Nu Skin Reports Lower Annual Sales, Provides Soft Outlook

In the fourth quarter, a series of new product launches was not enough to counter the effects of a stronger dollar and lackluster sales at Nu Skin Enterprises Inc. (NUS—NYSE).

The maker of anti-aging products and nutritional supplements reported fourth-quarter revenue of $572.2 million, cut 7 percent by currency fluctuations. Though up on a sequential basis, sales fell 6 percent year over year. Earnings were down 20 percent to 62 cents a share. Analysts had expected a better performance on both counts.

The company ran three of its signature limited-time offers in the quarter, featuring its anti-aging ageLOC Youth and ageLOC Me products. In the Americas and Japan, the results were positive, while a new promotion in South Korea fell flat, largely due to a 12-month product subscription commitment bundled into the offer.

On a regional basis quarterly results were mixed. Constant-dollar revenue improved 26 percent in the Americas. Besides breakeven results in North Asia, sales in all other regions were down from the prior year. In the company’s largest segment, Greater China, revenue dipped 5 percent on a constant-dollar basis.

For the full year, revenue totaled $2.25 billion, compared to $2.57 billion a year ago. Earnings fell 28 percent to $2.25 per share. The company continued its share buyback program, repurchasing more than 5 percent of outstanding shares in 2015.

“We enter 2016 with a calendar filled with significant product launches,” said President and CEO Truman Hunt. “In the Americas, Japan and South Asia, where we have executed well, these product launches have generated positive results. In South Korea and China, we are moderating our expectations based on the December launch of ageLOC Me in South Korea and economic uncertainty in China.”

In 2016, the company expects revenue in the range of $2.10 billion to $2.15 billion. Management said its operating margin for the year likely will be 10.5 percent to 11.0 percent, with earnings of $2.40 to $2.60 per share, coming in well below analysts’ forecasts of $3.09 per share.


Nu Skin Stock Falls as China Troubles Weaken Sales Forecast

Shares of Nu Skin Enterprises hit their lowest price in more than a year on Wednesday after the company slashed its revenue guidance due to foreign-currency issues and lackluster sales in its China region.

In a statement released ahead of Nu Skin’s 2015 Global Convention, management stated that third-quarter revenue will amount to roughly $573 million. The seller of skincare and nutrition products previously projected sales of as much as $620 million. Analysts had set more optimistic predictions, with an average estimate of $622.6 million. One contributor to the downgrade was the strengthening of the U.S. dollar, which created a foreign currency headwind and negatively impacted revenue by more than $60 million compared to the previous year.

After climbing 6.6 percent this year, Nu Skin stock fell as much as 26.9 percent on Wednesday before closing the day down 25.7 percent at $34.62. The company’s expected third-quarter results would represent a year-over-year decrease of approximately 10 percent. For the last quarter, Nu Skin reported revenue of $560 million.

The shortfall also stems from weak sales in China, which accounts for 32 percent of Nu Skin’s total revenue. Lower-than-expected sales of the brand’s new cosmetic oils were a major factor, and may reflect economic conditions in the wider Chinese market, Nu Skin CEO Truman Hunt said in a statement.

“Given the successful launch of ageLOC Youth in South Asia/Pacific, we look forward to the introduction of ageLOC Youth as well as ageLOC Me in most of our regions during the fourth quarter,” said Hunt. “We forecast year-over-year constant-currency revenue growth of between 7 and 10 percent in the fourth quarter.”

In September, Nu Skin promoted one of its Asia executives, Ryan Napierski, to lead the company’s global sales organization. Napierski spent the past eight years in the region, most recently serving as President of both Nu Skin Japan and Nu Skin North Asia. Before transferring to Asia, Napierski helped to advance the brand in Europe as Vice President of European Business Development.

Nu Skin will release its earnings results for the third quarter on Nov. 5.

Nu Skin Looks to China, New Products to Boost Earnings

Photo: Nu Skin’s corporate headquarters in Provo, Utah.

Despite weak first-quarter earnings, Nu Skin Enterprises Inc. is confident that its expanding China business and forthcoming product launches will pay off in the second half of 2015.

Quarterly revenue landed in the middle of the company’s guidance at $543.3 million, a 20 percent drop from $671.1 million a year ago. Excluding one-time costs, earnings were 72 cents a share. Analysts had estimated that earnings would reach 73 cents a share on revenue of $546.87 million.

Nu Skin’s active associate numbers continued to decline in all regions except South Asia/Pacific, where active associates increased 4.3 percent from the prior-year period. Greater China recorded the sharpest decline, down 23 percent from the first three quarters of 2014.

In its earnings call, Nu Skin disclosed that the Securities and Exchange Commission has opened a non-public investigation into a donation the company made in China in 2013. Executives said Nu Skin is cooperating with the investigation, but provided no further details.

President and CEO Truman Hunt said Nu Skin is working to expand its footprint in China despite regulatory challenges, including a review early last year that prompted Nu Skin to halt recruiting and resulted in fines for the company. Hunt noted Chinese officials have granted Nu Skin approval to operate its direct selling business in two new cities in Guangdong province.

