Nu Skin Enterprises, Inc.

Good day, thank you for standing by. Welcome to the Q1 2024 New Skin Enterprise Earnings Conference call. At this time, all participants are in the listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during this session, you'll need to press star 1-1 on your telephone. You will then hear an automated message advising you your hand is raised. To withdraw your question, please press star 1-1 again. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, Scott Pohn, Vice President, Vestor Relations. Please go ahead.

Thanks, Michelle, and good afternoon, everyone. Today on the call with me are Ryan Napierski, President and CEO, and James Thomas, CFO. On today's call, comments will be made that include some forward-looking statements. These statements involve risks and uncertainties, and actual results may differ materially from those discussed or anticipated. Please refer to today's earnings release and our SEC filings for a complete discussion of these risks. Also during the call, certain financial numbers may be discussed that differ from comparable numbers obtained in our financial statements. We believe these non-GAAP numbers assist in comparing -to-period results in a more consistent manner. Please refer to our investor website for any required reconciliation of non-GAAP numbers. And now I'd like to turn the call over to Ryan.

Thanks, Scott. Hello, everyone. Thanks for joining us today. Having just returned from our top sales leader alignment and activation all-in event in Abu Dhabi and Dubai, I'm eager to provide an update on the state of our business as we enter our 40-year anniversary, pursuing our mission of being a global force for good by empowering people to look, feel, and live better lives. I'll provide a performance summary for Q1, as well as a progress update on our ongoing enterprise transformation vision, strategy, and plans. Our results for the first quarter were in line with guidance. At a high level, our business is on track with established expectations, and we are maintaining our full-year outlook. Revenue for the quarter was in the middle of our guidance range, despite experiencing more FX pressure than we had anticipated. We were also pleased with our progress on expense reduction initiatives, which helped us deliver first-quarter non-GAAP earnings per share at the high end of our range. Our RISE business delivered another strong quarter with revenues up 57% to more than 62 million, led by both our Mavely Technology platform and Wasatch Manufacturing business. The revenue contribution from RISE accounted for approximately 15% of total enterprise revenue in the first quarter, and we continue to expect this segment to account for 20 to 25% of our overall mix by 2025. Looking at the performance of our core Nu Skin business, our new product innovations delivered solid results. Agelok Well Spa I.O. and Renew Spa I.O., the holistic wellness and beauty devices we launched recently, along with Agelok TR-ME, our personalized weight management system that also launched in 2023, contributed approximately 42 million to our Q1 revenue. Europe and Africa, there was a very favorable response to TR-ME during Q1. There were also positive trends in a handful of our Southeast Asia Pacific markets, and we were encouraged by continued improvements in our sales leader trend in mainland China, despite a generally tepid macroeconomic climate. In other regions, we continue to battle macroeconomic challenges, including heavy inflationary pressures on consumer spending for premium goods, which together with our aggressive price increases from a year ago, have hampered our customer and affiliate acquisition efforts. In the Americas region, our subscription business in North America continues to be pressured by these factors, and we're making some adjustments to our model in Latin America to counter macro forces, particularly in Argentina. In South Korea, consumer sentiment remains negative due to the housing market crisis, making it difficult to grow customers and build the channel. Consumer sentiment is also a factor in Japan, in addition to significant FX pressure on our results. So to combat these external factors, we are placing more emphasis on product innovation in the affordable luxury space, and we will be introducing several new products at our upcoming West and East live sales conferences in Q3, our first multi-market in-person event since COVID. Despite these headwinds, we remain committed to our long-term enterprise vision of transforming our core new skin business while building out Rise and our long-term beauty, wellness, and lifestyle ecosystem. As I mentioned earlier, we just returned from our meetings with our top leaders where there was a palpable level of energy and excitement about the future. We introduced our next major product innovation, Mind360, a new division targeted at the rapidly growing $10 billion cognitive health market. Mind360 takes a holistic approach to addressing the interrelated factors of stress, sleep, and cognitive performance that are impacting the wellbeing of consumers in today's busy world. We're excited to preview Mind360 at our upcoming live events in Q3 with planned introductions of Mind360 to follow towards the end of the year and into 2025. Channel activation within our core new skin business is a top priority for us, and we're pleased to announce the promotion of Justin Kiesel as our new president of global sales. Justin has been leading the work to expand our affiliate model across the Americas over the past several years. He has extensive sales leadership experience both at new skin and in prior roles and has demonstrated his commitment to our leader's success. Justin is spearheading our efforts to retool our entire global sales organization and bring a much more rigorous lens to the sales performance management and channel activation. To this end, we recently launched a new series of incentives including a new customer acquisition and leadership performance program to re-energize the field. We anticipate these new initiatives to take root through the remainder of this year. Also, let me quickly give an update on last quarter's announcement of our intent to enter India, one of the fastest growing direct selling markets in the world. We're taking a very new approach to this high potentially emerging market that will enable us to reach a much wider array of customers and entrepreneurs. Our product offering, business model and operational footprint will be synchronized to enable broader mid-market appeal. We are just beginning to activate our channel towards a targeted market opening in 2025 with a digital first approach that is more agile and will enable us to scale more quickly throughout the market. We see India and our emerging market business model as a gateway to many new markets in the future and anticipate these learnings will help us delve deeper into second and third tier markets within Latin America, Southeast Asia and China. Growing out and our rise business is a critical element of our overall enterprise vision as we seek to build out the world's leading beauty, wellness and lifestyle ecosystem. Over the past several years, we've constructed essential infrastructure consisting of manufacturing, technology and operations to support Newskins Core business while enabling other brands to grow. We are now applying this ecosystem to BeautyBio to enable it to scale and see additional opportunities to extend our comprehensive suite of services spanning product R&D, production, packaging, cutting edge technology and logistics to the indie beauty and wellness industry for influencers and creators. We see great potential for this influencer incubator over the mid to long term and we are well positioned to capitalize on these opportunities as we lean into the disruption of the beauty and wellness industry due to social influencers and indie brands. We are utilizing our capital to invest in additional manufacturing, services, capabilities and opportunities to enable future growth. So in summary, first quarter results were in line with guidance and we are maintaining our 2024 outlook. From a top line perspective, we are acutely focused on channel activation with new incentives and continue to lean into our product strategy including the upcoming launch of Mind360 as well as affordable luxury. We also continue to invest in our rise business to accelerate growth and further and transform our enterprise to leverage our competitive advantages within the beauty, wellness and lifestyle industries. Expense prudence remains a critical focus in 2024 and while we made significant progress on these initiatives during the first quarter, there are still opportunities to drive further efficiency including our skew optimization plan to eliminate 25 to 30% of our skews by the end of 2025. Despite the challenging conditions in many of our markets in the near to mid term, we remain focused on executing our long term vision of becoming the world's leading integrated beauty and wellness ecosystem. And with that, I'll turn the call over to James to cover the first quarter results in more detail along with our guidance. James.

