million. Company’s nine-month sales performance was 3% above 2016’s same period as well.

Last quarter, Asia-Pacific was the only region that posted negative growth (-2%). South America was the growth champion with 12% increase compared to last year’s same period. It was followed by Tupperware North America (+7%), Europe (+3%), and Beauty North America (+2%).

At the markets level, Tupperware’s sales growth stars in the third quarter were China (+33%), Tupperware South Africa (+12%), Argentina (+12%), Brazil (11%), Tupperware Mexico (+9%), and Tupperware US & Canada (+8%). The most disappointing markets were India (-30%), France (-19%), and Indonesia (-18%).

Tupperware had announced previously it would close its manufacturing and distribution facility next year in France due to overcapacity.

Chairman and CEO Rick Goings said, “Our restructuring program, much of which relates to improvement actions in Europe, is on track, while we are also focused on strategies to reignite revenue growth in key markets, particularly India and Indonesia.”

For the last quarter of 2017, Tupperware’s revenue growth expectation is 0-2% and for the whole year 2-3%, compared to 2016. If the company succeeds in meeting this, just like Nu Skin, 2017 will be Tupperware’s first growth year after a three-year period of declining sales.

For more on Tupperware’s 3Q growth performance, please click here and here.

USANA

USANA reported $262 million global sales in 3Q, up 3% from last year same quarter. This brought company’s sales to $774 million for the first three quarters combined, again representing a 3% increase from last year.

USANA’s North Asia region grew by 36% and Greater China by 5.5% during the third quarter. Southeast Asia-Pacific declined 3.8% and Americas-Europe by 2.1%. Currently, 50% of USANA’s business comes from China.

“The third quarter was an exciting quarter for USANA. In addition to achieving record quarterly sales, we celebrated our 25th anniversary,” said CEO Kevin Guest.

During the quarter, USANA announced the introduction of a new skin care line, under Celavive brand, having seen a drop in skin care’s share in total sales. The expectation is to bring skin care’s 6% share to 10% by the end of 2018. USANA said it would discontinue Sense, its current skin care line. So, Celavive line is expected to be generating more than $100 million per year.

Management updated its net sales outlook for 2017 as $1.030 billion that is the top end of the company’s previously issued guidance of $1.015 billion.

USANA plans to continue expanding into Europe by by opening four new markets in 2018: Germany, Spain, Italy and Romania. CEO Guest said, USANA had allowed a customer base to grow in those markets that already reached several thousand customers in those countries.

For more on USANA’s 3Q growth performance, please click here and here.

These companies’ 2017 past reviews are at First Quarter and Second Quarter, if you wish have a look at.

Next week, we will be reviewing these seven companies’ look from a cost and profit perspective. We will also look into how the investors have been responding to their figures on the stock exchanges.

…..

Hakki Ozmorali is the Principal of WDS Consultancy, a consulting firm in Canada specialized in providing services to direct selling firms. He is also the publisher of The World of Direct Selling, global industry’s leading weekly online publication. He is an experienced professional with a strong background in direct sales. Hakki was the first corporate professional in the Turkish network marketing industry. His work experiences in direct selling include Country and Regional Manager roles at various multinationals in Turkey and in Canada. You can contact Hakki here.

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The post Third Quarter in 7 Companies’ Sales Figures appeared first on The World of Direct Selling.

AVON

Following the less-than-satisfactory results in the first quarter, there were hopes the second quarter would be better for Avon. This did not happen, though.

Company’s revenue decreased on a year-over-year basis by roughly 3%. There was a 3% decline in the number of representatives, too.

South Latin America reported 4% sales increase during the quarter. There were negative figures in all others: North Latin America -5%, EMEA -6%, and Asia Pacific -7%.

At the markets level, Russia and Brazil each grew by 7%. Mexico’s revenue was down 9%, Philippines’ 10%, and the UK’s was down 20%. In the UK, both the active representatives and the average order declined.

During the earnings call, management stated three reasons behind the poor performance in the second quarter: 1) Issues faced in the segmentation of Avon’s color cosmetics portfolio, 2) Dissatisfaction caused among reps in Mexico due to not being able to meet the increased demand, 3) Disruption in some markets, the U.K. being on top of the list.

Avon’s CEO Sheri McCoy said, “While we anticipated some challenges, second quarter performance fell below our expectations.” Following this last quarter, it was officially announced that McCoy would step down from the CEO role and also from the Board at the end of March 2018.

Sheri McCoy was appointed in April 2012 as Avon’s CEO. Since then, Avon has not been able to report an annual sales increase. It seems 2017 will be just another one. The same month McCoy was appointed, cosmetics giant Coty made an offer to acquire Avon for $10.7 billion . Then, Coty withdrew its offer saying it had taken too long for Avon respond. At the time Avon shares were valued at around $24, and now it is less than $3!