The anti-aging brand is counting on new ageLOC offerings to drive constant-currency revenue growth in 2015. “Enthusiasm is building for our upcoming product launches that include ageLOC Youth, our most advanced anti-aging supplement, as well as ageLOC Me, an innovative anti-aging skincare system that enables consumers to personalize a daily regimen based on individual preferences and skincare needs,” said Hunt.

In July, the company will also roll out its Epoch essential oils line across the U.S. and Canada, where Nu Skin introduced the products in April through a limited offering. It will also introduce a sister line, ageLOC Essentials, to its Chinese customers.

Nu Skin reduced its revenue guidance for the full year by about 2 percent and said it expects earnings between $3.65 and $3.75 a share, compared to the $3.94 consensus from analysts.

90 Days of Direct Selling – Day 62


Nu Skin Enterprises Inc.

2013 Net Sales: $3.18 billion

Country: USA

Nu Skin demonstrates its tradition of innovation through its comprehensive anti-aging product portfolio, independent business opportunity and corporate social responsibility initiatives. The company’s scientific leadership in both skin care and nutrition has established it as a premier anti-aging company. The company’s anti-aging portfolio features the new ageLOC® line of products including the ageLOC® TR90™ weight management and body shaping system, ageLOC® R2 nutritional supplement and ageLOC® Transformation daily skin care system.


2012 Rank: 8
2012 Net Sales: $2.2 billion
Sales Method: Person-to-person
Compensation Structure: Multi-level
Products: Cosmetics, personal care, wellness
Markets: 53
Salespeople: 1.3 million
Employees: 1,200
Headquarters: Provo, Utah
Executive: Truman Hunt
Year Founded: 1984
Stock Symbol: NUS—NYSE

The $100 Million Growth Club

by Teresa Day

Click here to download this issue to your mobile device. Watch here for the print version to become available.

DSN Cover, July 2014

Several years ago, the staff at Direct Selling News began the research necessary to create an industry list that demonstrated the impact and contribution of direct selling companies worldwide. The DSN Global 100 list has become a respected ranking, and each year the research team increases its ability to gather the necessary and relevant information. This annual list creates an opportunity to understand the significance of our industry as a whole, and showcase companies above a certain revenue threshold, which marks them as significant contributors to local and global economies.

We have been very pleased to hear that “making the list” has become a goal for many company executives as they work through their strategic planning for growth. Though the Global 100 list only presents 100 companies, we recognize that there are hundreds of smaller companies all working within our industry that offer excellent products and services, and serve both the needs and dreams of customers and representatives alike. We celebrate and salute them all!

While at work on the 2014 list (which is based on 2013 revenues), the DSN research team recognized a remarkable pattern emerging among a significant number of companies—18 companies, to be exact. These 18 companies achieved such a remarkable milestone during their course of business in 2013 that we knew we had to write about it and share this achievement with you, our readers.

In fact, the achievement appears to be so rare in the general business world that there is actually little written about it anywhere, furthering our decision to bring the information forward. The achievement is this: Eighteen companies on the Global 100 list grew by over $100 million in one year.

While we were, at first, definitely impressed as we saw this pattern and thought about these 18 companies, it was in doing further research on the growth of companies in general that turned our admiration into downright astonishment, and ultimately, extreme pride in their achievements.

Very few companies in any industry ever achieve a growth level of $100 million or more, much less in a single year!

Here’s why: Very few companies in any industry ever achieve a growth level of $100 million or more, much less in a single year! With that knowledge we, of course, felt compelled to call out and celebrate this achievement, and further, discover what we could about how and why these companies could reach such a milestone.

However, before we move onto the commonalities of these companies, let’s point out a few pertinent differences. These companies range in age from 2 years old to over 50 years old in operating age. These companies sell vastly differing products, from jewelry to health and wellness and from energy and essential services to cosmetics and skin care. These companies operate in one market to dozens of markets. They are headquartered all over the U.S. and even the globe—Noevir in Japan, Vorwerk in Germany and Telecom Plus in the U.K. Maybe the most apparent and extreme difference in these companies is their size—companies that grew over $100 million ranged from those producing $24 million (Origami Owl) and $37 million (Plexus) in 2012 to five companies already in the billion-dollar range.

We point out all of these differences to emphasize that remarkable growth is possible, regardless of product offered, number of markets served and even company size. In other words, remarkable growth is not only the purview of an already giant, established company.

As we considered this growth number—the $100 million threshold—we found some very interesting commentary on the validity of this number measuring something important. Paul Kedrosky, Ph.D., a senior fellow at the Ewing Marion Kauffman Foundation, contributing editor with Bloomberg Television and founding partner at SK Ventures—an early-stage venture capitalist firm—has written about and studied this $100 million number in conjunction with business growth, and his thoughts on the subject are quite revealing.

In a report issued by the Ewing Marion Kauffman Foundation in May 2013, titled “The Constant: Companies that Matter,” Kedrosky writes, “There are few constants in entrepreneurship—perhaps none. That is why when something appears to be even semi-stable across meaningful periods, it is usually worth further investigation.” The “something” he is discussing in his paper is the question of how to measure a company “that matters.” In Kedrosky’s estimation, a company that can promptly go from founding to $100 million in revenue qualifies as a company that matters. Why? Because these companies impact the economy. Because these companies create jobs and wealth for stakeholders. But primarily because so few actually do it.

