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Mary Kay Reveals Research on Skin Barrier Function and Facial Redness

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Mary Kay Inc. recently revealed the results of a study to improve skin barrier function and facial redness.

The study was shared at the Annual Meeting of the Dermatology Committee organized by the Chinese Association of Integrative Medicine. Mary Kay was also a sponsor of the event, which took place August 8-11 in Lanzhou, Gansu Province, China.

“Mary Kay scientists spend years doing skin research to develop solutions for real people, and real needs,” said Dr. Lucy Gildea, chief scientific officer at Mary Kay Inc. “Part of our commitment is to take an active role in the beauty and scientific communities through our participation in global dermatological conferences, where we can share and learn from other scientific experts to help us develop more effective and innovative products.”

Mary Kay China’s senior manager for Medical Affairs, Dr. Jenny Jiang, shared research results of strategies to improve the skin barrier function and facial redness. These findings may provide important insights to understanding sensitive skin. Attendees included the country’s top dermatologists and esteemed executives from cosmetic companies.

Mary Kay’s Research and Development team is comprised of distinguished scientists who hold doctorates and other advanced degrees across multiple disciplines: skin biology, cell biology, chemistry, biochemistry and more. The team is dedicated to conducting ongoing breakthrough research and sharing impactful findings related to skin health with the scientific and beauty communities at large.

Every year, Mary Kay conducts hundreds of thousands of scientific tests on products and ingredients to ensure the highest standards of safety, quality and performance. Mary Kay holds more than 1,500 patents for products, technologies and packaging designs in its global portfolio. Last year, the company opened a more than $100 million state-of-the-art manufacturing and R&D facility in Lewisville, Texas.

DSA of Canada Announces Academic Scholarship Recipients

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Seven students received an academic boost when the Direct Sellers Association of Canada (DSA) recently announced its scholarship winners for 2019.

This is the eighth year of the scholarships, which celebrate and contribute to the educational endeavors of both sales consultants and employees in the direct selling industry, as well as their families.

The DSA has awarded six $2,000 scholarships to both deserving children of active Independent Sales Consultants (ISCs) of DSA Member Companies and ISCs who themselves are students. The DSA has also awarded one scholarship of $2,000 to a deserving child of a DSA Member Company employee.

“On behalf of the DSA, we are thrilled to present scholarships to these outstanding students,” said Peter Maddox, DSA president. “We are honored to have the opportunity to give back through this scholarship program and to promote entrepreneurship in Canada.”

The seven recipients of the 2019 DSA Academic Scholarships are:

  • Katherine Hanlon-Wadman, Mary Kay, Memorial University of Newfoundland
  • Kaitlyn Skinner, Arbonne International Canada, University of Alberta
  • Jacqueline Sahagian, AVON Canada Inc., University of Toronto (Scarborough Campus)
  • Sofia Somani-Slater, Arbonne International Canada, University of Waterloo
  • Alana Madrid, Cutco/Vector Marketing, University of Calgary
  • Jaleen Koscielski, AVON Canada Inc., University of Waterloo
  • Tristan Rebello, Mary Kay, Ryerson University

Additionally, for the second year in a row, the DSA is awarding $1,000 grants to the academic institution of two of the scholarship recipients. Both Memorial University of Newfoundland and Ryerson University will receive the grants, as the DSA strives to promote the integrity, trust and transparency of direct selling, a business model that is underrepresented in education.

“We are very pleased to announce our 2019 scholarship recipients,” said Dave Lovegrove, chair of the Direct Selling Education Foundation of Canada (DSEF). “Each year, we are impressed by the caliber of entries received from individuals across Canada. This year’s recipients are a remarkable group of students with incredible potential. It is our pleasure to help them achieve their educational goals through this scholarship program.”

Grants for educational initiatives are made possible through support from the DSEF, a not-for-profit organization established by the Canadian DSA in 1994. DSEF promotes public awareness of the direct selling industry in Canada and serves the public interest through educational programs and research into direct sales and micro enterprise.

DSA’s 2020 Scholarship program will launch in March. More details can be found here.

Nature’s Sunshine Q2 2019 Net Sales Down Slightly

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Nature’s Sunshine Products, Inc. (NASDAQ: NATR) reported net sales of $90.7 million for the second quarter ended June 30, 2019.

The $90.7 million was a decrease of 0.6 percent from the second quarter of 2018 for the Lehi, Utah-based direct seller, a leading natural health and wellness company engaged in the manufacture and sale of nutritional and personal care products.

