USANA Health Sciences, Inc. Stock price
Is USANA Health Sciences, Inc. a Top Scorer Stock based on the Dividend, High-Growth-Investing or Leverman Strategy?
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Key metrics
📘 Market Capitalization
📈 What is it?
Market capitalization shows how much a company is currently worth on the stock market.
🧮 How is it calculated?
🏛️ Why is it important?
It helps classify companies by size (Large, Mid, Small Cap) and indicates their market presence and relative stability.
🧮 Calculation
🎯 What does this mean for investors?
- Large-cap companies tend to be more stable, often pay dividends, but may grow more slowly.
- Smaller firms may offer higher growth potential but come with more volatility.
- Market capitalization is a useful indicator of company size — but not a measure of whether a stock is undervalued or overvalued.
📘 Enterprise Value (EV)
📈 What is it?
Enterprise Value represents the total cost to acquire a company — including its debt and excluding its cash reserves.
🧮 How is it calculated?
(= Market Cap + Net Debt)
🏛️ Why is it important?
EV gives a more complete picture of a company's value than market cap alone and is used in key valuation ratios like EV/FCF or EV/Sales.
🧮 Calculation
🎯 What does this mean for investors?
- Enterprise Value shows the true cost of buying a company, including all financial obligations.
- It is more accurate than just looking at market cap, especially when comparing companies with different levels of debt or cash.
- Professional investors prefer EV-based multiples because they better reflect the company’s full financial footprint.
📘 Net Debt
📈 What is it?
Net Debt shows how much debt remains after subtracting a company’s available cash reserves.
🧮 How is it calculated?
🏛️ Why is it important?
It indicates how dependent a company is on borrowed money and how easily it can service its debt in the short term.
🧮 Calculation
🎯 What does this mean for investors?
- Low or negative net debt signals financial strength and flexibility.
- Companies with strong cash positions are better positioned in crises.
- High net debt increases financial risk — especially in environments with rising interest rates or economic downturns.
📘 Cash
📈 What is it?
Cash represents all liquid assets a company can access immediately — including cash, bank deposits, and short-term investments.
🧮 How is it calculated?
🏛️ Why is it important?
It reflects a company’s financial flexibility and resilience — enabling investments, buybacks, or buffer in downturns.
🧮 Calculation
🎯 What does this mean for investors?
- A strong cash position means greater room for maneuver and crisis resistance.
- Cash-rich companies can invest, pay down debt, or repurchase shares.
- But excess idle cash might indicate a lack of growth opportunities.
📘 Shares Outstanding
📈 What is it?
Shares outstanding represent the total number of a company’s shares currently held by investors — excluding treasury stock.
🧮 How is it calculated?
🏛️ Why is it important?
It’s the basis for key metrics like Earnings Per Share (EPS), Market Capitalization, or the Price/Earnings ratio (P/E).
🧮 Calculation
🎯 What does this mean for investors?
- Fewer shares in circulation typically increase earnings per share — making each share more valuable.
- Share buybacks reduce the number of shares and boost per-share metrics.
- Issuing new shares does the opposite — diluting shareholder value and lowering per-share figures.
📘 Price-to-Earnings Ratio (P/E)
📈 What is it?
The P/E ratio shows how many times a company's earnings per share are reflected in its current share price — in other words, how "expensive" the stock appears relative to its profits.
🧮 How is it calculated?
🏛️ Why is it important?
The P/E ratio is one of the most widely used valuation metrics. It helps investors assess whether a stock appears cheap or expensive compared to its earnings power.
🧮 Calculation
📊 P/E (TTM) = Based on earnings from the last 12 months (Trailing Twelve Months):🎯 What does this mean for investors?
- A low P/E may indicate undervaluation — or signal underlying issues.
- A high P/E may reflect strong growth expectations — or an overvalued stock.
📘 Price-to-Sales Ratio (P/S)
📈 What is it?
The P/S ratio shows how much investors are paying for $1 of the company’s revenue – regardless of profitability.
🧮 How is it calculated?
🏛️ Why is it important?
P/S is especially useful for evaluating growth companies or businesses not yet profitable. It reflects how the market values the company’s sales.
🧮 Calculation
Market Cap = $271.79m | Revenue (TTM) = $925.94m
Market Cap = $271.79m | Estimated Revenue = $968.84m
🎯 What does this mean for investors?
- A low P/S may indicate undervaluation — or low profitability.
- A high P/S can reflect strong growth expectations — or excessive optimism.
- Especially helpful when evaluating companies where profits are low, volatile, or negative.
📘 Enterprise Value to Sales (EV/Sales)
📈 What is it?
EV/Sales shows how much investors are paying for $1 of revenue — considering not just equity, but also debt and cash. It’s the capital structure–adjusted version of the P/S ratio.