According to Kedrosky’s research, which is presented in this Kauffman Foundation short paper, there are roughly half a million (552,000) new “employer firms”—those that employ others as workers—opening in the U.S. each year, every year. Since 1980, the number of those firms that reach $100 million in revenue at some point has been pretty stable, and it’s a very small number—only between 125 and 250 firms out of the entire half a million.

Let’s break that number down into a percentage. If half a million employer firms are created every year, and at the high end, only 250 of them ever go on to achieve $100 million, that’s less than one-half of 1 percent. Supporting data from the U.S. Census Bureau shows that even during a six-year window, only 175 companies out of the half a million new ones every year ever achieve the $100 million mark. No wonder Kedrosky uses this achievement to qualify a company as one “that matters.”

This data says that ever reaching $100 million in annual revenue marks you as a company that matters; a company that has significant staying power; a company that puts you in the top quartile of companies within your industry, no matter what it is. But we feel that this stunning statistic makes our $100 Million Growth Club even more of an outstanding achievement for these companies, because not only have they achieved and exceeded a mark that less than one-half of 1 percent ever reach, but they have duplicated that effort in a one-year time frame! We again salute and celebrate these 18 companies for a truly remarkable achievement.

Of course, the natural next question is how on earth did they do it? So we took a hard look at this group of remarkable companies, and though they are incredibly diverse, we found that they did, in fact, have some best practices substantially in common.

  • They have tremendous focus on their brand and product.
  • They utilize tools for their salesforce.
  • They invest in customer acquisition.
  • They emphasize personal development in their culture.
  • They focus on developing strong leaders.

Focus on Product/Brand

Staying focused has the natural result of bringing things into alignment, and since you can’t be focused on multiple things at once (focus just doesn’t work that way), staying focused automatically generates simplicity.

Peter Drucker, hailed as the father of modern management, very precisely puts it this way: “There is nothing so useless as doing efficiently that which should not be done at all.” In addition to identifying what should be done, focus helps identify those things which should not be done.

Staying focused requires discipline and attention. It can be difficult; it can feel ”boring”; it can feel like putting a straitjacket on creativity; it can feel too simple; it can feel that opportunities are passing you by as you focus on one main thing; however, those companies that have been able to do this have reached this remarkable achievement. Their leaders would tell you that the benefits of the discipline far outweigh any opportunity that would have distracted you.

It Works! is one of the 18 companies in our $100 Million Growth Club, and CEO Mark Pentecost is one executive who set his sights on “making the Global 100 list” a couple of years ago. Prior to this decision, it’s important to note that It Works! had been a successful company for nine years, and had grown at a respectable rate each year to $45 million in 2011. Placed against the data presented in this article, It Works! had already achieved success. But Pentecost wanted more, and he knew that by creating a simple message and staying focused upon it, his team could achieve it.

Pentecost says, “I’ll never forget that day near the end of 2011 when I met with members of our team—both corporate and in the field—and we made one decision that will forever be a milestone in our company history. We set a goal to double the company in 2012. That was a big goal. That meant we would create over $100 million in sales in the next 12 months.”

With singular focus, the small, respectable company truly exploded into growth. In 2013, the company debuted on the Global 100 at No. 56 with 2012 revenue of $200 million. This year, it moved up to No. 26 with 2013 revenue of $456 million.

“Anyone can complicate things,” Pentecost says. “It takes genius to simplify it. We had one message from the top down, and we worked hard to stay focused. We said no to anything else that came up.”

Researcher and celebrated business author Jim Collins writes about the “Stop Doing” principle, something he learned from a grad school professor at Stanford and has applied ever since to his own thinking. He writes, “… the ‘stop doing’ list became an enduring cornerstone of my annual New Year’s resolutions—a mechanism for disciplined thought about how to allocate the most precious of all resources: time.” Collins also incorporated the Stop Doing List into his criteria of what makes a company great in his celebrated book Good to Great, giving examples of great leaders who were able to make big decisions about what to stop doing in order to achieve the greatness they were capable of.

“Anyone can complicate things. It takes genius to simplify it. We had one message from the top down, and we worked hard to stay focused. We said no to anything else that came up.”
—Mark Pentecost, CEO, It Works!

Nu Skin President and CEO Truman Hunt and his team utilized the “Stop Doing” principle when they scaled back their products and brands to one anti-aging line, AgeLoc. The focus has clearly paid off. It was however, a very big decision. Nu Skin had expanded its operations to include three distinct opportunities: Nu Skin products, Pharmanex and Big Planet. Different management teams ran each division, and they competed with one another. Hunt decided to focus the opportunity on one path.

Hunt says, “We took advantage of that moment in time to evaluate all business issues. There were no sacred cows, and it resulted in an overhaul of our organization and strategy. The process was not without pain, but it was also clearly a key point in the growth of our company.”

Two companies among the 18 are exceptional primarily because of their extreme focus on offering one product in one market. Interestingly, the two companies couldn’t be more different—one is skin care, and one is energy. Nerium achieved over $200 million in revenue in its second full year with only one product in one country. Ambit has been the fastest company to achieve the billion-dollar threshold—within seven years—in only 14 states in the U.S. with one product. Focus clearly has played a central role at both of these companies.