Thank you Ryan and thanks to all of you for joining today. I'll provide a brief Q1 update and then speak to Q2 and 2024 guidance. For additional details, please visit our investor relations website. For the first quarter, we posted revenue of $417.3 million which was at the midpoint of our previous guidance range and included a negative foreign currency impact of .8% or $18.2 million which created more pressure from our initial guidance. Reported earnings landed near the top end of our guidance range at negative one cents or nine cents excluding restructuring charges. Our gross margin was .5% compared to .3% in the prior year quarter. Gross margin for the new skin core business improved 50 basis points to .9% compared to .4% in the prior year quarter due to our skew rationalization initiatives and targeted promotion mix. Selling expense as a percentage of revenue decreased to .8% compared to .1% in the prior year quarter. For the new skin core business, selling expense was .7% flat with the prior year. The lower overall gross margin and selling expense is due to growth in our rise segments which now accounts for 15% of our business. General and administrative expense declined $9.3 million year over year and as a percentage of revenue was .9% compared to 27.8%. The increased percentage can be attributed to lower quarterly revenue levels. As previously discussed, we've been strategically evaluating our new skin core business and better aligning our operating costs to be in line with revenue. In the first quarter, we incurred an additional $7.1 million restructuring charge and we will continue our cost efficiency plan through next quarter with an anticipated three to $8 million of restructuring charges. We continue to expect this cost efficiency plan to deliver annual savings of between 40 and 65 million before taxes. We will continue to seek business efficiencies in all areas and believe these actions will help us maximize cash flows, focus on improved margins and enhanced earnings per share going forward. Our operating margin for the quarter was .1% or .8% excluding restructuring charges compared to .3% or .4% excluding restructuring charges in the prior year. Our interest expense was $7.3 million for the quarter compared to $4.9 million in the prior year. The other income expense line reflects a $0.4 million expense compared to a $3.4 million gain in the prior year quarter. In the first quarter, our cash flow from operations rose to a positive $3.3 million driven by a concentrated effort on inventory management. In contrast with the $22.1 million cash outflow in the same period last year. Cash from operations is typically the lowest in the first quarter due to lower revenue levels in what is seasonally our slowest quarter. We paid $3 million in dividends and paid down our outstanding debt $20 million in the quarter. We did not repurchase any stock and have $162.4 million remaining on the current authorization. Our tax rate for the quarter was .4% or .5% excluding restructuring charges compared to 22%. For the second quarter, we anticipate an elevated tax rate in the range of 45% to 55% and anticipate a projected 2024 annual tax rate of 25% to 35%. This annual rate reflects an anticipated higher global effective tax rate primarily due to the expected geographical mix of earnings during the year and the rate impact from our stock awards in Q1. Shifting focus now to guidance. In light of the continued economic pressures, challenges associated with our transforming our business and increased volatility in foreign exchange rates, we are reiterating 2024 revenue in the 1.73 billion to 1.87 billion dollar range. We anticipate earnings per share of 77 cents to $1.16 or adjusted earnings of 95 cents to $1.35. Our guidance now assumes an increased foreign currency headwind of approximately two to 3%. We are projecting second quarter revenue of 420 million to 455 million assuming a foreign currency headwind of approximately three to 4% with reported earnings per share of one cent to 10 cents or 10 cents to 20 cents excluding restructuring charges. And with that operator, we'll now open the call up for questions.

