NU SKIN

Nu Skin came up with $531 million quarterly and $2.208 million annual sales. As compared to previous year, these figures were down 7% and down 2%, respectively. 2016 was also Nu Skin’s third year in a row with a negative sales performance.

The only positive growth performance came from Nu Skin’s smallest region, EMEA in the last quarter (+21%). All of the remaining four regions reported revenue decreases: Americas -25%, China -7%, South Asia-Pacific -6%, and North Asia -4%.

“The fourth quarter of 2016 showed a decline against 2015 due to approximately $50 million of product launch revenue in the fourth quarter of 2015,” said CEO Truman Hunt. “Revenue in the fourth quarter of 2016 was also negatively impacted by $7 million of deferred revenue, primarily from a stronger-than-anticipated response to a promotion of ageLOC Me cartridges in China where orders outstripped our supply.”

The company had previously announced management transition. This time an update came saying in the next few weeks, a new chief financial officer was expected to be named. At that time, Truman Hunt will become vice chairman of the board, and Ritch Wood will assume the position of CEO, and Ryan Napierski will become the company’s president.

For the first quarter of 2017, Nu Skin anticipates revenue of $480-$500 million, and for 2017, revenue of $2.26-$2.30 billion. Both targets are slightly above company’s 2016 figures.

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

ORIFLAME

In 2016’s last quarter, Oriflame increased its sales by 5% to €355. Oriflame’s 2016 sales was up 3%, too, reaching €1.249B.

The company has been posting negative growth every year since 2011. So, 2016 might be marking a reverse in this negative trend. However, Oriflame’s 2016 revenue figure is still far from what it was in 2011 or 2012 (approx. €1.5B).

CEO Magnus Brannstrom said, “2016 was a year when we made significant steps to improve the overall position of Oriflame… It was a year when we returned to Euro growth, delivered double-digit local currency growth and increased the profitability each consecutive quarter – despite challenging market conditions and deteriorating macro.”

In 4Q, Oriflame’s unit sales decreased by 4% but the price/mix effect was up by 12%, pushing the revenue up.

Geographically, 4Q sales growth in Asia & Turkey was up 23%, in Latin America up 12%, in Europe & Africa down 2%, and in CIS region down 10%.

Oriflame celebrates its 50th anniversary this year, a remarkable milestone, of course.

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

TUPPERWARE

Tupperware reported $601 million sales in the fourth quarter, representing a 1.5% increase from last year.

However, this was not enough to compensate the revenue losses in the first three quarters. So, Tupperware’s yearly sales growth performance was -3% as compared to 2015. With 2016, Tupperware’s sales has been declining for the third consecutive year.

Last year, the company’s sales figures suffered the most in its “Beauty North America” segment (-21%). Then came Europe (-9%), and Asia-Pacific (-3%). South America made a positive contribution by 17% and Tupperware North America by 1%.

As of end-2016, Asia-Pacific was Tupperware’s largest business unit with a 34% share. Europe’s contribution was 25%, Tupperware North America’s, 16%, South America’s 16%, and Beauty North America’s 9%.

Rick Goings, Chairman and CEO, commented, “We experienced a challenging fourth quarter to cap off an already tough 2016… Despite the impact of further economic and political instabilities, our businesses in emerging markets continued on a growth trajectory in the fourth quarter with outstanding results in Argentina, Brazil, China and Tupperware South Africa.”

For 2017, management expects 0-2% sales increase in USD terms, globally. At the segment level, sales are expected to be down low-single digits in in Europe and Asia Pacific, about even in Tupperware North America, down mid-to-high teens in Beauty North America and up in South America by 22 to 24%.

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

AMWAY

This quarterly growth review has focused on the six largest public companies, since the beginning. This had two reasons: First, to give a general picture without boring the readers with so many companies’ figures; second, we only have access to public companies’ reports in detail.

As a private company, Amway has been reporting its yearly results regularly recently. So, we have been adding this giant’s figures to the year-end reviews, too.