Tools for Salesforce Support

Applying disciplined focus to your product line and brand will only get you so far if you don’t also carry that focus into your field support and training. No matter what product or service is being sold, every sales field needs simplicity and clarity in order to achieve the kind of growth our 18 companies achieved. It’s important to remember that those entrepreneurial souls who are your brand ambassadors are also very creative. In the absence of simple, clear and duplicable tools and systems, creative salespeople tend to create their own processes and selling methods. While this may produce enormous success for one or two individuals, it does not translate across the field to everyone. In order to achieve uniform success across the entire salesforce—which is necessary to generate $100 million achievements—the field needs simple and duplicable systems.

In just two remarkable years, Nerium has developed an expert ability to provide its salesforce with simple and duplicable tools. By so doing, they have maintained incredible consistency for their independent representatives in the form of support tools, training materials and back-end support, enabling even brand-new IBOs with no experience the ability to set up shop quickly and dive right into their businesses.

Each new representative receives the same starter kit, which includes a DVD that trains the individual on company business practices, along with other standardized materials to get them and keep them on the right track. From their first day in business, each representative has access to online support tools that are personalized for them. Every representative has the same experience, and every customer has the same experience, enabling the company to present a uniform, and clearly successful, approach to the business.

With two decades’ worth of experience in creating back office systems for other direct selling companies, Randy Ray and Wendy Lewis were well-versed in tech support tools when they decided to launch Jeunesse, the anti-aging skincare company, which grew from $126 million to $267 million in 2013 (growth of $131 million) and was seated at No. 46 on the Global 100 list. Their prospecting system easily allows a distributor to share a video on any social media platform, and the viewer can immediately request a free sample (paying only shipping). The company’s extensive tools support allows a distributor to enter the business and share products from almost anywhere in the world.

Most, if not all of the 18 companies on our list use consistent and simple tools to support and train their sales field such as DVDs, magazines and brochures, mobile apps and websites. Herbalife’s President Dez Walsh told DSN that he believes the continued use of systemized training methods to support distributors is a primary reason for his company’s sustained growth.

Investment in Customer Acquisition

Though in our industry many distributors are also customers, a business can’t grow to the levels we are discussing without creating a strong customer base.

In looking at our 18 growth companies, we found they had various means of reaching new customers, including investing in technology and reaching out to Gen Y, expanding physically into new markets and territories, and reaching out to new customers through sports sponsorship programs.

In all customer acquisition strategies, it is imperative that the company follow the customer. A company can no longer insist that a customer follow them; the balance of power has shifted, and it is now necessary for the company to meet the customer where they want to be met, whether it’s on Facebook or literally in a new market.

For example, Vemma has developed a customer acquisition strategy targeted at the very tech-savvy 80 million Generation Y’ers, the oldest of whom are now in their mid-30s. According to a study produced by Oracle on Gen Y’ers’ banking habits, their annual spending next year is projected to be $2.45 trillion. They don’t read newspapers, they don’t pay attention to TV advertising and they pretty much disregard anything that isn’t digitally produced. Vemma has captured their hearts and minds by tailoring the message and the messenger to be exactly what they want. Once these young people got their own revolution going at Vemma (YPR—Young People Revolution), they propelled an already somewhat successful company onto the Global 100 list at No. 81 with $117 million in revenue; and then skyrocketed the company to No. 53 on this year’s list with over $100 million in growth.

When Herbalife came to understand in some of their markets that people don’t shop the way Americans do—by stocking a pantry and large refrigerator with days’ and days’ worth of food—they made an effort to understand what was happening, and why. As a result of understanding their customers’ habits, they created a daily consumption model that mirrored the way people actually behaved in those markets.

The daily consumption and nutrition club model has also revealed additional benefits for Herbalife that have aided in their sustained growth. A social aspect has developed around the clubs, producing more and more frequent customers; and customers go to the distributor—rather than the distributor going out to them—which creates great efficiencies for the distributor.

AdvoCare puts its brand in front of millions of fans of NASCAR racing, professional soccer, and both college and pro football through its sports sponsorship programs. AdvoCare is the first-ever jersey sponsor for the Major League Soccer team FC Dallas—prominently displaying the company logo at every match, including those broadcast on national television. Other sponsorships include the No. 6 AdvoCare Ford Mustang in the NASCAR Nationwide Series in 2014, driven by the youngest-ever winner of the Daytona 500, Trevor Bayne. Drew Brees, quarterback of the New Orleans Saints and MVP of the Pro Football World Championship Game, is AdvoCare’s official National Spokesperson and helps lead the AdvoCare marketing efforts.

Expansion of the customer base is a foundational practice of each of the 18 companies on our list, regardless of their product, markets or even methods.

Emphasis on Personal Development

Today, personal development is an integral component of most direct selling companies, and its roots can be traced way back to the inspirational and motivational leanings of David McConnell, Mary Kay Ash, Mary Crowley and others who forged our industry.

Including a personal development program for representatives actually provides the company with great benefits. Mary Crowley, Founder of Home Interiors & Gifts in 1957, said, “If you grow your people, you will grow your business.” Many executives can testify to the truth of this statement. The 18 companies on our extraordinary growth list all pay attention to the personal development and growth of their salesforce.