“We’re about three months into our transformation and are pleased with the progress we’re seeing,” said Terrence Moorehead, president and chief executive officer. “It’s still early, but the business is performing in line with expectations, delivering strong second quarter growth in net income and adjusted EBITDA, as a direct result of our strategic restructuring initiatives.”

According to Moorehead, net sales were relatively flat versus prior year despite double-digit growth in Europe and 4 percent plus growth in Asia, excluding impact of foreign currency. Continued softness in North America and the disruption of sales in China, from the government’s 100-Day review of the direct selling industry, were the key factors inhibiting top-line performance.

“To support top-line growth and drive market penetration, we recently launched a new regional leadership structure designed to build regional capabilities and intensify our consumer focus,” Moorehead said. “We’re also finalizing launch plans for our five growth strategies and will start phasing them in later this year. As a result, we believe we’re well positioned to drive improved performance and shareholder value for the year.”

For the first six months of 2019, the company  has reported net sales of $182.0 million, an increase of 1.9 percent compared to $178.6 million in the six months ended June 30, 2018.

To read the full Nature’s Sunshine Q2 2019 financial report, click here.

China’s 100-Day Action Continues to Impact Herbalife, Nu Skin, USANA

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When the WFDSA numbers came out in June, it showed that 46 percent of the global revenue for direct selling came from Asia/Pacific (32% North America, 21% Europe) with China its largest market making up the bulk of that number (nearly 40%).

In our July feature titled The China Conundrum, we discussed the possible impact China’s 100-day review of the health market would have on direct selling companies past the first quarter of 2019. With Q2 revenue numbers out for three companies it seems the 100-day action continues to negatively impact on these three U.S. direct sellers. This is also inopportune news—albeit temporary— for many nutrition-based direct selling companies looking to China for future growth opportunities.

Although optimism was high at the end of the first quarter that business would return to normal following the review period that ended in April, sales in China have decreased dramatically in the second quarter, resulting in Herbalife Nutrition, Nu Skin and USANA resetting expectations for the second half of 2019.

The inability to regain momentum, as well as the negative media attacks on the direct selling channel, pose serious challenges for these three U.S. global direct sellers in particular: China represents 20 percent of Herbalife’s global business, one-third of Nu Skin’s and one-half of USANA’s. Executives are looking for ways to recapture growth, although industry analysts suggest that a return to normal business activities may take more time than previously anticipated.

Herbalife Nutrition

Herbalife has been cautious in its financial outlook since the end of last year when high-profile incidents in China involving direct selling companies led to public outcry and in January, a government initiated 100-day review of the health market.

“Herbalife was the first company to flag the 100-day review period as an issue when they reported fourth-quarter results back in February,” said securities analyst Douglas Lane of Lane Research. “Then when they reported first quarter results, they were quick to point out that it was going to take a while to reaccelerate.”

…following the review period that ended in April, sales in China have decreased dramatically in the second quarter, resulting in Herbalife Nutrition, Nu Skin and USANA resetting expectations for the second half of 2019.

For the second quarter, Herbalife reported net sales in China of $187 million, a decrease of 34.8 percent from the second quarter in 2018. In the first quarter, net sales were down 25 percent.

In the company’s August 1 investor call, Alex Amezquita, Herbalife Nutrition’s Senior Vice President of Finance, Strategy and Investor Relations, said the 100-day action’s impact on business stemmed from the inability to hold standard business meetings and “that nutrition club operators faced increased scrutiny that created an overall hesitation in their activities.”

Michael Johnson, Herbalife’s chairman and CEO, stated that executives recognize China is an issue and they have a plan in place to stimulate the Chinese market.

“First, we expanded our e-commerce platform late in the second quarter to give our China retail customers the ability to purchase products directly from the company,” said Johnson. “This is the first stage of a larger project we are working in partnership with $0.10. The full platform is expected to launch in the fourth quarter of this year.

“Second, we have improved the economics for our service providers with a focus on enhancing the profitability and activities of Nutrition Clubs,” continued Johnson. “And third, we are executing on our China Growth and Impact Investment Program with exciting branding opportunities, including our official nutrition sponsorship of the International Champions Cup.”

Although Herbalife started to see improvement toward the end of the second quarter and expects to see continued improvement in the back half of the year, it revised its full-year 2019 volume point guidance to a range of 0.5%–5.0% growth, net sales guidance to a range of (1.7%)–2.8%, as well as reported and adjusted diluted EPS guidance to a range of $2.11–$2.51 and $2.40–$2.80, respectively.

