Miguel Fernandez Archives - The World of Direct Selling https://worldofdirectselling.com/tag/miguel-fernandez/ The World of Direct Selling provides expert articles and news updates on the global direct sales industry. Thu, 05 Nov 2020 18:14:51 +0000 en-US hourly 1 https://wordpress.org/?v=6.4.3 https://i0.wp.com/worldofdirectselling.com/wp-content/uploads/2016/04/cropped-people2.png?fit=32%2C32&ssl=1 Miguel Fernandez Archives - The World of Direct Selling https://worldofdirectselling.com/tag/miguel-fernandez/ 32 32 A Glance at the Direct Sales Industry in Mid-2020 https://worldofdirectselling.com/direct-sales-industry-in-mid-2020/ https://worldofdirectselling.com/direct-sales-industry-in-mid-2020/#respond Mon, 17 Aug 2020 05:00:34 +0000 https://worldofdirectselling.com/?p=16992 The first half of 2020 is now behind us. The pessimism in the industry that prevailed when the pandemic first broke out was later on replaced by wide-spread optimism. Do the numbers back this argument? Medifast for instance, reported 13% revenue growth in the first half of the year. Nature’s Sunshine’s figure was +0.6%. Mannatech’s […]

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Direct selling industry's financial reports in mid-2020. The first half of 2020 is now behind us. The pessimism in the industry that prevailed when the pandemic first broke out was later on replaced by wide-spread optimism. Do the numbers back this argument?

Medifast for instance, reported 13% revenue growth in the first half of the year. Nature’s Sunshine’s figure was +0.6%. Mannatech’s sales on the other hand, declined by 5.6% in the first six months.

Shall we dive into some of the direct sellers’ reports more deeply? Let’s do it.

HERBALIFE

Following a very successful first quarter, Herbalife’s performance in the last three months was also in the positive direction: $1.346 billion sales with 9% global revenue growth. In fact, management announced the second quarter of 2020 was the largest quarter in Herbalife’s 40-year history in terms of “volume points”.

North America reported 39% quarterly sales increase, EMEA 14% and China 12%. On the other side, South & Central America region came up with 23%, Mexico with 21% and Asia-Pacific with 5% declines.

In the U.S., year-over-year volume points were at an all-time high and the monthly average number of unique customers increased year-over-year by more than 25% in the second quarter, the management reported. Additionally, some of European countries’ growth figures were very impressive: Spain 20%, Turkey 27%, France 55%, and the UK 90%. Herbalife distributors in Europe were able to adapt quickly to the new circumstances and transfer their businesses into a virtual environment, company said.

CEO John Agwunobi said, “As the numbers and facts demonstrates Herbalife Nutrition is performing at an exceptional level and we believe ourJohn Agwunobi is the CEO of Herbalife. distributors’ entrepreneurial spirit, combined with our quality line of nutrition products, will lead to continued growth. From a demand perspective, our business is backed by favorable consumer trends in an environment that has never been more responsive to what we bring to the table.”

For the remaining of 2020, the management announced that the extent and duration of business disruption and the impact from the pandemic could not be estimated so it would not provide a guidance.

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



NATURA &CO

Natura &Co’s first quarter revenue growth was 2%. This time it reported a significant decline: -13%.

Among the brands, Aesop recorded 35% growth in Q2 and The Body Shop increased its sales by 16%. However, the two of the larger brands posted negative growth figures: Natura &Co LATAM -17%, and Avon International -22%. Avon International also lost 36% of its active representatives in the seond quarter.

Natura &Co. LATAM composes of Latin American operations of the whole group, including Avon’s Latin American units. Within this, Natura was up 4.4% and Avon brand was down 35%.

Avon’s performances both in Latin America and in International units were tied to the impacts of lockdowns and the “cyber incident”. Management announced there were positive signs, though, in the third quarter.

Roberto Marques, Executive Chairman and CEO, commented, “Every brand and business in the group became truly omnichannel during the second quarter and given the circumstances, helped deliver a robust and competitive overall performance.”

For more on Natura &Co’s Q2 performance, please click here.

NU SKIN

Nu Skin reported $612 million sales in the second quarter. This is 2% less than its sales in Q2 of 2019 ($624 M). However, Nu Skin’s first quarter revenue was down 17%. So, this may indicate an improvement. Still, its global revenue growth as of mid-year is -9% compared to 2019.