Giving your salesforce access to personal development materials can take many forms, including utilizing tools, speakers, systems and opportunities to create a culture based around personal growth and awareness. It’s a cultural mindset and requires investment—just as product development and marketing efforts require attention and investment. Access to personal development material should be a critical part of the new representative’s first experiences. This can be accomplished by including CDs, DVDs, reading material such as magazines, or access to subscription services for personal growth.

Personal development and culture development can also be facilitated by your event strategy. Great events on consistent rhythms create great cultures. Great companies have powerful cultures. In fact, it’s that unique culture of your company that attracts the people you want in your organization and keeps them there.

ACN’s large-scale quarterly events represent an essential component to the company’s success system, which is why event after event, year after year, IBOs turn out in droves for its events. Almost 20,000 of them from around the world flocked to ACN’s hometown of Charlotte, North Carolina, for the company’s International Training Event last September, and they continue to host sold-out events quarter after quarter.

“It’s not a coincidence that the top people in ACN never miss an event,” observes Greg Provenzano, President and Co-Founder. “We hold them quarterly and they truly provide the motivation and fuel our IBOs need to build their businesses. For a brand-new person, there is nothing quite as powerful as walking into an arena of 20,000 excited, supportive IBOs. It truly is the best way to be exposed to our opportunity and to see the big picture of ACN firsthand.”

Vemma and It Works! recently went from a one-event-a-year system to four events a year. Many of the other growth companies are having at least two events a year on a national basis, plus regional and leadership events. These companies are creating consistent local, regional and national rhythms with their events as they try to build their culture and build their companies. By staying in front of your people, you can keep them engaged, keep them motivated, keep them fired up, keep them going when they don’t feel like it. We all know great events and great rhythms build great cultures. They also create an emotional attachment between your salesforce and the company—and the salesforce among themselves.

Focus on Developing Strong Leaders

Great cultures also create great leaders. The 18 companies in the $100 Million Growth Club all adhere to one final best practice: They create positive environments where people, particularly women, have the ability to grow into strong leaders capable of successfully replicating their business opportunities through others.

That positivity derives from the shared belief that anyone has the potential to succeed in direct selling. Two of the Global 100’s top 10 companies—one a network marketing company and the other a party plan company—have proved over the last half-century that focusing on leadership skills strengthens not only the individual but the business itself.

The No. 1 direct seller in the world, Amway, was founded by Rich DeVos and Jay Van Andel with the core belief that people, not products, were the greatest resource. The company, which recorded $11.80 billion in net sales in 2013, embraces “diversity of opportunity” which, according to current Amway President Doug DeVos, “enables stronger global expansion and [helps] manage change and opportunity.”

Amway IBOs are provided with leadership skills training upon joining the company and as they climb through the different levels of the organization: Platinum, Ruby, Sapphire, Emerald, Diamond and Double Diamond. They are also provided with the assurance that leaders in their upline maintain the highest levels of honesty, integrity, responsibility and accountability. “They can count on these values to be placed front and center when it comes to ensuring products are safe, individuals are reliable, compensation is fair, training is effective, and support and guidance are readily available,” Doug DeVos states.

Mary Kay, which broke into the Global 100’s top five this year with $3.60 billion, has since its inception been an organization that has grown exponentially because of its development of female leadership. Of course, such skill training was of the utmost importance to its founder, Mary Kay Ash, who in a 1985 Inc. interview stated, “I feel like I’m doing something far more important than just selling cosmetics. I think we’re building lives.”

Today the company’s beauty consultants can count on leadership training as they progress from consultants to sales directors and national sales directors. “You cannot keep a determined person from success,” Mary Kay once exclaimed. “If you place stumbling blocks in her way, she will take them for steppingstones and will use them to climb to new heights.”

The Clues of Success

The 18 companies that achieved over $100 million in growth in a single year did something so remarkable that very little is written about it. We hope this brief article showcasing these companies and sharing some of their common strategies will inspire many more to focus on a similar achievement for themselves. These companies have not been successful by accident; they have left clues for everyone else to see and follow.

We expect that next year even more companies will achieve the remarkable milestone of growing $100 million or more!

The $100 Million Growth Club

Nu Skin’s $977M Growth Earns Special Bravo Growth Award Based on Revenue

by Barbara Seale

Photo above: Scott schwerdt, President of the Nu Skin Americas Region, accepts the Bravo Growth Award Based on Revenue from John Fleming.

Click here to order the June 2014 issue in which this article appeared or click here to download it to your mobile device.


• The BIG HISTORY of Direct Selling • 10 Things to Know • The List 
• Topping the Charts • Profiles • Celebration

• Leadership • Growth Based on Percentage • Growth Based on Revenue •Humanitarian

Nu Skin

When a young company grows by half its size in a single year, the industry salutes in appreciation. When the company is 30 years old, does business globally and increases revenue by 49 percent—$977 million in a single year—it’s jaw-dropping. But that’s exactly what Nu Skin did in 2013, catching the attention of Direct Selling News and earning it a special recognition, the Bravo Growth Award Based on Revenue.