Nu Skin Enterprises

Nu Skin has had more of a rollercoaster ride during the first half of the year. When the red flag was raised that the 100-day action would negatively impact U.S. direct sellers, particularly those selling nutritional products, analysts anticipated seeing weaknesses in Nu Skin’s first-quarter numbers. Yet the company had a stellar performance, with 12 percent growth in Mainland China, which it attributed to a focus on personal care products.

Second quarter results were quite different. Mainland China sales totaled $185 million, down 24 percent from $245 million in the second quarter of 2018.

Ritch Wood, Nu Skin’s chief executive officer, stated that “second-quarter results were negatively impacted by limited sales meetings, media scrutiny and consumer sentiment in Mainland China in connection with the recently completed 100-day review of the nutrition and direct sales industries.”

While Wood said executives remain committed to their long-term growth strategy and are confident that they are moving in the right direction, the company adjusted guidance for the year primarily due to a reduced revenue outlook in Mainland China.

“The clear theme is that this is going to take a while,” said Lane. “I get the sense from the conference calls and narratives that these companies are starting to head in the right direction.” – Douglas Lane, Securities Analyst, Lane Research

“Consistent with the guidance provided on July 16, we anticipate annual revenue in the $2.48 to $2.52 billion range, with an approximate 3 to 4 percent unfavorable foreign currency impact, and earnings per share of $3.20 to $3.35,” said Mark Lawrence, chief financial officer. “For the third quarter, we project revenue of $595 to $615 million, with an approximate 2 percent negative foreign currency impact, and earnings per share of $0.74 to $0.81.”

USANA Health Sciences

In the first quarter of 2019, USANA saw net sales in Greater China decrease 8.7 percent. Executives expected to see a more typical consumer environment in China during the second quarter and anticipated that planned promotional activity would generate incremental sales and customer growth in the region.

However, the market did not rebound as expected. USANA’s second quarter results saw an even greater drop: sales decreased 23.2 percent to $129 million from $168 million in the second quarter of 2018.

“The continuing challenging market environment in China was the major factor that impacted our second quarter results,” said Kevin Guest, USANA’s chief executive officer. “During the second quarter, we offered promotions and incentives in China that have historically generated meaningful sales and customer growth. However, the contribution of these promotions was significantly lower than we anticipated, which we believe is due to the low consumer sentiment toward health products in China.”

Guest stated that the company believes it could take several months for consumer sentiment and momentum to improve in China, but that the company remains optimistic in the long-term growth potential in what is a very important market.

USANA plans to introduce new products and offer additional incentives and promotions to customers and Associates during the second half of the year. “For example, in China we will offer a product-focused promotion and a separate business incentive during the third quarter,” said Guest. “This will be followed by the introduction of new products at our China national meeting in Macau during the fourth quarter, where we will again offer product promotions.”

Due  to the challenges in China, in July the company updated its fiscal year 2019 outlook, anticipating that full-year net sales will range between $1.02–$1.06 billion, compared with the previous guidance range of $1.21–$1.26 billion, and earnings per diluted share will range between $3.70–$4.10 per diluted share, compared with previous guidance range of $5.00–$5.35.

What’s Ahead

According to Lane, the geopolitical issues in China at the end of last year and the government’s 100-day action this past January caused the stocks in publicly traded direct sellers to react, especially those companies focusing on nutritional products. And although he has not heard of any fallout for Herbalife, Nu Skin or USANA, activity during the second quarter did not return to the normal course of fashion that was anticipated.

“The clear theme is that this is going to take a while,” said Lane. “I get the sense from the conference calls and narratives that these companies are starting to head in the right direction. We are looking for stabilization for the rest of this year and then we should see a resumption of growth in the early part of next year as the whole 100-day episode is further and further in the rear-view mirror.”

Facebook Influences Buying Decisions More Than 7 Other Social Media Platforms Combined

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People turn to Facebook more than any other social media platform to inform their buying decisions, suggests a new survey from The Manifest, a business news and how-to website.

This trend occurs even though anti-Facebook sentiment, such as the #DeleteFacebook movement, continues to gain momentum.

Consumers are more likely to make a purchase from a brand they follow on Facebook (52%), than on Instagram, YouTube, Pinterest, Twitter, LinkedIn, Snapchat, and Reddit combined (48%).

Some digital marketing experts attribute this to Facebook’s status as the largest social network to date and its targeting algorithm.

Graph – Most Influential Social Media Channels for Purchases

“Facebook is a legacy social media platform that many generations go to, and the formatting of posts probably attracts those with a higher intent to purchase because it tends to feature long-form content,” said Andrew Clark, marketing strategist at Duckpin, a digital marketing agency.