From a market capitalization perspective, Avon is now worth about 1/5 of Herbalife, and about 1/2.5 of each of Nu Skin and Tupperware.

For more on Avon’s Q2 performance please click here and here.

HERBALIFE

Herbalife’s second quarter 2017 net sales of $1.1 billion meant a decline of 5% compared to the second quarter 2016.

In this last quarter, among the six regions of Herbalife, only EMEA could report a sales increase (+3%). The others’ performances were: China 0%, Asia-Pacific 0%, Mexico -3%, South and Central America -8%, and North America -18%. As far as the individual markets are concerned, Herbalife management expressed their disappointments especially with the U.S., Mexico and China. The decline in the U.S., Herbalife said, was  a result of short-term trends from behavior, pattern adjustments due to the FTC implementation, and was believed to be transitionary in nature.

Referring to the changes imposed to the company by the FTC, CEO Rich Goudis stated, “With the successful implementation of tracking consumer retail transactions in the U.S., we are now entering into a new chapter for the company. Through technology innovations, and changes in our marketing plan here in the U.S., we are now collecting millions of customer receipts each month… With much of the transition behind us, we can now pivot back to an acute focus on growth.”

Herbalife said, over the past three months, it had captured approximately 9 million receipts in the U.S. It announced a new partnership with Salesforce, the world’s leading customer relationship management platform. Salesforce is expected to help Herbalife distributors leverage the information collected to create a more effective working environment.

The company also announced the promotion of Dave Pezzullo to Chief Operating Officer role. Dave has been serving most recently, as Executive Vice President of Worldwide Operations. Together with this came announcement of the creation of a new position reporting to the COO, the “Chief Innovation and Needs Officer”, that will be filled by Senior Vice President Chris Morris.

Herbalife expects to close the year with a sales growth of between -3% and +2%.

For more on Herbalife’s Q2 performance please click here and here.

NATURA

Natura reported its quarterly sales was on par with last year second quarter’s (BRL 2b, approx. USD 648m). This result pulled down company’s first quarter sales growth of 2.3% to 1% at the end of first half-2017.

Natura’s global second quarter performance was basically impacted by the poorer performance in Brazil, its largest market. Natura’s second quarter sales in Brazil was down 2.3% whereas its international operations’ was up 4.9%. At the end of the last quarter, Brazil accounted for 67% of the global sales. Three years ago this time in 2014, this figure was 82%.

At the end of Q2, Natura had 1.8 million consultants on the field of which 1.2 million were in Brazil, and 0.6 million in other markets.

Natura reported it had been working to transform the business model in Brazil, and had started implementation of what is called “Relationship Sales.” This new model includes: 1) Introduction of Business Leaders to replace Natura Consultant Advisors with more entrepreneurial focus, 2) New income opportunities, and 3) Communication and promotion campaigns.

Along with the field network, Natura has also been using e-commerce and the retail channel. Management said “Rede Natura”, company’s online sales platform, posted strong triple-digit growth at the end of the second quarter. This channel has reached a consumer base of 1.9 million in Brazil. The retail channel on the other hand, ended the quarter with 15 exclusive Natura-owned stores in shopping malls in Sao Paulo (10) and Rio de Janeiro (5).

In June this year, Natura first made an offer and then, signed an agreement to acquire The Body Shop for EUR 1 billion from L’Oreal. This acquisition is subject to approval by the authorities and that is expected to happen in the coming months.

For more on Natura’s Q2 performance please click here and here.

NU SKIN

Nu Skin’s second quarter sales was down more than 8%. Adding this performance to the one in the first quarter (+5.7%), Nu Skin closed the first half of the year with -2% revenue growth.

From a regional perspective, Americas reported 13.6% and EMEA 1.3% sales increase during the quarter. The rest of the regions posted negative figures: Mainland China -6.6%, South Korea -6.6%, Japan -11.1%, Hong Kong/Taiwan -17.8%, and South Asia/Pacific -26.4%.

Nu Skin’s business has been predominantly generated in the Asia and Pacific countries. As of mid-year 2017, the total volume in these countries makes up 80% of the global volume. Americas account for 13% and EMEA for 7%.

Since this Q2 performance was at the high end of its outlook of $530 to $550 million, management was satisfied with the results. CEO Ritch Wood said, “We believe our second-quarter results provide momentum we can build on as we prepare to introduce several new products and significant business initiatives in the fourth quarter.”

Nu Skin management reiterated its annual revenue guidance of $2.26 to $2.30 billion for 2017.

For more on Nu Skin’s Q2 performance please click here and here.

TUPPERWARE

Although at a slower pace than it achieved in the first quarter (5.5%), Tupperware managed to increase its global sales in the second quarter, too (1.4%).