The publicly traded company achieved record growth with 2013 revenue of $3.18 billion, earnings per share of $5.94, and growth in every region where it operates. Active distributors grew 41.1 percent. Nu Skin predicts the growth will continue, though likely not at the 2013 pace, and it already has. In its earnings report in March, the company continued its trend, reporting record revenue of $671.1 million, a 24 percent improvement over the prior-year period, noting that it will soon roll out its ageLOC® TR90™ weight-management system and will introduce the ageLOC Tru Face Essence Ultra skin care serum in the Greater China region.

Nu Skin Chief Financial Officer Ritch Wood attributed the phenomenal results to a series of initiatives the company has taken over the past few years that culminated in an outstanding 2013:

  • A business transformation project that focused three separate business opportunities into one and also condensed three management teams into one;
  • An innovative product launch process, which the company calls its Limited Time Offer. The LTO introduces a new product to distributors ahead of the official launch, allowing them to get personal experience with it, as well as to align their teams around the product;
  • Strong initial sales of its ageLOC® anti-aging products, in particular ageLOC® TR90™, a breakthrough weight-management and body shaping system, which it unveiled to sales leaders in May 2013;
  • Growth in every region, which includes 53 countries.

“We feel fortunate to be in a situation where many things came together,” Wood says. “It wasn’t really just last year. Most of the work happened over the last several years to create growth in 2013. We now have a product platform that has appeal to customers; we’ve done a lot of work in China to establish the foundation for that market to grow; we’ve created alignment with our sales leaders; and we have a team of employees who understand our vision since our business transformation project a few years ago. Last year it all came together nicely. Now we must take this base and continue to grow the business even more.”

Bravo Awards

Global Growth

Wood notes that Nu Skin revenues grew in every market. It earned impressive growth rates in China and Southeast Asia, but also in the Americas, where it grew 30 percent, and in Europe, an area where it grew 7 percent despite the region’s economic challenges.

“A lot of times it seems you have good growth in one or two regions but you have challenges in others. In 2013 every region grew,” he says.

Wood observed that growth in the Americas region sets the pace and expectation for foreign markets, and he credits the company’s global sales leaders for driving success worldwide.

“We have a group of leaders in the United States who we look to for global growth,” Wood says. “Our U.S. leaders are the founding leaders of the company, and they continue to be an important group that helps us build success around the world.” He adds, “Our success is only as good as their success.”

Nu Skin’s global growth has demanded physical growth, as well, and in the second half of the year the company opened its new Innovation Center and expanded U.S. headquarters in Provo, Utah, and this year opened the Greater China regional headquarters and Innovation Park in Shanghai. The expanded U.S. headquarters campus includes more than 300,000 total square feet and features five research lab areas, a state-of-the-art data center, environmentally friendly design, and modern office and meeting spaces. The heart of the Innovation Center is Nu Skin’s Center for Anti-Aging Research, which will be the company’s global center for innovation and scientific discovery.

“The more growth we have, the more good we can do. We’re as proud of what we accomplish with being a force for good as we are of our sales success.”
—Ritch Wood, Chief Financial Officer, Nu Skin

The Nu Skin Greater China Innovation Park is situated in the heart of Shanghai’s Comprehensive Industrial Development Zone and is the largest overseas investment project in the 30-year history of Nu Skin. Covering an area of over 38,000 square meters, the park is as large as six football fields. In an effort to protect the surrounding environment, the park was designed under the standard of U.S. Green Building Council LEED gold certification. It uses environmentally friendly building materials and includes green space covering more than 28 percent of the total area. The building also includes a lounge, fitness center, basketball court, and areas for other recreational activities, providing employees with a great work environment.

Nu Skin’s Innovation Center includes an atrium with this indoor fountain as a focal point, which was constructed from 26 tons of Virginia Mist stone.Nu Skin’s Innovation Center includes an atrium with this indoor fountain as a focal point, which was constructed from 26 tons of Virginia Mist stone.

Growing for Good

The company’s biannual global sales convention also broke records, attracting 15,000 attendees from more than 50 countries. A highlight of the global convention was the fundraising gala for the Nu Skin Force for Good Foundation, a nonprofit charity with a mission to improve the lives of children by offering hope for a life free from disease, illiteracy and poverty. Fundraising from the gala and convention reached more than $2.2 million in donations for the Foundation.

“The more growth we have, the more good we can do,” Wood says. “Our focus is to continue to make a difference in the world. We’re as proud of what we accomplish with being a force for good as we are of our sales success. We want to keep on changing people’s lives and having a positive influence in the world. We hope that everyone who touches our business—distributors, customers, employees, people who benefit from our foundation—is better for it.”

The Power of Alignment

by Dan Chard

In some ways, my life is a bit of a contradiction. In less time than I care to admit, my children will be grown and move away from home. And yet, I work for one of the direct selling industry’s largest anti-aging companies—a company focused on helping people to “live young.”

As a father of children who are now well on their journey to adulthood, one thing that I have learned to deal with is the day they start driving. When my oldest daughter was first beginning to drive, I was a bit apprehensive. But as I watched her learn and saw the joy it brought to her, I couldn’t help but think of my first driving experience—of my first car.

It was a 1979 Ford Fiesta, Sport Edition. To me it was the greatest car ever! And while it would never receive rave reviews for acceleration, car ownership meant freedom and fun.