Social Media Influences People’s Buying Decisions

Social media makes it easy for people and businesses to communicate and presents businesses with the opportunity to establish authentic connections with consumers.

As a result, 67 percent of people have made a purchase after seeing an advertisement on social media.

“Social media makes people feel closer to a brand, and it makes people trust a brand,” said Scott Levy, CEO of Fuel Online, an SEO and digital marketing agency. “The whole idea is not to use social media as a selling platform but to provide value to people.”

Brands should cultivate a strong social media presence by creating advertisements and connecting with influencers. This can help them increase brand awareness and attract new customers.

People Interact with Brands on Social Media in a Variety Ways, and They Expect Brands to Interact Back

While social media can be a powerful marketing and sales tool, it can also be key to providing high-quality customer service, which is critical to building customer loyalty.

Graph – How People Interact with Brands on Social Media

Most consumers interact with brands on social media by liking brands’ posts (51%), which doesn’t warrant a response.

But responding to those that leave reviews (31%), mention brands on their own profile (22%), direct message brands (20%) and tweet at brands (18%) could result in loyal customers.

“As much as social media serves as a marketing tool, it also equally serves as a customer service tool,” said Melissa Orozco, CEO of Yulu Public Relations agency in New York City.

Social media is an invaluable customer service and marketing tool; however, experts urge businesses to think critically about the platform they choose and their target audience while planning their social media strategy.

The Manifest surveyed 537 U.S. social media users. Read the full survey report here.

Mannatech Net Sales Down 9.8% in Q2 2019

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Mannatech, Incorporated (NASDAQ: MTEX) announced net sales of $40.7 million for the second quarter ended June 30, 2019.

The $40.7 million was a decrease of $4.4 million, or 9.8 percent, as compared to $45.1 million in the second quarter of 2018. For the three months ended June 30, 2019, net sales declined 5.5 percent on a constant dollar basis as compared to the same period in 2018.

The approximate number of new and continuing active independent associates and preferred customers who purchased packs or products or paid associate fees during the twelve months ended June 30, 2019 and 2018 were approximately 175,000 and 202,000, respectively.

Recruitment of new independent associates and preferred customers decreased 5.9 percent during the three months ended June 30, 2019, as compared to the same period in 2018. The number of new independent associate and preferred customer positions held by individuals in the network for the three months ended June 30, 2019 was approximately 20,084, as compared to 21,353 for the same period in 2018.

To read the full Mannatech Q2 2019 financial report, click here.

Nu Skin Q2 Revenue Down 11%

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Nu Skin Enterprises, Inc. (NYSE: NUS) announced second-quarter 2019 results of $623.5 million, a decrease of 11 percent from $704.2 million in the second quarter of 2018.

“As previously announced, our second-quarter results were negatively impacted by limited sales meetings, media scrutiny and consumer sentiment in Mainland China in connection with the recently completed 100-day review of the nutrition and direct sales industries,” said Ritch Wood, chief executive officer. “Outside of Mainland China, most of our other markets performed in-line with expectations. Our customer numbers remained steady as we continued our customer-focused initiatives globally, while sales leaders declined 14 percent, primarily due to Mainland China.”

Regionally, results were (U.S. dollars in thousands):

  • Mainland China – $185,333, a decrease of 24%
  • Americas/Pacific – $92,841, a decrease of 11%
  • South Korea – $84,732, a decrease of 8%
  • Southeast Asia – $75,395, a decrease of 5%
  • Japan – $65,251, an increase of 2%
  • Hong Kong/Taiwan – $43,712, a decrease of 16%
  • EMEA – $43,400, a decrease of 1%

For the six months ended June 30, 2019, Nu Skin has revenue of $1.24 billion, down 6 percent from $1.32 billion in the first six months of 2018.

To read the full Nu Skin Q2 2019 financial report, click here.

NHT Global Q2 Revenue Down 54%

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Natural Health Trends Corp. (NHTC) announced revenue of $23.4 million for the second quarter ended June 30, 2019, a decrease of 54 percent from $50.9 million in Q2 2018.

The company did, however, see revenue increase 21 percent compared to $19.3 million in the first quarter of 2019.

“While we continued to face challenges in China that placed significant pressure on our top line, we were pleased with the high level of commitment shown by our members through the difficult operating environment,” said Chris Sharng, president of Natural Health Trends Corp.

Sharng noted that though the Chinese government’s 100-day campaign expired in late April, there has been no official conclusion to formally end the program.