Thank you. If you have a question at this time, please press star one one on your telephone and wait for your name to be announced. To withdraw your question, please press star one one again. One moment while we compile our Q&A roster. Our first question comes from the line of Jason Bender with Citi. Your line is open, please go ahead.

Great, thanks. Afternoon guys. I wanted to first ask about kind of expectations for the remainder of the year. Looking specifically at the implied year over year currency growth, kind of based on the midpoint of the two Q and the 2024 guidance, it seems to suggest that you guys are gonna go from down nine and a quarter in the first half to about minus three in the second half. And if I look at the sales leaders, the customer accounts and the affiliate numbers, even when adjusting for that change in qualification for affiliates, the trend looks like it's worsening. So the question is, what's really giving you confidence in that two second half improvement and maybe can you just dimensionalize any of the initiatives that you expect to contribute to that improvement?

Yeah, Jason, a great question and happy to drive into the high level side of that and then James, if he has any to add to it, that's great. So really, as I mentioned, we have our, as we came out of the top leader sales alignment event in Q2, really got clarity around channel activation plans and incentives built towards the channel, which is exactly what you're highlighting, concerns around those KPIs leading into Q3 when we have our live events. We're really looking at these activation incentives. We're looking at continued build of energy around India in open markets, to be clear, not in India itself, but in markets where we are open, where there are local Indian populations, or what we call India eligible populations. And then our new products hitting market in both Mine360 and affordable luxury, which are both priced and positioned to help combat the inflationary effects that have been had on kind of customer and affiliate acquisition growth. So we've really aligned with the sales force to kind of attack at that level, both at the channel activation level and ensuring that we have the product ammunition to strengthen that as well. So that's kind of what we're looking at. I'd also say with Rise, we continue to expect to see favorable improvements there as well. James, anything you'd add?

Yeah, I would just call out that similar to what you did in the channel activation that we see, that we launched at the Sales Leader event, coming on strong in the back half of the year, in combination with the product introductions. And then seasonally, Q3 and Q4 have been stronger on the back half of the year in the beauty and wellness industry overall. And so that's built into our forecast where we're still showing overall decline in Q3, but on the high end guiding towards year over year growth on the high currently.