I learned a few things from that first car. I learned to understand and appreciate the vast complexity of everything that must work together flawlessly to make every car run its best—everything that must be perfectly aligned.

I would like to offer up three specific points of alignment that can affect your car and your business, and what my first car—and my subsequent experiences—taught me about each of them.

With my first car I learned to understand and appreciate the vast complexity of everything that must work together flawlessly to make every car run its best—everything that must be perfectly aligned.

Lesson 1: To perform its best, every car needs a great driver.

When it comes to cars, or businesses, it all starts in the driver’s seat. When I first learned to drive, I was downright dangerous—as most 16-year-old drivers are. I was learning how everything worked, and I had to give a lot of thought to things that are now second nature to me. But as I gained experience, I got better and better. I learned to focus on the road and notice the potential hazards around me. I learned how my vehicle responded to my directions and made my decisions accordingly. And although my wife may tell you differently—and at the risk of sounding like Rain Man—I consider myself to be an excellent driver.

In the case of your business, you need an excellent driver. This represents your management team. The most effective management teams work together, providing clear business strategy, a focused message and coordinated timing to build continuous energy. In these efforts, experience and focus are key.

One example of a great driver is Truman Hunt, President and CEO of Nu Skin. I have worked with Truman for several years now as part of his executive team, and I have seen firsthand the influence he has had on the company at every level.

Millions of men and women across the country rely on our growth and progress to support their livelihoods.

In 2009 he articulated a new goal for Nu Skin—he called it Nu Skin 2.0—to help us achieve our vision of paying more to our distributors than any other direct selling company. There were specific revenue and sales compensation targets that Truman put forward. He then rallied the business behind this vision and has provided clear and unapologetic leadership as we have moved steadily toward our goal.

Similarly, your management team needs to provide clear direction, while giving room for innovative thought to help shape the future. These executives must be aligned in their strategy and ensure that they effectively communicate it throughout the employee organization. An “internal campaign” like this allows all company employees to speak with one voice, stand united with field leaders, measure success and achieve results.

Frequent and consistent communication with key management, your employee force and field leaders ensures that your whole team is driving for a common vision and reaching for common goals. This cannot happen when there are competing agendas or infighting in your management team or employee force.

If there is an issue that needs to be worked out, fix it. Your car will go as does its driver.

Lesson 2: Even a great driver is useless without a powerful engine.

But even the best driver means nothing without a finely tuned engine. I learned quickly that a small car with a less powerful motor was limited in what it could do. As much as I wanted my first car to be a Maserati, it simply wasn’t. It had limitations based on the size and power of its engine. It could only be propelled forward as fast as the engine would allow.

What propels your business? What is the engine of your success?

For Nu Skin, the engine of our success is best represented by our business opportunity and has always been, and always will be, powered by our distributors. This global family of sales leaders is made up of hundreds of thousands of individuals who work as a team to achieve amazing results. They are the pistons of our engine, creating perfectly timed explosions of growth as they capitalize on the opportunities provided by our product launches.

These opportunity renewal cycles, like a well-tuned engine, are timed to provide distributors with opportunities to leverage the fuel of new product launches to power their businesses as they seek out new customers and potential business partners. But keeping an engine running smoothly can be a difficult proposition. Constant adjustment is required.

With each new opportunity renewal cycle we learn new things and see new areas for improvement. Then, working in tandem with our employees and field sales leaders, we tune up the opportunity. We make adjustments to make something great even better. This assures that our sales leaders’ success engine is always ready to provide them with the best possible vehicle for success.

Lesson 3: The best car can only move if its wheels are properly aligned.

Finally, I learned that my car performed best when my wheels were aligned. My fuel economy was better. The handling was better and more responsive. And I felt more secure knowing that my car would respond better to my commands from the driver’s seat.

The wheels are literally where the rubber hits the road and where execution becomes key. The driver and engine are working together, feeding power to the wheels, which in turn provide forward momentum.

In high school I learned about the principle of momentum in physics class with a simple equation: momentum = mass x velocity. This principle works well, whether you’re explaining the momentum of an object or a business. In our case at Nu Skin, we require a critical mass of sales leaders all pulling in the same direction, multiplied by the velocity of our products and opportunity to provide forward momentum to the business.

To this end, we have developed a five-stage alignment cycle that helps us in this process, carrying a consistent message throughout our entire sales organization—from our most influential sales leaders through to the newest distributor.

We work hard to ensure that we engage the hearts and minds of our distributors, empowering them with tools to help align, train and motivate their own sales organizations.

It begins with strategic meetings with key sales leaders. We plan together and develop messaging that will guide everything else we do regarding any new product launch. We then move in a disciplined way through the entire organization, communicating the same message to everyone. This ensures that each of our distributors is aligned with Nu Skin—and aligned with one another—creating global focus on common initiatives and exponentially moving the business forward.

But this kind of alignment doesn’t just happen. We work hard to ensure that we engage the hearts and minds of our distributors, empowering them with tools to help align, train and motivate their own sales organizations—enabling them to multiply and duplicate their success. Finally, we develop structured communications and sales events to further empower leaders and enhance their ability to mobilize their teams.

The Results

When each component comes together perfectly, the results can be tremendous!

