Doug Hekking: I would say that we also have a really strong management team there that we have a great deal of confidence in. And so it’s been a learning experience, just as we went into China, China is heavy, heavy effort market. India is going to be a heavy effort market, which we hope the rewards will be there to support that as well.
Linda Bolton Weiser: And do you think that you would look at another new market opening maybe in 2025? Or what would be your timing for that expansion further?
Jim Brown: Historically, when we go back, we used to open a market about over every year and a half. It’s more like two to two and a half years now. And it is a reflection of the efforts from that department and the company, right, with India being complex and literally, states in India can be bigger than some of our other markets, if we do them well. I doubt it would be that quick. But we do have an active team that’s looking and evaluating market after market and we will go into other markets in the future. This will be our 25th market. And we’ve gone into markets that welcome direct selling and have a large population, and we have a pool to get into it. It starts getting a little bit tougher after 2025 to find those markets.
But we have a list. We have a top five and we’ll evaluate and go into something in the future. My guess is it wouldn’t be in 2025 only because of the complexity and our efforts to push all the resources we can to have India start up strong and then continue to be a strong business.
Linda Bolton Weiser: Okay. Well thank you very much. And good luck with everything.
Jim Brown: Thank you.
Doug Hekking: Thanks Linda.
Operator: Our next question is from Doug Lane from Water Tower Research. Please go ahead.
Doug Lane: Yes. Hi, good morning everybody. Staying on India here, India has been terrifically successful for Herbalife as Linda mentioned. And in fact, India is more than twice as big as China as these days. How long do you think it will take internally from where you stand for India to be even as big as China for USANA?
Doug Hekking: I think the way we’re entering the market is quite a bit different. And we expect to go back and see progress, but I think it’s going to be a different start point. But I think we’re very optimistic about the market. We are opening in a different fashion just because some of the structure and regulatory framework there and very, very confident with the way we’re pursuing it, but it’s definitely going to be more of a methodical systematic build, and we hope it really build some momentum. Jim?
Jim Brown: Yes, just some more information. Just as to remember that we opened China in 2010 through an acquisition, a company called Baby Care that continues to operate there. That’s our arm in USANA. And what that did was it actually had a base to start with to grow off of, that was modest, but it was still there and increased the speed of growing of China. We don’t have that in India, even though we have a lot of interest. It’s all about how quickly it starts and how quickly those teams can grow their organizations and customers.
Doug Lane: Fair enough, that makes sense. And we’re talking about China. China continues to be under pressure. I think the WFDSA just came out with – their numbers in China was down again in 2022, it’s down 8%. It’s been down more than 40% since 2018, which is the recent peak. You might be doing a little bit better than that, but you are still probably down 30% or more since 2018. And you read about the geopolitical tensions there. Can you just update us on where you sit today on your outlook for China versus maybe five years ago when it seemed like an entirely different picture?
Doug Hekking: Yes, Doug, we got someone just who is incredibly qualified to answer that question in person. Brent can handle that. He has been so close to the market and manage the leadership team there, so we’ll let Brent kind of give his color on it.
Brent Neidig: Hey Doug.
Doug Lane: Hi.
Brent Neidig: Great question. I agree with you that China has had – it’s been a difficult operating environment, especially during the three years of COVID. But as we’ve taken a step back and looked at the market, we’re still incredibly confident in its long-term growth potential. We believe that the strategy we have in place is the right strategy, and it will offer us a growth opportunity next year and in the coming years ahead. So yes, the environment is tricky. It’s very challenging, just like India will be, but I believe we’ve shown through our history, we’ve been able to overcome those types of challenges, and we still believe that there is a long-term growth opportunity there. If you look at – there are some of our peers who are still growing within the direct selling space, and we believe that, that is very, very likely and possible for our future.
Doug Lane: Do you think the – I mean, you mentioned growth in 2024. I think you had a fairly decent local currency quarter here in third quarter of 2023, you sense that we’re near the bottom there?
Brent Neidig: Yes, that’s always difficult to know. Hindsight is always the best indicator there. But as we look at the current excitement and I mean, I was just there in August and earlier in the year as well. And we have a very dedicated sales force who is very optimistic on our future. And I am incredibly pleased with our leadership team that we have currently. It’s really the strongest leadership team that we’ve ever had. And the way that they’re leading and guiding our teams currently and our sales leaders is the right way. And I believe that it’s really going to propel us into the future. So like I said we won’t know for sure in terms of the bottom, but as I see our sequential growth or our year-over-year growth, I believe that we’re at a good point to start building from this space.
Doug Lane: Okay, thanks. That’s very helpful. Thank you.
Doug Hekking: Thanks Doug.
Operator: Our last question is from Ivan Feinseth from Tigress Financial Partners. Please go ahead.
Ivan Feinseth : Hi. Good morning. Thank you for taking my questions. So with the expected adoption of the GLP drugs and reducing people’s appetite, there is going to be a significant need to supplement nutrition and protein intake. What are your thoughts and how you’re going to potentially target that with specific products maybe for that market?
Doug Hekking: Yes. I especially kind of given the latest round of news in that area, I think, that’s a good observation, Ivan. I think it’s the same message that we’ve had, but I think, many who are pursuing that avenue to go back and lose weight. I think nutrition still remains a paramount concern and how they take care of themselves. And it really is kind of building a foundation help going forward. And I think that’s an important mindset. And I think it really becomes, as Jim said, if that story is the differentiation of reminding people how important nutrition is a part of their overall health.
Jim Brown: Yes. And given the size of our foods line, it’s not significant to our overall balance of products. But you are right, it’s an opportunity, and we need to take that and move forward with it. We just literally had that discussion the last couple of days with our Board who is in here. They were interested in our take. And I think it’s the same thing. Hopefully, those people will understand eating less and potentially the effects of it is a good reason to get better high-quality vitamins and nutrients into their system.