Amway reported $8.8 billion sales in 2016. This meant 7% decline from 2015. Worse than that is, it also meant Amway was having declining sales in each of the last three years. Sales was $11.8B in 2013 when it peaked, then it went down to $10.8B in 2014, and to $9.5B in 2015. Even with this figure, Amway is still the world’s largest direct seller.

Chairman Steve Van Andel was not unhappy, though, saying, “Across the world, Amway did well in 2016. We experienced sales growth in several top markets, saw double-digit percentage growth in nine additional markets, and continued to evolve the business in China as we seek to take advantage of shifting market conditions and achieve the market’s long-term growth potential.”

Amway reported its sales by product category in 2016 as follows: Nutrition 49% (+3% from 2015); beauty and personal care 25% (same as 2015); durable products, 15% (-1% from 2015); home care 7% (same as 2015); other, 4%(-2% from 2015).

Company’s top 10 markets in 2016 were: China, United States, South Korea, Japan, Thailand, Taiwan, India, Malaysia, Russia and Hong Kong. Amway said it enjoyed increased sales in seven of these top 10 markets.

For more on Amway’s 2016 performance please click here.

We have only few weeks left until the end of the first quarter. Following that, we will be looking at these companies’ quarterly reports to see how they kicked-off 2017.

…..

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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The post 2016 Growth Performances of Companies – 2 appeared first on The World of Direct Selling.

The below table shows us that four companies have been doing better than last year. Avon and Tupperware on the other hand, generated less sales in Dollar terms as compared to 2015.

AVON

Avon’s sales in the third quarter was $1.4 billion, representing a 2% decline on year-over-year basis. Active representatives were relatively unchanged, and average order increased 4%

Among Avon’s four operational regions, only South Latin America reported a sales growth (2%). The other three regions’ performances were not so good: Asia-Pacific -9%, North Latin America -6%, and  Europe, Middle East & Africa -4%. South Latin America’s positive result is important for Avon as this is company’s largest geographical region, accounting for more than 40% of its global revenue. Within this region, Brazil achieved a 14% sales increase in the third quarter.

Having been disappointed with the performances of the Asia Pacific region, Avon placed it under the management of John Higson, who had been leading other geographic segments. Asia Pacific is currently Avon’s smallest segment but the management says it believes it has “strong potential over time”.

Commenting on the third quarter results, CEO Sheri McCoy said, “I’m pleased with Avon’s third quarter results, as they were generally consistent with our expectations. Similar to last quarter, our performance improvements were broad-based, with 8 of our top 10 markets growing in local currency, with particularly strong performance from Brazil and Mexico.”

With these results, Avon’s nine-month sales figure is 9% below last year’s.

As we all know by now, Avon is in the process of moving its global headquarters from New York to London, U.K. It has been announced that a small corporate office was opened in West London. Also, the relocation of U.S.-based Avon employees from the Manhattan building to Rye and Suffern, New York was completed.

For more on Avon’s Q3 performance, please click here.

HERBALIFE

Herbalife’s third quarter revenue of $1.1 billion was 2% higher than last year’s same period. EMEA contributed to this performance with a 11% growth, and North America with 10%. The worst performance came from South and Central America: -12%. Herbalife’s new members in the U.S. grew 7% in this last quarter versus last year. The management said this was extremely positive being a testament to the dedication of the distributors in the U.S. and their confidence in their ability to thrive under the FTC settlement announced in July.

Herbalife’s revenue performance after nine months is also +2% on a year-over-year basis.

Herbalife CEO Michael Johnson was satisfied with his company’s results:  “Quarter three was another strong quarter… Reported net sales grew 2% to $1.1 billion, it’s our third consecutive quarter of positive year-on-year reported net sales growth despite the challenging currency environment.”