“As such, we continued our voluntary suspension of member activities in China through the entirety of the second quarter as our cooperation with the Chinese government is a top priority,” Sharng said. “We continue to believe this proactive approach is the best way to position our company for longer-term success and support the actions taken by the Chinese government to protect Chinese consumers.”

For the year, NHTC’s revenue is $42.8 million, down 59 percent compared to $103.3 million in the first six months of 2018.

To see the full NHTC Q2 financial report, click here.

Stream Energy Closes Acquisition with NRG and Rebrands Direct Selling Business as Kynect

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Stream has completed the previously announced sale of its retail energy business to NRG Retail LLC.

The closing of the transaction between Stream, a leading direct selling company and marketer of energy and wireless services, and NRG Retail, a subsidiary of NRG Energy, Inc. (NYSE: NRG), follows the receipt of all required regulatory approvals.

Kynect will be the name and brand of the remaining business moving forward, which will market energy and wireless services through its independent sales organization and be the exclusive marketer to the Stream business acquired by NRG.

“It is exhilarating to see a new brand emerge that speaks perfectly to the heart of who we are and what we do,” said Rob Snyder, founder of Stream. “This firm was built on relationships, and forging meaningful connections continues to shape everything we do in our business. And importantly, we have a strong partner in NRG to provide energy services for hundreds of thousands of independent business owners and customers. We are entering an amazing new era for our sales associate community, and I am confident that our new brand identity and partnership will strengthen our business and propel us into the future.”

Hurdlr Acquires Direct Selling IBO App Deductr

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Hurdlr recently announced that it has acquired Deductr, the self-employed tax savings app for direct selling independent business owners (IBOs).

Hurdlr has already started rolling out its new Hurdlr Enterprise platform to direct selling companies. According to the company, within a few months the migration of existing Deductr clients to Hurdlr’s platform will be complete.

“Many industry leading clients are now taking note of the strategic value we’re delivering to them in better IBO retention and benefits,” said Kelly Thayer, head of direct sales for Deductr, and now Hurdlr.

Hurdlr, the business expense and mileage tracking app for independent contractors and business owners, marketed to Uber drivers and Airbnb hosts before expanding to real estate agents and now direct selling distributors.

“We’re helping top direct sales companies offer a benefit that helps their IBOs increase their own profits, which has led to retention and production gains for our clients,” said Raj Bhaskar, co-founder and CEO of Hurdlr. “It’s a win-win, and we’re excited to partner with more direct selling companies going forward.”

Scentsy: Thompsons to Share Co-CEO Duties; Dan Orchard Named President

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Scentsy announced that Heidi and Orville Thompson will share the title of co-CEO and Dan Orchard will be president, effective immediately.

Heidi Thompson previously served as president and Orchard was general manager of Emerging Markets for the Meridian, Idaho-based company.

According to the company, the Thompsons have been able to scale back their day-to-day involvement in many areas as Scentsy executives and their teams operate at a higher level and in a more integrated way than ever before. This has helped the Thompsons focus on long-term, high-level contributions that will help shape Scentsy’s future growth in the most meaningful ways.

“Since we started Scentsy 15 years ago, the two of us have worked side by side, leading the growth and development of the company while contributing our own strengths and passions,” said Heidi Thompson. “Despite having two different titles, we’ve always acted as co-CEOs. So, now we’re making it official.”

Orchard has been an integral part of Scentsy’s executive team for 10 years, engaging and interacting with Consultants in multiple roles and leading international expansion. He and his family currently live in Australia but will move back to the United States in the next few months so he can work from the home office in Meridian.

Avon Unveils New R&D Lab in Mexico

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Avon Products Inc. recently announced a new research and development lab in Mexico.

Operating as part of Avon’s global R&D network, the new lab at the Celaya plant in Mexico will allow the brand to maximize local innovation opportunities. According to the company, being closer to local consumers and trends as well as Avon’s local marketing and supply chain teams means opportunities can be responded to much faster, in a way that meets the needs of local consumers, driving business growth.

The new facility was visited by a group of prominent influencers and media who took a tour hosted by Josie Adams, vice president, R&D; Samantha Hernández, North Latin America (NoLA) marketing director; and Jaime Ornelas, director, Celeya plant. They saw how the lab will leverage Avon’s global R&D capabilities to develop customized locally relevant products fast. It’s expected that some locally led products could be brought to market in a matter of weeks.

“We are excited about the potential of this new facility to drive business growth in NoLA markets,” said Adams. “Trends move fast, and with an abundance of choice for consumers today, it’s important that we can deliver top quality innovation in the right timeframe to delight our millions-strong global network of Representatives and their customers.”