Got it, that's helpful. And then just Ryan, staying on your commentary about affordable luxury innovation, I wanted to give you an opportunity to kind of expand and elaborate on that, perhaps address what categories and how quickly the products that you're bringing to market are actually going to hit. And I guess also more strategically, can you just give us an update on how you're thinking about the price architecture of the portfolio and whether this makes sense or whether it makes sense to expand the portfolio kind of more meaningfully into this affordable, mastiff level like you're doing now?

Yeah, no, exactly, right on point there. Maybe I'll start by describing the portfolio architecture, Chase, and then go to kind of what we see in the second half coming. We've really been looking at this for quite some time, obviously with inflation being pressuring consumers around the globe as we've seen it and the effects that that has on channel growth, because if you can't get customers, you can't grow the channel as a new business entrepreneur. And so we've really been looking at this, our global product team led by Steve Hatchet has put together a portfolio architecture that really helps us span better from the premium area, which is where we've always been focused from devices and premium goods down to this new tier, which kind of gets to that mastige or affordable luxury level. We actually, our research and development engine here at Newskin and with our manufacturing partners is very robust in this area. We manufacture for hundreds of brands. And so we're fairly familiar with the trends that are taking place, what is and isn't selling. And so with utilizing that kind of that expanded data and insights, we've looked at our second half portfolio. There are multiple product innovations that fit within that call it the affordable luxury range, which can range really from that 10 to $30 price point. And so we really are making an intentional effort to expand the portfolio as well as reduce skews. So that clearly means we're going after, as we said, that 25 to 30% of overall skews. A lot of that is eliminating products that are in that, the premium prestige levels that simply aren't selling with today's customers or selling at lower quantities and replacing those with the mastige or what we call affordable luxury. So that's kind of how we're approaching the portfolio side. It's a much more robust approach. We think it has much better appeal for the next three or four years. I mean, inflation, while that stabilized, clearly the pressure on the consumer wallet is still high. And so we need to play much better in that area. And that's what we're looking at. Now for second half, again, the good news is that from an R&D perspective, our teams have been cranking on product innovations and have dozens of products at any time that we're able to launch. The challenge is really getting alignment with our sales force so that when we launch a new product, it actually gets the right stage time that it needs for an understanding of how to sell it, the USPs, all of that. And so this is important for our live events in both East and West at those events where we'll have those opportunities to explain these products, how they work, why they work the way they work, what the quality rationale is, because clearly while we go to a more of a an affordable luxury level, we do not sacrifice on quality. We're taking more of an elements level approach to innovation rather than having comprehensive innovations that might do six or eight different customer benefits, really focusing on the one or two benefits that matter most so that we can sustain high quality, sustain innovation, but at a more targeted and price conscious level. And so those products are coming out in Q3.

Gotcha, that's really helpful, Coller. And then if I can just sneak in one more on the cost saving side, it seems like that's one area where you're making some really good progress. And I know you mentioned the skew 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 rise as 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.

Yeah, so really two questions there that we'll approach. Cost savings, skew rationalization is really, really important, obviously. Operating in nearly 50 countries around the globe, it's fairly easy to get skew proliferation. And so, again, the same team, the global product team as they do this portfolio analysis, it's going literally product by product, skew by skew, market by market, to determine which contributions are acceptable and which are not. Looking at R&D, and I should be clear on this, because of this manufacturing entity and Steve Hatchet 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 is coming through a more rigorous approach on discounts and promotions. And the skew 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 skew optimization, but those benefits I think are forthcoming at a better level as the skew elimination then rolls through the actual purchasing cycle to inventory, if that makes sense. So we do see skew reduction, again, 25 to 30% is our focus, including adding new products in the affordable luxury space and the Mine 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?

I would, you touched on the one, Jason, for you, the savings from the skew 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 in through 2025.

And I think on the rise side, you had asked about what do we do with the savings? This is the, and this is probably James's forte in how he scrutinizes every dollar that we're spending. James always goes through the philosophy on cash management, but it's the same for the evids, reinvest in growth. So wherever we need to grow, that's our top priority. Rise 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 of the new skin core business. It's also the heart of what we're doing on rise is 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 put on

investment? The only other addition that I would add to that Ryan is just international market expansion through India. Oh yeah, I'm sorry. We should have called that out. For the core to give the core 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.