🧮 How is it calculated?
🏛️ Why is it important?
It’s ideal for comparing companies with different levels of debt. It reflects a company's true cost relative to its revenue.
🧮 Calculation
Enterprise Value = $123.04m | Revenue (TTM) = $925.94m
Enterprise Value = $123.04m | Forward Revenue = $968.84m
🎯 What does this mean for investors?
- EV/Sales allows for capital structure–neutral company comparisons.
- A lower ratio may indicate undervaluation; a higher one may signal strong growth expectations or overvaluation.
- Especially helpful when evaluating high-growth companies with low or negative earnings.
📘 Enterprise Value to Free Cash Flow (EV/FCF)
📈 What is it?
EV/FCF shows how many years it would take for a company to "pay back" its enterprise value using its free cash flow.
🧮 How is it calculated?
🏛️ Why is it important?
It focuses on real cash generation, ignoring accounting noise — ideal for assessing profitability and value based on liquidity, not earnings.
🧮 Calculation
🎯 What does this mean for investors?
- A low EV/FCF may signal undervaluation and strong cash generation.
- A high EV/FCF might reflect weak recent cash flow or aggressive growth expectations.
- Best suited for stable, mature businesses with predictable free cash flows.
📘 Price-to-Book Ratio (P/B)
📈 What is it?
The P/B ratio compares a company’s market value to its book value — showing how much investors are paying for each dollar of net assets.
🧮 How is it calculated?
🏛️ Why is it important?
P/B is commonly used for asset-heavy industries like banks or industrials. It helps assess whether a stock is trading above or below its net asset value.
🧮 Calculation
🎯 What does this mean for investors?
- A P/B below 1 may signal undervaluation — or weak profitability.
- A P/B above 1 implies the market expects future value creation (e.g., brand, IP, growth).
- Best used for companies with tangible assets and strong balance sheets.
📘 Equity Ratio
📈 What is it?
The equity ratio indicates what portion of a company’s total assets is financed by shareholders’ equity – in other words, how much it relies on its own capital.
🧮 How is it calculated?
🏛️ Why is it important?
A high equity ratio reflects financial strength and stability, especially during downturns. It’s a key indicator of a company’s solvency and long-term risk profile.
🧮 Calculation
🎯 What does this mean for investors?
- Companies with high equity ratios are generally more resilient and less dependent on external debt.
- Low equity ratios can signal higher risk or aggressive financial strategies.
- Important: Always assess the equity ratio in combination with the return on equity (ROE). This shows not just how stable the company is – but also how efficiently it uses shareholder capital.
📘 Return on Equity (ROE)
📈 What is it?
Return on equity (ROE) shows how efficiently a company uses its shareholders’ equity to generate profit. In other words: how much net income is earned per dollar of equity.
🧮 How is it calculated?
🏛️ Why is it important?
ROE is a core profitability metric. It helps investors understand whether a company delivers attractive returns on the capital provided by its shareholders.
🧮 Calculation
🎯 What does this mean for investors?
- A high ROE indicates that the company is using its capital efficiently and profitably.
- It’s especially meaningful for capital-intensive businesses or firms with high equity bases.
- Important: A very high ROE can also result from high debt levels – always interpret it alongside the equity ratio to assess financial health.
📘 Return on Capital Employed (ROCE)
📈 What is it?
ROCE measures how efficiently a company generates profits from its total capital – including both equity and interest-bearing debt.
🧮 How is it calculated?
It evaluates the return on all capital employed, regardless of how it’s financed.
🏛️ Why is it important?
ROCE is ideal for comparing companies with different financing structures. It shows how well management uses capital to create value for both shareholders and creditors.
🧮 Calculation
🎯 What does this mean for investors?
- A high ROCE means the company uses its capital efficiently – regardless of whether it's funded by debt or equity.
- The higher the ROCE compared to peers, the more value the company creates with its invested capital.
- Especially relevant for capital-intensive sectors like industrials, energy, or infrastructure.
📘 Return on Invested Capital (ROIC)
📈 What is it?
ROIC measures how efficiently a company generates returns from the capital invested in its core operations – regardless of whether the capital comes from equity or debt.
🧮 How is it calculated?
- NOPAT = Net Operating Profit After Taxes
- Invested Capital = Operating assets minus non-interest-bearing liabilities
🏛️ Why is it important?
ROIC is one of the most accurate indicators of capital efficiency. Unlike return on equity, it is not distorted by leverage and shows how much value is created for all capital providers.
🧮 Calculation
🎯 What does this mean for investors?
- A high ROIC shows how effectively a company uses the capital that is truly invested in its core operations.
- Unlike ROCE, ROIC focuses only on the capital that is actively used to run the business – and that requires a return (i.e. interest-bearing).