In fact, for Nu Skin, the past three product launches have grown significantly—each new launch building on the success of the last. This kind of healthy growth can only be achieved through the power of alignment.

For example, when we introduced our first ageLOC product system—ageLOC Transformation—in 2009, we were excited when our efforts at alignment helped us to achieve a record convention product launch, which more than tripled our previous record. Taking what we learned from that and applying slight modifications for our next ageLOC launch in 2011 generated sales five times greater than what we accomplished in 2009. And with an upcoming launch scheduled for this year, we are looking at what we hope will be another record.

These are the fruits of alignment.

These are the lessons I learned from my first car. These are the lessons that we all must learn if we want to succeed in direct selling—or in any other business. Proper alignment is key. And although the road ahead will have its share of potholes and hazards, I am more confident than ever that our focus on continual alignment will enable us to navigate it successfully.

Dan Chard

Dan Chard is President of Sales and Operations at Nu Skin Enterprises.

Nu Skin Targets Asian Markets with Forthcoming Skincare Device

Nu Skin

Skincare and nutrition company Nu Skin, one of many brands expanding operations in China, will target the Chinese market and the wider Asia Pacific region with the imminent rollout of its new facial spa device. The company recently announced that the skincare device has received FDA approval for over-the-counter cosmetics use.

The demand for beauty devices has grown steadily for several years, with last year’s sales in the category increasing by approximately 22 percent. Nu Skin will make its offerings available in the North American and Asian markets in early 2014.

Read more on Nu Skin’s foray into beauty devices.

Skincare accounts for 70 percent of Nu Skin’s sales in Vietnam, where the company is looking to expand following strong growth during its first year in the market. The ageLoc anti-aging line accounts for 65 percent of sales in the skincare category.

In Vietnam, which comprises the 13th-largest population in the world, direct sales grew by 12 percent last year. Despite the country’s strict regulatory climate, Nu Skin expects to recruit approximately 30,000 members and generate sales of nearly $15 million in 2013.

Read more on Nu Skin’s Vietnamese market outlook.

IBD Reports Beauty Industry Growth and Trends

Sales in the beauty and personal care industry totaled $68.7 billion in the U.S. and $433.4 billion globally in 2012. According to a Euromonitor International forecast, the U.S. industry will reach $81.7 billion by 2017, with 3 to 4 percent annual growth over the next five years.

Much of the industry’s growth is occurring in emerging markets. According to Proctor & Gamble’s 2012 annual report, the industry leader has seen its emerging markets average 14 percent annual growth over the past decade. That number will likely grow, as P&G estimates a 10 percent, or 700 million, increase in world population from 2010 to 2020—with 95 percent of that growth occurring in developing countries.

Investor’s Business Daily, which tracks 197 industries, reports 32 percent collective growth among its beauty and personal care group, ranking the industry among the 30 best gains so far this year.  Major drivers of that growth include two of the world’s largest direct sellers— cosmetics giant Avon and anti-aging and nutrition company Nu Skin.

Research by Connecticut-based Global Information identified Avon as one of the biggest players in the “cosmeceuticals” sector. Avon launched 15 new beauty products last year and has experienced a 56 percent stock gain thus far in 2013. Cosmeceuticals, which combine cosmetics and pharmaceuticals to formulate multi-tasking products, generated approximately $30.5 billion worldwide in 2011. It currently represents the industry’s fastest-growing niche, on track to grow nearly 8 percent annually between 2012 and 2016.

Nu Skin saw Q1 sales rise 88 percent year-over-year in China, where the company plans to triple its stores and sales support centers by 2017. By contrast, Nu Skin’s Q1 product sales dropped 3 percent in Europe and rose just 7 percent in the U.S.

Nu Skin generated $840 million in sales last year with its ageLOC line of anti-aging products, and the company hopes to build upon its growth in Asia with this year’s weight-control system launch. According to Deutsche Bank research analysts, the weight management category in the region has experienced almost 11 percent growth over the last five years, and they estimate that in the next five years that number will increase at a 7 percent CAGR (compounded annual growth rate).

“Globally, weight management across channels is a $13.3 billion industry while consumer health care direct selling is a $22 billion market, further highlighting the opportunity if Nu Skin can get its fair share of either pie,” the report said.

Read IBD’s full industry snapshot for wider beauty trends and outlooks.

Nu Skin Grows 27% in Thailand

Nu Skin

According to the Bangkok Post, sales of Nu Skin Enterprises (Thailand) Co Ltd, the direct sales skincare company, grew by 27 percent year-on-year in the first eight months to 2 billion baht. The growth rate, almost four times the industry’s, was driven by the new AgeLoc anti-aging product line.

Pakapun Leevutinun, the president of Nu Skin’s Thai and Vietnamese operations reported that “sales of AgeLoc products topped 450 million baht in August alone, the highest monthly sales for Nu Skin since it set foot in Thailand 15 years ago.”

Riding on the trend, Nu Skin will introduce the new AgeLoc R2 food supplement line next year. It is also developing its information technology system for greater efficiency in online ordering, part of measures aimed at enabling the salesforce to continue business in the event of unforeseeable incidents such as last year’s floods. At the same time, the company plans to add small distribution centers nationwide for improved logistics.

The entire Bangkok Post report can be found on the publication website here.