Similar to the previous quarter, China contributed to this decline the most (-21%). China is Nu Skin’s biggest business unit. Its current share is 25% (down from 32% in mid-2019). Management was satisfied with China’s achievement in the second quarter saying it had performed close to where they had anticipated. At the beginning of the year, the anticipation was China to be down 20% to 25% and now Nu Skin expects it will be closer to 20%.

Hong Kong/Taiwan unit reported -15%, Southeast Asia -11%, and South Korea -9%. Positive performances were from Americas/Pacific (+38%), EMEA (+17%), and Japan (+5%). Management said growth in the last quarter was driven by the West, “where socially-enabled business is more broadly adopted”. Nu Skin had 51% customer growth in EMEA region led by the UK, Germany, Poland and South Africa. Company announced more than 85% of its global revenue was coming through digital transactions.

“Our business performed well above expectations in the second quarter of 2020 driven by our socially enabled business model, strategic investments in technology and manufacturing, and our balanced product portfolio,” commented Ritch Wood, CEO.

Nu Skin expects now to close this year with $2.37 to $2.45 billion revenue. Company’s guidance after the first quarter was $2.17 to $2.26 billion.

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

ORIFLAME

Oriflame’s sales further declined in the last quarter (-12% compared to 2019) after the first quarter (-2%). Company’s total revenue is 7% less so far this year.

All regions of Oriflame reported declining sales in Q2: Latin America -34%, Asia -20%, Turkey & Africa -10%, CIS -2%, Europe -1%:

OriflameOn the results, CEO Magnus Brännström said, “Despite a challenging start of the quarter, impacted by various lockdowns and difficulties to fulfil orders in several of our markets, we ended the quarter with local currency growth in June. The third quarter has started with around 10% local currency growth, implying that the reactivation initiatives taken during the spring have been effective and that our social selling platform is successful.” Oriflame reports that its supply was deeply impacted by the lockdowns in China, India and Italy.

In line with the general trend, company’s wellness product category was the best overall sales performer in the quarter, increasing its share to 18% from last year’s 13%.

As stated by the management, during the second quarter 97% of the Oriflame’s’ orders globally were placed online, of which 63% were from mobile devices. This is shown as a major factor behind reducing the negative impact on sales, when people stay at home due to the COVID-19.

For more on Oriflame’s Q2 performance, please click here.



TUPPERWARE

Tupperware has not seen a sales increase in a quarter compared with previous year since 2017. Company continued its downward trend in the second quarter of 2020.

Q2 sales was down 16% versus last year ($397 m vs. $475 m). South America contributed to this with -34%, Europe with -25%, Asia-Pacific with -14%, and finally, North America with -1%.  With this result, Tupperware’s mid-year revenue is 20% behind what it was in mid-2019.

Tupperware’s global active sales force also shrank in Q2 by 17%, declining to 467,000.

“In the second quarter we pivoted to a new way to lead the business, a new way to operate the company and embraced a new growth strategy. We are now increasing our efforts to contemporize Tupperware and become a global leader in sustainable consumer solutions while leveraging the consumer influence of our iconic brand,” commented Miguel Fernandez, CEO of Tupperware.

The management said Tupperware Board had approved a new growth strategy and they would share the full strategy later this year once they have “tangible accomplishments to point to”.

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

USANA

USANA reported $259 million in the second quarter. This represented 1% increase compared to previous year. Sales in Asia-Pacific region was up 2%, and in Americas-Europe Region it was down 2%. A large portion of USANA’s business is generated in Asia-Pacific. Markets in this region account for more than 80% of global sales. China alone produces about half of USANA’s revenue.

CEO Kevin Guest said, “We generated nearly 8% growth in active customers. We also continued to successfully execute a virtual sales and operating strategy to deliver our results. Finally, we offered several promotions and incentives during the quarter that benefited net sales and our overall results.”

As of mid-year, USANA’s revenue is flat versus 2019. After the second quarter, management increased its 2020 revenue outlook to $1.05 – $1.10 billion which if achieved, is in line with the sales in 2019.

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

There are reasons to be optimistic about the industry’s future. That’s for sure. We will see how the companies and the independent contractors will further adapt themselves to the changing conditions in the second half.