Tupperware’s shining markets in terms of quarterly sales growth were: South Africa (+60%), China (+37%), Brazil (+32%), and Argentina (+21%). On a regional basis, South America was the most successful. Sales growth in South America in the second was +31% and its performance in the first two quarters combined was +36%.

Those markets that came up with the poorest results were: Indonesia (-38%) and France (-20%).  Having been Tupperware’s biggest market, the second quarter in Indonesia definitely is not something the management would have hoped for. However, management was also very disappointed with the performance in France, saying, “After nearly a decade of solid top and bottom-line growth, France has literally stalled out the last two years… the sales force size and demonstration capabilities have really slipped, and we began to rely a little bit too much on promotions, and this has impacted both sales and margins… In the last few months, we’ve made some important management changes in France.”

For several years, Tupperware Group management has been trying to find a way to reverse the negative trend at its cosmetics branch, Beauticontrol. Having come up with another 28% sales decrease in the last quarter, Tupperware reported it had decided to wind down this business. This decision is expected to bring a cost of $100-110 million to Tupperware. During the investors’ call, CEO Rick Goings clearly mentioned they had no intentions to close down company’s other cosmetics businesses namely, Fuller Mexico, Avroy Shlain and Nutrimetics.

Following the second quarter, Rick Goings said, “Strategically, we continue to move forward with our business transformation plans in key markets and other than for the Beauticontrol wind down, have not changed our expectations with regard to local currency sales growth in the second half of 2017.”

For the third quarter of 2017, Tupperware expects a 2-4% sales increase. Company’s year-end expectation is 3-4% growth. If this happens, Tupperware will be reporting a positive growth figure for the first time since 2013.

For more on Tupperware’s Q2 performance please click here and here.

USANA

USANA reported last quarter, a slight decrease in sales on a year-over-year basis ($257m vs $259m). Following this, USANA’s mid-year net sales growth is still ahead of last year’s.

From a regional perspective, sales increased 23.9% in North Asia, increased by 3.7% in Greater China, decreased by 4.8% in the Southeast Asia Pacific, and decreased by 10.2% in the Americas and Europe region.

USANA said the U.S. had been continuing to be a challenging market for the company and they were working on a variety of initiatives to change the trend in he U.S. But this last quarter, USANA also saw customer declines in Mexico and Canada, two markets that the company said, had generated consistent customer growth for the company in the past.

“The Americas and Europe region continues to present a challenge for USANA, notwithstanding our team’s continued efforts to generate growth. Our strategies for this region in the short-term include market-specific promotions during the back half of the year, as well as other initiatives to generate momentum that will be announced in August at our 25th Anniversary International Convention,” CEO Kevin Guest commented. USANA’s Americas and Europe region currently accounts for 23% of company’s global volume.

In February 2017, USANA disclosed it was voluntarily conducting an internal investigation of its China operations, BabyCare. The investigation focused on compliance with the Foreign Corrupt Practices Act and on certain conducts and policies at BabyCare. USANA said it could not predict the duration or result of this investigation.

USANA management updated its 2017 net sales expectation after the second quarter, increasing it to between  $1.015-1.030 billion (previously $1.04-$1.07 billion).

For more on USANA’s Q2 performance please click here and here.

With this analysis, we covered how six of the largest direct selling companies have been doing so far in 2017. We will be closely watching them in the second half, too.

…..

Hakki Ozmorali is the Principal of WDS Consultancy, a consulting firm specialized in providing services to direct selling firms. He is also the publisher of The World of Direct Selling, global industry’s leading weekly online publication. He is an experienced professional with a strong background in direct sales. Hakki was the first corporate professional in the Turkish network marketing industry. His work experiences in direct selling include Country and Regional Manager roles at various multinationals in Turkey and in Canada. You can contact Hakki here.

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The post Mid-Year Sales Performances of Six Public Direct Sellers appeared first on The World of Direct Selling.

Before going into the details of individual companies, few observations on the above table:

 * Over the last five-year period, Natura (42%), Herbalife (30%), and Nu Skin (27%) succeded to grow. Tupperware (-14%), Oriflame (-16%) and Avon (-38%) had declining sales.

* Avon reported negative growth in each of the last five years. Nu Skin’s and Tupperware’s sales have been decreasing in the last three years.

* Oriflame announced a revenue increase in 2016 for the first time in five years.

AVON

Avon’s last quarter revenue decreased by 2% to $1.6 billion, and 2016 revenue by 7% to $5.7 billion. This result marked the 21st straight quarter of revenue declines.

For the year-end result, all of Avon’s regions contributed to this global 7% decline: Asia-Pacific -11%, North Latin America -8%, South Latin America -7%, and EMEA -4%.