An important news that was released from the Herbalife headquarters following the third quarter was about the CEO transition. Herbalife’s iconic CEO Johnson was leaving his post after 13 years, to Richard P. Goudis, company’s current Chief Operating Officer, effective June 2017. Michael Johnson would continue serving as the Executive Chairman. The management said they had been planning this process of transition over the past several years and had outlined a seamless transition plan.

For the whole year of 2016, Herbalife expects a sales increase between 1 to 2% as compared to 2015.

For more on Herbalife’s Q3 performance, please click here.

NATURA

Natura reported 5% sales decline in the last quarter. Natura owes the majority of its revenue to Brazil and the contraction here was even worse: -7% Despite this, Natura’s performance in the first three quarters combined, is still slightly better than 2015: +1%.

The management attributed the situation in Brazil to consumers’ intensified search for products with lower prices, especially in fragrances, body and face care, which are more sensitive to disposable income and account for about 60% of Natura’s revenue.

With the poor performance in its core market Brazil, and with the better results in its other markets at the same time, the share of Brazil market has been continuously diminishing. The shares are now: Brazil 72%, other markets 28%.

As of end-Q3, Natura had 1.8 million consultants on the field. 1.3 million of them were in Brazil and 500,000 in its international markets.

With regard to the development of new channels, company said its SOU line is already in 1,334 stores in the drugstore with positive results. Natura intends to expand its presence through this channel in 2017 as well. There are also four Natura-owned stores now again, with promising results. Natura Network, the online channel, continues to post double-digit sales growth and has currently 82,000 digital franchisees (was 54,000 in 3Q15).

In October 2016, Natura appointed a new CEO, Joao Paulo Ferreira. Ferreria has been with Natura since 2009 and his last position was the Vice President.

We have published an extensive review of Natura very recently. You might want to take a look here.

For more on Natura’s Q3 performance, please click here.

NU SKIN

Nu Skin’s third quarter global sales was $604 million, a 6% improvement over last year’s same period. Nu Skin’s North Asia region contributed with 24% growth, China with 15%, EMEA 5%, and Americas 1%. The only region that posted negative performance was  South Asia/Pacific (-35%). As more than 70% of Nu Skin’s revenue is being generated in North Asia and China, the results from these two regions obviously had a strong positive impact.

Nu Skin’s nine-month performance on the other hand, is no better than last year’s. 

“We are pleased that we exceeded guidance and posted year-over-year growth during the quarter,” commented Truman Hunt, company CEO.

During the investors’ call, Truman Hunt said they launched an air purifier in China, designed specifically for this market. The product is about $1,000 and the company expects to generate $15 million in sales in the last quarter in China from this product.

Nu Skin expects to close the year with $2.23 to $2.25 billion revenue, which is almost the same as its 2015 figure.

For more on Nu Skin’s Q3 performance, please click here.

ORIFLAME

Following the 3% revenue increase in the second quarter, Oriflame reported another 6% growth. Company’s third quarter sales was €279 million (approx. USD 260 million). Growth on the field was not that good, though. The number of its active consultants decreased by 5% to 2.6m.

Sales growth in this quarter came from Asia & Turkey (26%) and Latin America (16%) regions. Europe & Africa contracted by 1% and CIS (Armenia, Azerbaijan, Belarus, Georgia, Kazakhstan, Kyrgyzstan, Moldova, Mongolia, Russia, Ukraine) region by 13%.

CEO Magnus Brannstrom commented, “We are pleased to report yet another quarter of Euro and local currency growth with healthy improvements in profitability. The strong performance in Asia & Turkey and Latin America continued, while in the CIS the focus remains on returning to sustainable growth and improving margins.”

As of end-Q3 2016, Oriflame’s year-over-year revenue performance has been 2.5% above last year’s. However, the most recent news coming from the field was not good for Oriflame. Sales increase has considerably slowed down in Q4. It has so far been 7% in local currency, about half of what has been since the beginning of the year. This led to a fall in Oriflame’s shares by 15%, the biggest drop ever.