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Hakki OzmoraliHakki Ozmorali is the Principal of WDS Consultancy, a management consulting and online publishing firm in Canada, specialized in providing services to direct selling firms. WDS Consultancy is a Supplier Member of the Canada DSA. It is 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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Mixed Growth Performances in the First Quarter https://worldofdirectselling.com/mixed-growth-performances-in-q1/ https://worldofdirectselling.com/mixed-growth-performances-in-q1/#respond Mon, 18 May 2020 01:00:22 +0000 https://worldofdirectselling.com/?p=16442 Among the six major direct sellers reviewed here, four of them reported weakening sales. Given the circumstances we are all in globally, this was not surprising obviously. It was interesting though, the other two announced they had managed to grow. Let’s take a closer look at each of them: HERBALIFE Herbalife came up with a […]

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Among the six major direct sellers reviewed here, four of them reported weakening sales. Given the circumstances we are all in globally, this was not surprising obviously. It was interesting though, the other two announced they had managed to grow. Let’s take a closer look at each of them:

HERBALIFE

Herbalife came up with a solid 8% revenue growth in the first quarter, increasing its quarterly sales to $1,262 billion. Maybe the most striking performance was from its China region that posted 26% growth. Sales in Asia-Pacific increased by 12%, in North America 8%, and in EMEA 3%.

In the U.S., the first quarter and the month of March were Herbalife's Q1 2020 regional performances.all-time record highs for Herbalife.

Management said it owed the postive results in China to the strategy change the company made in this market after last year’s “100-day review of the health products industry”. Then, Herbalife had decided to be less reliant on large in-person meetings. And therefore, it created a robust e-commerce platform and moved many of the sales meetings online. Eventually, “this has proven to be extremely helpful during the pandemic”, Herbalife stated.

Despite the positive results in the first quarter, management announced the pandemic’s impact on the results in the second quarter and also on full year 2020. So, “the company would periodically reassess its ability to provide guidance for full year 2020 as and when the impact of the pandemic could be reasonably estimated”. In fact, Herbalife’s global growth was in a decline last April by nearly 1%. While China and the U.S. were up 20% and 14%, India and Brazil were down 30% and 31%, respectively.

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



NATURA &CO

As we all know by now, Natura had added Avon to its portfolio last year and Avon was included in Natura’s consolidated figures for the first time in Q1 2020. With the addition of Avon, Natura &Co became the leading beauty company in Latin America, with 11.8% market share, as reported by the management

Natura HeadquartersThe group’s consolidated revenue in Q1 2020 was R$7,518 b (approx. US$1.3 billion). This was up 2% versus prior year. Within this, Natura &Co Latam recorded 2% growth. The Body Shop’s revenue increase was 3% and Aesop’s 27%. Avon International, once again, reported a sales decline: -2%.

Although too early, Natura management has so far been satisfied with Avon’s results.  “The rapid progress in integration” has led the company to raise its total synergy target to US$300 million to US$400 million over the next four years. This total synergy target has four pillars: Sourcing, manufacturing and distributon, administrative and revenue.

“Natura &Co Latam” unit brings 55% of the group’s global business, Avon Internatioal 28%, and The Body Shop 11%.Roberto Marques, CEO of Natura &Co Aesop, the unit that announced the highest percentage-wise growth, contributes 5%. As a side note, Avon’s Latin America business is included in “Natura &Co Latam”, together with The Body Shop’s and Aesop’s LATAM units.

Roberto Marques, Chairman and CEO, declared: “The first quarter of 2020 is the first to include Avon in our scope. We are very pleased by the rapid progress that has been made in integrating the company. This is more notable in that we have achieved this in the midst of the unprecedented global health crisis caused by the spread of the Covid-19 pandemic, which impacted our Q1 performance. In the face of the pandemic, the Group took quick action to adapt to this crisis, with three key priorities: Care for our people, care for our communities and care for our company.”

For more on Natura & Co’s first quarter performance, please click here.

NU SKIN

Nu Skin reported 17% revenue decrease in the first quarter versus last year’s same period ($518 m vs. $624 m). Company’s all business units contributed to this decline, China being on top of the list (-34%). Then came EMEA (-15%), and Americas/Pacific (-14%).

While the business in China was considerably down over previous year, management said it performed slightly better than they had anticipated. On the other hand, while South Korea performed mostly in line with the company expectations in Q1, the anticipation is that the effects of COVID-19 to be more impactful in the second quarter. South Korea represents about 15% of Nu Skin’s global revenue.

Commenting on the results CEO Ritch Wood said, “Our first quarter results demonstrated continued stability in the Nu Skin business with strong customer activity. More than 80 percent of our revenue comes through our digital properties which have been enhanced by our strategic investments in technology infrastructure and digital tools. Additionally, our manufacturing and supply chain investments have enabled us to effectively manage inventory and fulfill customer orders worldwide through very challenging circumstances.”

During the earnings call with the investors, the company also announced its plan to launch a new digital tool called “VERA”. This tool is to leverage artificial intelligence and machine learning to provide personalized product recommendations.

