And so those products are coming out in Q3.
Chasen Bender: Got you. That’s really helpful color. And then if I can just sneak in one more. On the cost savings side, it seems like that’s one area where you’re making some really good progress. And I know you mentioned the SKU rationalization, but I was hoping you could expand on that and maybe contextualize and dimensionalize for us. The other areas where you’re seeing the biggest savings opportunities? And I guess related to that, again, you mentioned Rhyz is an area of focus, but perhaps expand on how you’re thinking about reinvestment and the level of reinvestment in the business as those savings are realized?
Ryan Napierski: Yes. So really two questions there that we’ll approach. Cost savings, SKU rationalization is really, really important, obviously, operating in nearly 50 countries around the globe, there — it’s fairly easy to get SKU proliferation. And so again, the same team, the global product team as they do this portfolio analysis. It’s going literally product bright products, SKU by SKU, market by market to determine which contributions are acceptable and which are not looking at R&D. And I should be clear on this. Our – because of this manufacturing entity and Steve Hatchett coming from that world, he has an extremely in-depth view on total cost of fulfillment going all the way to raw goods and leveraging manufacturing capabilities to span not only the new skin business but drive down raw materials across businesses.
And so this is a very comprehensive A to Z approach. A lot of the cost savings that were – you saw the gross margin improvement of 50 basis points. Most of that actually has – is coming through a more rigorous approach on discounts and promotions. And the SKU optimization will be future forward savings. And so I think it’s really important to note that the benefits on gross margin are related to SKU optimization, but those benefits, I think, are forthcoming at a better level as the SKU elimination then rolls through the actual purchasing cycle to inventory, if that makes sense. So we do see SKU reduction. Again, 25% to 30% is our focus, including adding new products in the affordable luxury space and the Mind 360 lines and then being very aggressive on ineffective or less effective discounts and promotions, which, by the way, don’t always work well for the sales force anyways, right?
If there’s too many promotions, they don’t know what to focus on. So that’s kind of cost-saving side. James, anything you would add to that?
James Thomas: I would – you touched on the one, Jason, for you. The savings from the SKU rationalization really is a forward savings because we’re trying to mitigate the offset of the inventory levels that we currently have on hand of those existing products and making sure that we have runway for those products. But as we work through them, that’s when we’ll start to see those additional savings, which we’re already starting to see in several of the products that have gone through in the quarter, but more savings to come out past – in through 2025.
Ryan Napierski: And I think on the Rhyz side, you had asked about what do we do with the savings? This is the – and this is probably James’ forte and how we scrutinize every dollar that we’re spending. And James always goes through the philosophy on cash management, but it’s the same for the reinvest in growth. So wherever we need to grow, that’s our top priority. Rhyz clearly, as we talk about additional infrastructure capability services to build out there. We’re clearly focusing on investment there. We continue to focus on product innovation. It’s the heart – the heart of the new skin core business. It’s also the heart of what we’re doing on Rhyz. It’s all around innovation and new technology. So a lot of the cost savings go back to that.
And then, of course, as we continue to be very focused on shareholder value, we recognize that the stock price has been challenged and pressured as earnings have come down. We’re very focused on returning to shareholders as we do in accordance as we invest in the business and make that happen. So James, any additional color you’d put on?
James Thomas: The only other addition that I would add to that, Ryan, is just international market expansion through – for the core to get the core gives, of course, some legs to respond in terms of where we’re currently at. That’s a big part of that go forward with the incentive programs that are in place.
Ryan Napierski: Yes. And Jason, I will tag on James’ point about India because I said that earlier, but truly, Nu Skin has always played in a premium and developed market arena, right? Our biggest markets tend to be those that are more developed economically. We are – as I said, we are putting intensive focus with our partners locally in India. We manage the Infosys, the deep partnership we have there we announced last quarter, further going there. They’re obviously digital experts in the field. We’re taking a very intentional approach there to be able to hit the right point in that market, which is grow, obviously, a very large market, 1.4 billion people, growing middle class, very astute, very educated, strong technology prowess.
And as we do that, we see those benefits going into developing markets where to date we haven’t been as successful. Latin America is a great case in point where there’s an enormous opportunity there in our core business, and we’ve yet to tap that. And so how do we expand there. Southeast Asia, when you look at Indonesia, Malaysia, when we look at East Europe, when we look at future Africa, Middle East, et cetera, there’s just a lot where we’ll be learning. So we see India as being a very much a learning opportunity for us. Of course, in the mid- to long term, this is something that we’re very focused on, but we’re doing the work now that we believe will benefit even in our current markets, developing markets. So yes, big investment there.
Chasen Bender: Got you. Really helpful color. Thanks so much, guys. I’ll pass it on from there.
Ryan Napierski: Thank you. Thanks, Jason.
Operator: Thank you. And as we move on to our next question. Our next question is going to come from the line of Sidney Wagner [ph] with Jefferies. Your line is open. Please go ahead.