During the quarter, Oriflame entered a long term partnership with IBM to outsource its IT and financial operational services. Oriflame management expects this partnership to bring new levels of customer focus, productivity and automation to company’s technology and internal processes, covering the entire Oriflame group. The full implementation is planned to happen by the end of 2017 and is expected to provide Oriflame with annual savings of approximately €3 million.

For more on Oriflame’s Q3 performance, please click here.

TUPPERWARE

Tupperware reported $522 million sales last quarter which was the same quarterly figure of 2015 ($521 million). Tupperware’s nine-month sales performance is 5% worse than last year’s.

On the segment side, South America region reported 30% growth last quarter; Brazil shines with a 52% sales increase there. There was also a 30% increase in active sellers in Brazil. Tupperware North America posted 4% growth. The U.S. and Canada had 6% growth, whereas sales in Mexico was down 2%. The negative impacts came from Beauty North America (-19%), Europe (-10%) and Asia-Pacific (-1%) units.

Although not a very big business segment (has about 10% share), “Beauty North America” is still a headache to Tupperware. BeautiControl sales was down 24% and Fuller Mexico was down 18%.

CEO Rick Goings said during the investors’ call, “I don’t feel good about what we are seeing in BeautiControl. This just continues to be such a drag on our business. With lower productivity, the strategy has been to focus on skin care, which is the right thing to do, because consumers are more dedicated to their skin care brand than they are to cosmetics, particularly color. But it can hurt short-term productivity, and that’s what really caused it… In the third quarter, we named Rick Heath who really knows the business as Managing Director of BeautiControl… He’s been at BeautiControl before we sent him off on assignments around the world. So he has the credibility with the sales organization and to engage our career leaders.”

For the whole year of 2016, Tupperware expects 1% growth in global sales over 2015.

Segment expectations for this year are: South America up 16-17%, Tupperware North America up 2%, Asia-Pacific down 1%, Europe down 8%, and Beauty North America down 20%.

For more on Tupperware’s Q3 performance, please click here.

….

Like I said in the beginning, we have less than two months to go. Let’s see how these giants will close the year.

The post The Third Quarter in Numbers appeared first on The World of Direct Selling.

Following the end of the first quarter, the time has come to briefly review the performances of the largest direct sellers. Normally, this analysis has been covering Avon, Herbalife, Natura, Nu Skin, Oriflame and Tupperware. However, Oriflame’s report would come after mid-May so I have decided skip it this time.

Again, the focus in this review will be on these companies’ revenue growth performances. As you see below, Herbalife and Natura posted positive figures whereas Avon, Nu Skin and Tupperware’s growth figures were negative.

Avon

This was Avon’s first quarter after selling the North America business unit to Cerberus Capital. Even without this declining unit, Avon was not able to post growth. Although the company’s revenue performance was +2% in constant Dollars, it was down 16% in Dollars.

Sales decline occurred in all regions of Avon: South Latin America -28%, Asia Pacific -17%, North Latin America -11%, and Europe, Middle East & Africa -2%.

Avon lost on the field as well, its active sale force shrinking by 1% globally as compared to the same period of last year. The highest negative figure was from Asia Pacific in this: -10%. Asia Pacific region roughly accounts for 10% of Avon’s business.

During the earnings call, CEO Sheri McCoy said, “With the North America separation now complete, our organization is fully focused on executing against the transformation plan for our core business which has three components: driving costs out of the business; investing for growth; and improving our financial resilience.”

Avon previously has announced it would move its headquarters from the U.S. to the U.K. As a part of this plan, some of Avon’s employees will have to move to Sweden, and some to Poland and Brazil. Sheri McCoy said they were dispersing the staff in their New York office so a smaller number would actually move to the U.K.

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

Herbalife

Herbalife came up with a positive growth figure this time: 1% increase in sales as reported and 11% on constant currency basis, compared to the prior year period. This was the first rise after five quarters of decline.