Yeah, and Jason, I will tag on James's point about India, because I said that earlier, but truly Newskin has always played in a premium and developed market arena. 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 that 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 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 we'll be learning. So we see India as being 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 yeah, big investment there.

Gotcha, really helpful, Coller. Thanks so much, guys. I'll pass it on from there.

Thank you. Thanks, Jason.

Thank you. In one moment as we move on to our next question. Our next question is gonna come from the line of Sydney Wagner with Jeffries. Your line is open. Please go ahead.

Hi, this is Sydney on for Ashley. You noted macro pressure weighing on customer and affiliate growth, but also called out strengths in some of your higher price point connected products. Can you maybe just give more color on that dynamic and kind of what you're seeing in terms of macro related spending behavior from your consumers?

Yeah, it's a really interesting market, as you know, right? Luxury goods continue to move in certain regards and automobiles and bags, handbags and the like. Our connected device business continues to do well. It continues to be the number one cited social media, eyeball attraction on social media, obviously for the appeal of the Loomis Spa and now Renew Spa and the US Wells Spa. We get a lot of attraction to that and people really aspire to purchase those, but nobody can really deny, as we look around the globe, pressures in China, pressures in Korea, pressures in Japan, even in the US, as we see that real CPI, these reports that are coming out, no one can deny the inflation has been well beyond probably what's reported in some of these reports and we see that floating through our business as people have to make trade off decisions around utility bills versus the next new skin innovation. We're very focused on the affordable luxury place. We've also, by the way, built Mind360 to be very price conscious. I'm excited about that because these are innovations that are needed by the mass markets, the stress and the needs there at the customer level. We're being very intentional, we're being very deliberate. As we look out to the future, obviously inflation doesn't, increased prices generally don't roll off. You see very few companies that roll back pricing as like Walmart, for instance, try to do as a retailer. Most markets, once the pricing of raw goods is in this system, it typically is hard to pull back out. So it's really upon us to figure out how to innovate new solutions to market that fill the customer need at the right price point and so we see as our ability to impact consumers at a more price appropriate level with new product innovations, we see that alleviating and then at the macro level, obviously as wages increase over time, which we see that that's continuously going on, we see purchasing capabilities improving around the globe. So our approach right now, control what we can control, what we can control is product innovation and that's where we're focused on new products coming to market at the right price points to give consumers what they need and do it at a better level. All the while, I think devices will continue to be a strong appeal because people, the demand for those are high and the interest on social media continues to be very strong.

Ryan, I'd add, I was gonna say, I would just add one point to that on the devices. When we look in current quarter results, quarter over quarter, we went from devices made up 14% of our revenue to this quarter, 17% of our revenue. So continues to have strong demand for our devices and what we look forward to in the back half of the year is that in combination with affordable luxury, to Ryan's point of playing in both market spaces, we hope

to garner some traction through that. Thanks, Sydney. Thank you

and one moment as we move on to our next question. Our next question comes from the mind of Linda Bolton-Wiser with DA Davison, your line is open, please go ahead.

Yes, hi, so I was wondering if you could maybe remind us in terms of the beauty device business that you bought, the one that's distributed at retail, I think it's an Ulta, how is that informing your rest of your business, your core business? Like, I kind of need a refresher here on what your intent was, like is it to get the technology or the marketing know-how, just what was the intent there and how is that going, are you getting out of it what you wanted in terms of that acquisition? Thanks.