- Especially useful when comparing companies with large amounts of excess cash or non-interest-bearing liabilities – giving a more realistic picture of capital efficiency.
📘 Leverage Ratio (Debt-to-Equity)
📈 What is it?
The leverage ratio indicates how much a company relies on interest-bearing debt (such as loans and bonds) relative to its shareholders’ equity.
🧮 How is it calculated?
🏛️ Why is it important?
This ratio helps assess a company’s financial structure and risk profile. High leverage can enhance returns – but also increases exposure to interest rate changes and financial stress.
🧮 Calculation
🎯 What does this mean for investors?
- A low leverage ratio signals financial strength and independence.
- A higher ratio can improve returns in good times but increases risk during downturns or rising interest rate periods.
- 👉 Always interpret in the context of industry, capital intensity, and interest rate environment.
📘 Revenue
📈 What is it?
Revenue shows how much a company earns in total from selling its products and services – the gross income before any costs are deducted.
🧮 How is it calculated?
🏛️ Why is it important?
Revenue is one of the key figures to assess a company’s size, market position, and growth potential.
🧮 Calculation
🎯 What does this mean for investors?
- Growing revenue indicates rising demand and can be an early signal of future earnings growth.
- Comparing actual and expected revenue reveals trends in the market environment and analyst sentiment.
- Note: Strong revenue alone isn’t enough – margins and profitability matter just as much.
📘 EBITDA
📈 What is it?
EBITDA stands for “Earnings Before Interest, Taxes, Depreciation, and Amortization.” It reflects a company’s operating profit before the effects of financing, taxes, and accounting depreciation.
🧮 How is it calculated?
🏛️ Why is it important?
EBITDA is widely used to evaluate a company’s operating performance – especially across capital-intensive sectors or international comparisons.
🧮 Calculation
🎯 What does this mean for investors?
- A high or growing EBITDA indicates strong operational profitability – independent of taxes, interest, or accounting methods.
- It’s especially useful for comparing companies across sectors or geographies.
- Important: EBITDA is not a net income figure – it excludes key costs like depreciation and interest.
📘 EBIT
📈 What is it?
EBIT stands for “Earnings Before Interest and Taxes.” It reflects a company’s operating profit after depreciation, but before interest and tax expenses.
🧮 How is it calculated?
🏛️ Why is it important?
EBIT is a core profitability metric that shows how well the company performs in its main business operations – independent of capital structure and tax environment.
🧮 Calculation
🎯 What does this mean for investors?
- A high EBIT indicates strong profitability from the company’s core business – before financial and tax effects.
- It allows better comparison between companies with different debt levels or tax structures.
- Compared to EBITDA, EBIT already accounts for depreciation and reflects capital intensity more clearly.
📘 Net Income
📈 What is it?
Net income is the company’s total profit – the amount left after all expenses, taxes, interest, and depreciation have been deducted.
🧮 How is it calculated?
🏛️ Why is it important?
Net income is the most comprehensive measure of a company’s profitability – showing how much actual profit remains after all business and financing costs.
🧮 Calculation
🎯 What does this mean for investors?
- Growing net income indicates that the company is managing all of its costs efficiently.
- It directly influences valuation metrics like P/E ratio and the company’s dividend capacity.
- Over time, net income trends reveal how resilient and profitable the business model really is.
📘 Free Cash Flow (FCF)
📈 What is it?
Free Cash Flow shows how much actual cash remains after a company covers its operating expenses and capital expenditures.
🧮 How is it calculated?
🏛️ Why is it important?
FCF reflects a company’s real financial strength – regardless of accounting profits. It shows how much flexibility a company has for dividends, share buybacks, or debt reduction.
🧮 Calculation
🎯 What does this mean for investors?
- High free cash flow means the company generates real, usable cash – independent of reported net income.
- It’s often the most reliable base for sustainable dividends and buybacks.
- Declining FCF can be an early warning sign – even when profits appear stable.
📘 Revenue Growth
📈 What is it?
Revenue growth shows how much a company’s sales have changed compared to the previous year – both on a trailing basis (TTM) and based on forward projections.
🧮 How is it calculated?
Forward = (Expected revenue ÷ Revenue in prior year − 1) × 100
Forward growth is based on analyst estimates for the current fiscal year.
🏛️ Why is it important?
Rising revenue signals growing demand, business expansion, and market share gains – especially important for growth-oriented companies.
🧮 Calculation
🎯 What does this mean for investors?
- Growth is the engine of long-term value creation – especially in tech and growth sectors.
- What matters is not just current growth, but its sustainability.
- Forward projections reflect whether analysts expect continued momentum – or a slowdown.
📘 EBITDA Growth
📈 What is it?