The highest percentage contribution was from China region: 32%. It was followed by North America (9%), and EMEA (6%). Mexico (-11%) and South & Central America (-21%) reported declining sales. Over 20 of Herbalife’s markets had record quarterly volumes, as reported.

CEO Michael O. Johnson was happy with the results, saying, “We’re pleased to report a strong first quarter and a really good start to the year, carrying over the positive momentum we reported in the first quarter of 2015. We’re encouraged by the business performance.”

Herbalife said it expected between 0 to 3% sales increase in the second quarter, and a 1.5 to 4.5% increase for the whole year of 2016.

Herbalife has lately announced its talks with the Federal Trade Commission came to an “advanced stage”. FTC’s investigations were over whether it was operating as a pyramid scheme. The company’s expectation is that the settlement will include a payment of $200 million.

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

Natura

Brazilian cosmetics giant Natura’s quarterly revenue increase was 3%. Natura’s international operations maintained their robust results and posted a net revenue growth of 42% on year-over-year basis. With this, international markets now account for 34% of company’s total revenue (was 24% in Q1 of 2015).

Natura’s core market Brazil was again, a disappointment. Sales in this market decreased by 10% last quarter. Management blames Brazil’s “recessive scenario” for this. Natura’s share in this market was 11% as of end-2015 and was the second largest cosmetics brand.

As a part of company’s strategy to go “multi-channel”, Natura opened its first brick-and-mortar store in Sao Paulo, Brazil.

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

Nu Skin

Nu Skin reported $471.8 million sales in the first quarter, compared to $543.3 million in the prior-year period. This represented a 13% decline but management was happy with this result as company’s first quarter revenue was at the top-end of their guidance. Management said the negative impact of foreign exchange fluctuations was 5%.

Nu Skin’s field force also decreased in the first quarter. The decline in the number of “Actives” was 7%.

All five regions of Nu Skin reported decreases in sales: Americas 18%, Greater China 15%, North Asia 12%, South Asia/Pacific 10%, and EMEA 2%.

CFO Ritch Wood said, they expected a constant-currency revenue growth of 6-8% in the second quarter and raised the revenue guidance for the year to $2.16- $2.20 billion. This target is close to $2.247 billion that the company made last year but still considerably lower than its 2013 performance when Nu Skin’s sales peaked at $3.2 billion.

“As we’ve stated in the past, revenue growth in 2016 hinges largely on the success of these two product launches. Our management teams have been working hard to prepare for these launch events, and it take place primarily in the second and the fourth quarters of the year,” commented CEO Truman Hunt.

When asked about the direct selling industry in China, Truman Hunt said he expected China should surpass the U.S. in market size this year as direct selling has being going quite well in China following new regulations. He said Nu Skin was the 9^th or 10^th largest direct seller in China.

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

Tupperware

Tupperware’s sales was down 10% in US dollars, up 1% in local currency. While there was a 4% increase in the total sales force, active sales force declined by 2%. Tupperware’s North America unit posted a significant growth on the field last quarter: 8% in total and 10% in active sales force.

CEO Rick Goings stressed the strong performances in Argentina, Brazil, China, Tupperware Mexico and Tupperware U.S. and Canada. Tupperware U.S. and Canada sales was up 9%. Management said last year’s compensation plan change in Canada had helped.

Along with these, Tupperware’s two businesses in South Africa also posted impressive results in the first quarter: Tupperware South Africa sales was up 18% and Avroy Shlain was up 13%.

Revenue in company’s largest market Indonesia decreased by 8%. Mike Poteshman said, they expected to do better in Indonesia in the second quarter, but they had not given an outlook for the full year in this market. Tupperware achieved the most disappointing performance in Egypt and the Middle East with-67%.

For the whole year, Tupperware expects its USD sales growth will between -2% to 0% as compared to 2015.

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

The post The First Quarter in Giants’ Figures appeared first on The World of Direct Selling.