On the markets level, while Brazil was a shining star with a 27% sales increase in the last quarter, UK (-20%) and Mexico (-14%) were major disappointments.

CEO Sheri McCoy said, “Let me begin by saying that I am disappointed with our fourth order results… It is clear that we have more work to do on our multi-year transformation journey to improve consistency of performance, particularly in a handful of markets. For the quarter, both our constant currency revenue and our active representative growth came in below expectations.”

In fact, Avon’s active representitives in the last quarter of 2016 was down 2% as compared to the same quarter of 2015. And the major loss came from its Asia Pacific region (-9%).  The management highlighted the Active Rep declines in Malaysia, Colombia, Turkey and Italy.

As the company moves into 2017, the five key areas of focus and investment were listed during the Earnings Call as:

* Strengthening the Avon brand
* Introducing innovative products
* Pricing discipline
* Improving representative engagement
* Evolving the service model

Management also said  they would work to improve the top 15 markets through more resources and focus which represent approximately 80% of Avon’s revenue.

For more on Avon’s 2016 performance please click here and here.

HERBALIFE

Herbalife closed the last quarter of 2016 with $1.045 billion sales. This was 5% less than the previous year’s last quarter. And for the whole year of 2016, Herbalife’s revenue performance was slightly better than 2015 (+0.3%).

On the regional level, China reported the worst quarterly sales (-12%). The others’ were not so bright, as well: South & Central America -11%, Mexico -8%, Asia Pacific -3%, North America -1. The only positive figure was from EMEA (+2%).

Herbalife management also announced an agreement in principle to form a joint venture with Tasly Holding Group, a leading health products and services company based in China. The joint venture will develop and commercialize high-quality consumer health products based on Tasly’s deep portfolio of proprietary formulations, patents, know-hows, and clinical studies.

CEO Michael O. Johnson said, “I’m happy to say that we accomplished a lot in 2016 and I feel we are laying important ground work for the next 10 years at Herbalife Nutrition. That said, there are some key markets where we have work to do.” In a few months’ time in June, current COO Richard Goudis will take over as CEO of Herbalife. Michael O. Johnson will be company’s Executive Chairman.

During the Earnings Call following the 4Q report, COO Richard Goudis explained how they would comply with the FTC-imposed regulations. According to this, the rewards in the U.S. will be based on the final sales to end consumers as opposed to the initial sale from the company to a distributor. This will start in May. If the total of these sales meets or exceeds 80% of the total U.S. retail sales, then Herbalife will be able to pay out additional compensation on these sales. If such sales are below 80% of the U.S. retail sales, then the payout on documented sales will be capped at 10% above the total documented sales value. Richard Goudis added that this 80% was not a compliance requirement, but a threshold that if passed would allow Herbalife to pay out higher rewards for retail sales.

For 2017, Herbalife expects 0.3 to 3.3% net sales increase.

For more on Herbalife’s 2016 performance please click here and here.

NATURA

Natura closed the year with almost the same sales figure as last year’s. There was only a 0.2% growth. The company realized 68% of its annual revenue in its home country, Brazil. Of the six public companies reviewed here, Natura had the highest sales growth in the last five-year period (41%). Natura is also the only one that managed to grow in each of the five year, although its 2016 figure was the worst of the five.

The management announced “Rede Natura”, Natura’s online business unit had doubled its sales compared to 2015, ending the year with R$ 106.7 million and registering 93,000 Digital Natura Consultants and 1.5 million consumers.

Natura’s retail strategy also progressed during 2016 by launching five exclusive stores in shopping centers in the city of Sao Paulo. Natura said all of them have performed better than expected.

However, these developments do not mean Natura’s leaving the direct selling channel aside. The company’s focus in 2017 will be to “revitalize direct selling”. Natura is launching a new value proposition for the consultants to further develop them professionally, and modernize the way they work and increase their income.

During the last quarter of 2016, Natura Board announced that CEO Roberto Lima had resigned, after being for two years in the office. The new CEO would be Joao Paulo Ferreira. Ferreria has been with Natura since 2009 and his last position was the Vice President.

For more on Natura’s 2016 performance please click here and here.

Next week, we will look into Nu Skin, Oriflame, Tupperware and Amway’s figures.

…..

Hakki Ozmorali is the Principal of WDS Consultancy, a consulting firm specialized in providing services to direct selling firms. He is also the publisher of The World of Direct Selling, global industry’s leading weekly online publication. He is an experienced professional with a strong background in direct sales. Hakki was the first corporate professional in the Turkish network marketing industry. His work experiences in direct selling include Country Manager roles at Oriflame, Herbalife and LR Health & Beauty Systems, and Regional Director, North America role at Lifestyles Global Networks.






 
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