EBITDA growth shows how much a company’s operating profit (before interest, taxes, depreciation, and amortization) has increased or decreased compared to the previous year.
🧮 How is it calculated?
Forward = (Expected EBITDA ÷ EBITDA from prior year − 1) × 100
The forward estimate is based on analyst projections for the current fiscal year.
🏛️ Why is it important?
Growing EBITDA indicates improving operational profitability – regardless of financing or accounting effects.
🧮 Calculation
🎯 What does this mean for investors?
- Strong EBITDA growth signals operational efficiency and scalability – especially during growth phases.
- EBITDA growth can be an early indicator of margin and earnings expansion – but should be assessed alongside revenue and EBIT.
📘 EBIT Growth
📈 What is it?
EBIT growth shows how much a company’s operating profit (after depreciation, but before interest and taxes) has increased compared to the previous year.
🧮 How is it calculated?
Forward = (Expected EBIT ÷ EBIT from prior year − 1) × 100
The forward estimate is based on analyst projections for the current fiscal year.
🏛️ Why is it important?
EBIT growth is a direct indicator of a company’s business performance – taking into account capital intensity through depreciation.
🧮 Calculation
🎯 What does this mean for investors?
- Rising EBIT signals improving operating profitability – even after accounting for depreciation.
- It’s especially important for evaluating companies with significant capital expenditures.
- Combined with revenue and EBITDA growth, EBIT growth provides a well-rounded view of operational progress.
📘 Net Income Growth
📈 What is it?
Net income growth shows how much a company’s bottom-line profit has increased or decreased compared to the previous year – both on a trailing basis (TTM) and based on analyst projections.
🧮 How is it calculated?
Forward = (Expected net income ÷ Net income from prior year − 1) × 100
The forward estimate reflects analysts’ expectations for the current fiscal year.
🏛️ Why is it important?
Net income is the ultimate measure of profitability. Growing net income signals stronger efficiency, cost control, and sustainable earnings power.
🧮 Calculation
🎯 What does this mean for investors?
- Stronger net income boosts valuation, dividend potential, and investor confidence.
- If profits stall while revenue grows, it may signal margin pressure.
📘 Free Cash Flow Growth
📈 What is it?
Free cash flow (FCF) growth shows how a company’s available cash – after covering operating expenses and capital expenditures – has changed compared to the previous year.
🧮 How is it calculated?
🏛️ Why is it important?
Free cash flow reflects real financial strength. Growing FCF indicates more flexibility for dividends, share buybacks, and reinvestment.
🧮 Calculation
🎯 What does this mean for investors?
- Declining FCF may point to rising investments, increasing costs, or weaker operating performance.
- Especially for dividend investors, FCF growth is critical – since dividends are paid from actual available cash.
- A negative trend isn't always bad, but it deserves closer attention.
📘 Gross Margin
📈 What is it?
Gross margin shows how much of a company’s revenue remains after deducting the direct costs of goods sold (like materials and production). It represents the company’s “raw profit” before fixed costs, taxes, and interest.
🧮 How is it calculated?
Or simply: Gross Margin = Gross Profit ÷ Revenue × 100
🏛️ Why is it important?
Gross margin indicates how efficiently a company can produce or procure what it sells. It is a key measure of product-level profitability and pricing power.
🧮 Calculation
🎯 What does this mean for investors?
- A high gross margin suggests strong pricing power and efficient production.
- Falling margins may signal rising input costs or competitive pressure.
- Compared to peers, gross margin offers insights into the quality of a business model.
📘 EBITDA Margin
📈 What is it?
The EBITDA margin shows how much of a company’s revenue remains as operating profit before interest, taxes, depreciation, and amortization.It reflects operating efficiency without being distorted by financing or accounting factors.
🧮 How is it calculated?
🏛️ Why is it important?
The EBITDA margin reveals how much operating income a company generates per dollar of revenue – independent of capital structure and tax effects.
🧮 Calculation
🎯 What does this mean for investors?
- A high EBITDA margin reflects strong core profitability – before accounting distortions.
- It allows for effective comparisons across companies and sectors.
- A stable or growing margin signals efficient cost control and business scalability.
📘 EBIT Margin
📈 What is it?
The EBIT margin shows what percentage of revenue remains as operating profit after depreciation but before interest and taxes.
🧮 How is it calculated?
🏛️ Why is it important?
The EBIT margin reflects a company’s core profitability while accounting for capital intensity (e.g. machinery, infrastructure). It’s especially useful for comparing businesses with different levels of depreciation.
🧮 Calculation
🎯 What does this mean for investors?
- A high EBIT margin shows that the company remains efficient even after factoring in depreciation.
- It’s especially relevant for capital-intensive industries.
- Stable or rising EBIT margins over time are a strong indicator of pricing power and business quality.