Nu Skin expects $520 to $550 million revenue in the second quarter. For the whole of 2020, the expectation is $2.17 to $2.26 billion. This is significantly lower than its 2019 sales (was $2.420 b).

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

ORIFLAME

Oriflame reported 2% decline in its sales in the first quarter of 2020 as compared to last year (EUR 303 m vs. EUR 309 m).

The decrease in sales was mainly due to Asia and Europe offset by positive development in Latin America, Turkey & Africa and CIS. In fact, Asia (-13%), and Europe (-7%) were the two business units that came up with negative figures. Each of CIS (+11%), Latin America (+4%) and Asia & Africa (+4%) reported growth.

Oriflame’s independent consultants in the quarter remained almost stable at 2.8m (2.9m) on the field. Conpany’s unit sales decreased by 9% and the price/mix effect was positive 6%.

“During the quarter our ability to conduct physical meetings and conferences was affected and we also faced challenges in parts of the supply chain.Under these circumstances I am of course pleased that we today offer our Independent Beauty Consultants a modern way of social selling, with 96% of all orders being placed online. In addition, focusing on our strategic product categories has proven successful with wellness showing the largest sales increase in the quarter,” commented CEO Magnus Brannstrom. Wellness category deserved this special mention as its share showed a substantial increase last quarter: From 12% to 15%.

Besides 96% of the company’s global orders were online, during the first quarter mobile use was 79% (73%) of total sessions on Oriflame’s web sites and orders placed using mobile devices were 56% (47%). The total share of orders processed through the Oriflame app was 33%.

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

TUPPERWARE

Since 2013, Tupperware’ numbers have been in a downward trend. Looking back, this is quite a long time but until now, not much could have been changed. This eventually led to several changes at the top management which so far have not produced any substantial achievements. The most recent such appointment was Avon Italy General Manager Marco Brandolini’s to lead Tupperware EMEA.

At its peak, Tupperware’s annual sales was $2.672 B in 2013 and it came down to $1.798 B in 2019. In additon to this 30+% decline, management reported an additional sales decrease in the first quarter of 2020: -23% versus Q1 2019.

Tupperware shares were being traded at $67-68 at the end of 2013. This is now $2-3!

Obviously, the pandemic has only added to Tupperware’s existing problems. During the first quarter of 2020, the impact of COVID-19 on the company’s business was most pronounced in Europe and Asia Pacific, the management reported. Tupperware experienced partial or country-wide lockdowns in various markets in these regions, including China, France, Italy, and Philippines. That said, all regions contributed significantly to the sales decline as shown on the table to the right. Tupperware’s global active sales force was also down 15% in the first quarter.

Miguel Fernandez, President and CEO said, “Our top priorities are to protect the well-being of our employees and sales force, and to support our operations through the unprecedented challenges we face today.”

“Due to the material uncertainty of the duration and extent of the COVID-19 pandemic impact”, Tupperware management withdrew its full year 2020 outlook it had provided in February 2020.

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



USANA

As opposed to Tuppeware’s 23% revenue decline in Q1, USANA’s was more than acceptable, given the situation in the world: -2%.

The worst decrease was in China (-9%), Americas & Europe also reported a decline (-2%). Sales in North Asia grew by 23% and in Southeast Asia Pacific by 4%.

“Although COVID-19 in general, negatively impacted our business during the quarter, strong consumer demand for our high-quality, essential, health products and successful promotions helped us deliver operating results moderately ahead of our expectations. Importantly, our manufacturing facilities in the U.S. and China remain fully operational to date, and we have experienced no meaningful disruptions to our world-wide supply chain,” CEO Kevin Guest commented.

USANA 10 YearsUSANA had been in a very positive trend for several years until 2019 (it posted 11% revenue decline). Even with this, company’s 10-year compounded annual sales growth (CAGR) was 9%.

For 2020, USANA revised its revenue expectations to be between $1.00 – $1.08 billion (was $1.03 – $1.13 billion). This figure, if achieved, will be similar to company’s 2016 performance. As for the quarter we are in, management said the target was $250 million.

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

The general expectation is that things will be more difficult in the second quarter (and possibly, in the remaining of 2020). We will all see to what extent the industry will be able to adapt to the “new normal” and bounce back.

…..

Hakki OzmoraliHakki Ozmorali is the Principal of WDS Consultancy, a management consulting and online publishing firm in Canada, specialized in providing services to direct selling firms. WDS Consultancy is a Supplier Member of the Canada DSA. It is 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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