Yeah, great question, Linda, good to hear from you as well. Thanks for joining. Yeah, so BeautyBio is the name of the company that we acquired last year and we're now in our third quarter with the team, so we're still kind of learning and learning that business, it's a really interesting business for a lot of reasons. One, as you mentioned, they have unique IP that we don't have or patents that we didn't have previously and we continue to aspire to be the beauty device leader across the board, so we want that capability and that's great. They also have very good insight into the Omni approach, Jamie O'Banion and team are, they're a small and agile but well-informed team across the Omni space, which we believe is very helpful across the RISE ecosystem and so that's really helpful. And the third part of that, and maybe it's a subset of this, is it is an influencer-led brand, so Jamie herself, the brand was born out of kind of her own views of beauty and this, as you know, in the beauty and wellness space for the largest beauty companies is quite an interesting disruption of how influencers are disrupting these traditional beauty brands. We've often felt for a long time, if we could take the best of Nu Skin, which is a bunch of affiliates out there marketing beauty and wellness products and then find indie brands that are founded by influencers themselves to learn how to play across those worlds over time, I think it's the greatest opportunity in beauty and wellness period. So for us, BeautyBio, it's very much we're learning the business, we're learning a lot of things around Omni and the Ulta, the Sephora, relationships, other great retailer partners that are important. For me, the most important part of it is this influencer and creator disruption that's happening in beauty and leveraging the insights and the know-how there as we continue to build out this, I alluded to it or mentioned it in my comments, but this influencer incubator, we think this is a real opportunity for the midterm and I think beauty brands and wellness brands around the globe need to be paying very particular attention to the influencer segment and how do you help brands stand up in a very competitive red ocean space when they have a captured audience because they're an influencer themselves and all influencers looking to monetize those brands, how do you institutionalize a mechanism to do that? That's what we're calling the rise influencer incubator business.

Okay, and then I just had a question on the MIND360 product line, I guess I'm just wondering, I mean on your supplement side of your business, I believe you have products that are sort of addressing those needs, maybe I'm mistaken, but maybe you could describe like how this launch is different, does it put together several different products in a suite of products that people will buy or like are these actual in adjustable form products? Maybe just give a little more color on what they are.

You know, you hit the nail on the head Linda, in fact, by the way, I shouldn't mention anyone, if you are interested in attending our live event, again, it's a West live, so it's not our traditional global event because we have challenges with visas now post COVID, but it's a West live event and you're all welcome to come just contact Scott Pond and he can get you information and we'll certainly help out. The MIND360 itself, yes, very much what is different, we do have PharmaX R&D and PharmaX products that address specific concerns in the cognitive health, space, sleep, stress, et cetera. We've never had a holistic approach that really, an interrelated approach to developing this space and what we mean by that is if you think through the consumer lifestyle, a lack of sleep impacts stress levels, it impacts cognitive performance, memory, recognition, et cetera. So if you're not sleeping well, it has effects on your cognitive performance, if your cognitive performance isn't working well, it impacts your stress, which impacts your sleep. So these products have been developed in a holistic form so that they all interrelate and attack the broader lifestyle comprehensively. In terms of delivery form, we're pretty excited about that. They're taking multiple forms, so not only will they be in supplement form, but there will be gummies as part of this, which we know for the 20s and 30 year old segments are much more popular. We even have drinkable tea type mix-ins. So it's a pretty customized approach that we're taking. And the last thing I'll say about Mind360 is we're taking sustainability to the next level across our business with the packaging. We're taking a wholly new approach, packaging, much more sustainable, the imprint on the planet's going to be so much better with these products. And so we're excited about that approach as well.

Okay, thank you very much.

Thanks, Linda, appreciate it. It looks like we are through the questions, and I appreciate that additional, those questions are helpful for us as well to fine tune what we present on the call, so thank you for the questions. Let me just wrap up by saying that it's been interesting. I've been on this journey with Nu Skin now 29 years, but we've been in business for 40 years, and we've been in the business of being a global force for good by empowering people to look, feel, and live better lives. I can tell you coming out of Dubai with our sales leader team, the energy, I'm feeling a new sense of energy in the market. The macros are still not great, not favorable, but our sales force is very much aligned and committed to this vision or this mission of the company and our vision of becoming the world's leading beauty, wellness, and lifestyle ecosystem as we continue to evolve our Nu Skin core business and expand our capabilities through rise. We see the world coming together in this ecosystem to be much brighter, so I just appreciate your time and attention to Nu Skin, and we look forward to providing better and better results and greater shareholder value return as we realize the benefits of this vision. So thank you all, we look forward to updating you next month or next quarter on the call. Bye bye.

This concludes today's conference call. Thank you for participating. You may now disconnect.