📘 Net margin
📈 What is it?
Net margin shows how much of a company’s revenue remains as bottom-line profit after deducting all costs, interest, taxes, and depreciation.
🧮 How is it calculated?
🏛️ Why is it important?
Net margin reflects a company’s overall efficiency – across operations, financing, and taxation. It shows how much actual profit is generated from each dollar of revenue.
🧮 Calculation
🎯 What does this mean for investors?
- A high net margin means the company is not only strong operationally but also manages financing and taxes efficiently.
- Peer comparisons reveal business quality and competitiveness.
- Declining margins despite revenue growth can be a red flag for rising costs or inefficiencies.
📘 Free cash flow margin
📈 What is it?
The free cash flow (FCF) margin shows how much of a company’s revenue remains as actual free cash after covering all operating expenses and capital expenditures.
🧮 How is it calculated?
🏛️ Why is it important?
This margin reflects the true liquidity generated by the business – independent of accounting rules or depreciation. It’s especially relevant for dividends, buybacks, and reinvestment decisions.
🧮 Calculation
🎯 What does this mean for investors?
- A high FCF margin means a company consistently generates strong cash flow.
- It’s a positive signal for financial stability and shareholder returns.
- The long-term trend is key – a declining margin may indicate rising investments or weakening operating efficiency.
📘 Earnings per share (EPS)
📈 What is it?
Earnings per Share (EPS) shows how much profit is attributable to a single share – and is one of the most important metrics for evaluating a company's performance.
🧮 How is it calculated?
The diluted share count reflects potential new shares that could be issued through options, convertible bonds, or other rights.
🏛️ Why is it important?
EPS is the basis for many key valuation metrics like P/E ratio, PEG ratio, or payout ratio. It enables comparisons of profitability across companies, regardless of their size.
🧮 Calculation
🎯 What does this mean for investors?
- EPS captures per-share profitability and is especially useful for comparisons over time or with analyst estimates.
- Rising EPS may signal consistent growth or share buybacks.
- Important: Always use diluted EPS for more realistic valuations – especially in companies with stock-based compensation.
📘 Free cash flow per share (FCF per share)
📈 What is it?
Free Cash Flow per Share shows how much free cash flow a company generates per outstanding share – after investments, but before dividends or debt repayments.
🧮 How is it calculated?
Free cash flow is calculated as operating cash flow minus capital expenditures (CapEx).
🏛️ Why is it important?
FCF per Share reveals how much real cash is available per share – useful for dividends, buybacks, or reducing debt. Unlike net income, free cash flow is harder to manipulate and often seen as a more reliable metric.
🧮 Calculation
🎯 What does this mean for investors?
- High FCF per share signals strong financial flexibility.
- It shows how much capital the company can effectively reinvest or return to shareholders.
- Particularly relevant for dividend payers and capital-efficient businesses.
📘 Short interest
📈 What is it?
Short interest indicates how many shares of a company are currently sold short – that is, borrowed and sold by investors who expect the price to decline.
🧮 How is it calculated?
It reflects the percentage of a company’s shares that are being shorted relative to the total shares available.
🏛️ Why is it important?
Short interest serves as a sentiment indicator: A high value may signal skepticism or bearish expectations – but also increases the potential for a short squeeze if prices rise unexpectedly.
🧮 Calculation
🎯 What does this mean for investors?
- Low short interest usually indicates market confidence in the company.
- High short interest can be a warning sign – or an opportunity if sentiment shifts.
- Especially relevant in volatile markets or ahead of key earnings releases.
📘 Employees
📈 What is it?
The employee count shows how many people a company employs worldwide – offering insights into its size, structure, and business model.
🧮 How is it calculated?
🏛️ Why is it important?
It helps assess operational scale, labor intensity, and cost structure. Combined with revenue and profit, it enables key metrics like revenue per employee or productivity.
🧮 Calculation
🎯 What does this mean for investors?
- A high headcount can signal operational complexity – but also significant growth capacity.
- Revenue per employee is a key indicator of efficiency.
- Especially useful for comparing tech, industrial, or service-heavy companies.
📘 Turnover per employee
📈 What is it?
Revenue per employee indicates how much revenue a company generates on average per employee – a key measure of efficiency and productivity.
🧮 How is it calculated?
The employee count is typically taken from the most recent annual report.
🏛️ Why is it important?
This metric helps compare business models – especially between labor-intensive and technology-driven companies. A high value suggests automation, operational efficiency, or strong value creation per head.
🧮 Calculation
🎯 What does this mean for investors?
- A high revenue per employee indicates a scalable and margin-strong business model.
- A low figure may reflect labor-intensive operations or lower value-add.
- Especially helpful when comparing tech companies to industrial or service sectors.
USANA Health Sciences, Inc. Stock Analysis
Analyst Opinions
6 Analysts have issued a USANA Health Sciences, Inc. forecast:
Analyst Opinions
6 Analysts have issued a USANA Health Sciences, Inc. forecast:
USANA Health Sciences, Inc. Events
Past Events
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AUG
5
Q2 2026 Earnings Call
about one month ago
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MAY
6
Q1 2026 Earnings Call
4 months ago
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FEB
18
Q4 2025 Earnings Call
7 months ago
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OCT
23
Q3 2025 Earnings Call
11 months ago
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StocksGuide Free
USANA Health Sciences, Inc. — Q2 2026 Earnings Call
1. Management Discussion
If anyone should require operator assistance during the conference, please press star 0 on your telephone keypad. As a reminder, this conference is being recorded. I'd now like to turn the conference over to your host, Andrew Masuda, Director of Investor Relations. Please go ahead.
Thank you, and good morning, everyone. We appreciate you joining us to review our second quarter results. Today's conference call is being broadcast live via webcast and can be accessed directly from our website at ir.usana.com. Shortly following the call, a replay will be available on our website. As a reminder, during the course of this conference call, management will make forward-looking statements regarding future events or the future financial performance of our company. Those statements involve risks and uncertainties that could cause actual results to differ, perhaps materially, from the results projected in such forward-looking statements.
Examples of these statements include those regarding our strategies and outlook for fiscal 2026, uncertainty related to the economic and operating environment around the world, and our operations and financial results. We caution you that these statements should be considered in conjunction with disclosures, including specific risk factors and financial data contained in our most recent filings with the SEC.
I'm joined by our Chairman and Chief Executive Officer, Kevin Guest, our Chief Financial Officer, Doug Hekking, our Chief Commercial Officer, Brent Neidig, our Chief Operating Officer, Walter Noot, our Chief Scientific Officer, [ Dr. Catherine Armstrong ], as well as other executives. Yesterday, after the market closed, we announced our second quarter results and posted our management commentary document on the company's website. We'll now hear brief remarks from Kevin and Doug before opening the call for questions.
Thank you, Andrew, and good morning, everyone. I want to use my time this morning to step back from the quarter and talk about where USANA is headed, because I remain more convinced than ever that the path we're on is the right one. We're building something different, evolving the company. We're building a diversified, omni-channel health and wellness company anchored by science and built on deep, lasting consumer loyalty, with our products reaching consumers wherever they choose to shop. This transformation is well underway, and the progress we are seeing across our portfolio this year reinforces my confidence in our strategic direction. Our core nutritional business continues to demonstrate stability and momentum. Mainland China, our largest and most established market, is showing signs of renewed strength, and that matters because it reflects the deep trust our brand partners and customers place on this brand. We're backing that trust with continued innovation, including the recent launch of GLOW, our first skin health supplement, which extends our science leadership beyond topical skin care into cellular-level formulations.
Looking ahead, I'm pleased to note that USANA will host our live 2026 Americas Convention on August 12th through the 15th in San Diego, California. This event brings together our brand partners from across the United States, Canada, and Mexico for business training, new product launches, product education, and recognition of our top performers, reinforcing the engagement and momentum that we continue to drive from our core nutrition business. That same momentum is what we're working to build across the business. We're evolving our brand partner compensation plan, accelerating our product innovation, and modernizing technology that underpins how our brand partners and our customers interact with our brand. I'm genuinely excited about the compounding effect these initiatives will have as they mature.
Hiya continues to open doors for us in ways that would have been hard to imagine a few years ago. The brand's presence at Target remains strong. Our early footprint in Canada and the U.K. is trending in the right direction, and the Hiya team is leaning into the traction we are seeing on Amazon as well. At the same time, Hiya's direct-to-consumer business has experienced a tougher and more expensive digital marketing environment, and that's had a clear impact on subscriber growth this year. I don't want to gloss over that. It's a real challenge the business is confronting right now. But in the long run, I assure you that the brand equity Hiya has built as the category leader in children's health and wellness is a durable asset that gives us multiple paths for growth. We see a very encouraging future as Hiya expands into new retail channels, new geographies, new product categories, and new customer demographics.
Rise Wellness experienced a packaging issue that affected execution of the commercial plan during the quarter. Although that issue is resolved, we now expect that Hiya's net sales for the full year to be lower than we previously anticipated. Again, when I look beyond this short-term disruption and focus on the future, on Rise's long-term potential, I am very confident. Protein Pop is barely a year into its life as a national brand, and it's already built real distribution and shelf presence across major retail channels. The team is launching an additional Protein Pop product in the third quarter that demonstrates its commitment to speed and innovation. So yes, the current outlook has been disrupted, but our conviction in where the brand is headed long-term remains firmly intact.
I see the potential synergy and growth opportunity in our company that is realized through executing a clear strategy with discipline, and stabilizing and strengthening our core nutritional business while scaling our high-potential venture brands and investing in the technology and innovation that will define our next decade. We anticipate these efforts will stimulate growth, and I'm encouraged by the caliber and engagement of the teams driving this forward. Our balance sheet remains a real source of strength and opportunity for us. We ended the quarter with $169 million in cash, 0 debt, and generated $20 million of free cash flow, driven in large part by efforts to improve our working capital management. Our financial flexibility allows us to keep investing in USANA's evolution into a diversified, omni-channel health and wellness company, as we navigate near-term puts and takes across the portfolio. With that, let me hand it over to Doug to provide additional color on our second quarter financial results and our updated outlook as things come to fruition.
Thanks, Kevin, and good morning, everyone. There are two primary drivers that impacted this quarter's results that I want to briefly discuss. First, the company recorded an estimated preliminary non-cash goodwill impairment charge of $29 million related to the Hiya reporting unit. This non-cash charge primarily reflects the [lower?] than expected performance and changes in near-term forecasts, as well as updated valuation assumptions under applicable accounting standards, including adjustments to market multiples and discount rates. The impairment does not reflect a change in management's commitment to the business. We are confident in the future of Hiya and its management team while recognizing their strategic importance as part of our long-term growth strategy and as they leverage the brand across additional channels and international markets. Second, we recorded $9 million in income tax expense on a pre-tax loss of $19 million during the quarter, which contributed to the loss.
The aforementioned items created misalignment between where we generate revenue and where we incur costs and have the effect of disproportionately impacting income taxes. Now, let me turn to our updated outlook for fiscal 2026. We are lowering our full-year outlook that reflects the more difficult and expensive direct-to-consumer digital marketing environment affecting Hiya's second-half net sales and lower near-term net sales from Rise Wellness. Our core nutritional outlook is largely in line with expectations and its performance this quarter reinforces our confidence that the initiatives underway are the right foundation for long-term sustainable growth. To be clear, this update is about near-term timing, not our long-term conviction in either venture company. Hiya and Rise Wellness are both continuing to build solid foundations with retail relationships, product pipelines, and market footholds that we believe will drive meaningful future growth. I'll now hand the call back to Kevin before we open the line for questions. Thanks.
Thanks, Doug. Let me close with this. Our core nutritional business is performing in line with our expectations and gaining traction from the actions we've taken to stabilize it. And our balance sheet remains strong, debt-free, and cash-generative. Hiya and Rise Wellness encountered near-term challenges this quarter, but both brands continue to build real momentum in retail, e-commerce, and international expansion, and we remain confident in their long-term potential. We recognize that the path to building a diversified, omni-channel health and wellness company will not always be linear, and we are managing the business accordingly with discipline and clear focus on long-term value creation for our stakeholders. With that, I'll now turn the call back to the operator for Q&A.
Thank you. [Operator Instructions] Our first question comes from the line of Anthony Lebiedzinski with Sidoti & Company. Please proceed with your question.
2. Question Answer
So, the core nutritional segment outperformed our expectations and certainly it was nice to see the sales growth in Greater China. So, as it relates to China, what do you think are the main factors driving the slight uptick in sales, and do you think the sales growth is going to be the main factor? Are gains sustainable going forward?
That's an excellent question. I'm going to ask Brent Neidig, our Chief Commercial Officer, to respond to that.
Hey Anthony, good morning. Yes, we're pleased with the performance of China in the second quarter. As you recall from the last quarter, we did have a very robust incentive and new product launch offering in the first quarter. And any time we do something like that, there always is a tail associated with it, and we saw that tail continue in the second quarter. We are pleased with the resiliency of our brand partners and our customers in the Chinese market. That economy is soft, just like many economies around the world, but they have shown resiliency and there is a tremendous amount of momentum that's been built up over the last several quarters with the initiatives that we've rolled out.
So I expect to see that continue. So we're pleased. We have several things that are scheduled for the back half of the year, just like we do in many of our other markets in terms of new product rollouts, incentive offerings, and other events. So pleased to see the progress that we've made so far, and we expect that to continue.
Hey, this is Kevin. I just wanted to add on to Brent's comments. From my perspective, we have stronger leadership overall in China now than we've ever had, and that leadership is really executing well on their strategy for the market and our overall strategy for the company, and we're seeing that in results. Our president there, Peter, is doing a fantastic job, and my confidence has never been higher in our Chinese leadership, which is a really bright spot for us.
Thank you. Then just switching gears to North Asia, which was a laggard for you guys in the direct business. So it was down 20% in revenue. Maybe if you could just take a stab at explaining what's going on there. I know it's a far smaller market than China, but nevertheless, it's an important market. And kind of, you know, what are your thoughts taking as far as steps to improve that trend?
Yes, so when we look at North Asia, Korea is our largest presence there. Korea has been a very big market for us in the past. We've seen a lot of slowing in that market over the last couple of years. I think I talked about this last quarter, but we went through a leadership transition at the beginning of the year in Korea. That always causes a little bit of disruption, but we're very pleased in our new general manager for that market and we're starting to see a lot of momentum beginning to build. There's unification taking place amongst the leadership team within the market, including our brand partner leadership as well. So just the most recent reports and the things that we're seeing come out of that market, I have reason for optimism to see what's coming out of Korea. We also have a couple of new products that are going to be launched in that market, personalized packs that are going to be unique to that market as well that's going to be launching here in the third quarter. I am very optimistic to see where that takes us and I expect to see Korea rebound.
That's good to hear, certainly. And then switching gears to Hiya, so certainly I know you have expanded into brick and mortar and doing some international there as well, but just wanted to get a better sense as to how is the core direct U.S. subscription business doing? I don't know if you are prepared to give us an exact number, but just wondering how it's doing on an organic basis, excluding some of the growth initiatives.
That's an excellent question, and I'm going to ask Walter Noot, our Chief Operating Officer, who also, from a home office perspective, is managing that business for the management team. Walter, will you give some color to that question?
Yes, thanks. Yes, so Hiya, we talked about this several quarters in a row that with Meta, the CAC's been going up. We've had issues with Meta's algorithm and it's created issues for us as far as customer acquisition. And we've seen improvement in that over the last, let's say last few months, last month, let's say, we've seen improvement in those numbers and that's been encouraging. The other thing is that it's back-to-school time, so that's a great time of the year for Hiya. We believe when you look forward, we think that's going to help us for this year. That's obviously a great thing. When we acquire customers, first order with Hiya is half price, which is different than a lot of other subscription businesses. So you'll see, as you look at our outlook, you can see that it looks, let's say, somewhat flat, but that also assumes that we're going to be adding more customers with our subscription business on top of the retail that we're doing right now with Target.
Mm-hmm. Got you. So as you alluded to, you know, Hiya has had some issues with Meta, changing their algorithms and so on. So just wondering, what are your thoughts on shifting some of the advertising more towards, let's say, TikTok, for example, maybe using some influencers on there, you know, just wondering if there are ways that you can just try to diversify your efforts beyond Meta, which as you've alluded to, you've had issues with.
Yes, that's exactly right. That's exactly what the team's doing right now. We are, uh, with the Hiya team, they've got plans in place throughout the rest of this year and beginning of next year. TikTok is going to be a big mechanism for them to be able to build growth and of course retail. We're adding more retailers. So that's why we're very excited about the future of Hiya, where it's going. It's a transition time, I think. You know, we've been a subscription-only business for, what, 4 or 5 years, and it's been great. Hiya has been awesome at that. I think that business is somewhat flattened out, as you've seen. Hiya has spent $150 million on advertising over the last X amount of years, has built a really, really good brand. It's got a great brand presence and really good awareness with parents and their kids. And so we just see these opportunities in TikTok, retail, international business. We think the business is going to do well in the future.
Okay. Sounds good. And then just shifting gears also to Rise Wellness. So is it possible for you guys to quantify the impact of the packaging issue in the second quarter and the related costs associated with that?
Yes, Anthony, this is Doug. And Walter can kind of provide some clarity. He's been in the middle of it. But essentially, as we identified the issue and took proactive steps, it essentially stopped the sales from pushing through the channel. And I think doing the right thing, I think represented us well with that customer and gives us future opportunity, but without a doubt it was disruptive. We did take a charge for some inventory and there's other inventory that we think we can go back and find a way to get out there where we feel good about standing behind the product. So that's a big picture. But we had a much higher guidance range than what we provided. And that delta is really kind of the slow down and kind of the ramping back up. But as Walter indicated, there's a lot of real positive momentum at Rise, some new product innovation that we see on the horizon. So we're quite excited about it. But yes, it's definitely been a short-term disruption. Walter, anything else?
Yes, it was a cosmetic issue with some packaging. We voluntarily pulled the packaging back. Sold product, it wasn't a safety issue or anything like that. We're going to continue to be able to resell through that channel, through those resellers, through those retail outlets. We have good relationships with them. So, again, this is a short-term thing, and it affects our quarter because we have negative impact on revenue. We're very positive about where Rise is going. It's a great brand. And if you look at the year, we've already exceeded what we did last year to date with Rise. And there's a lot more coming. By end of year, we'll have over 4,000 retailers we're selling in, 4,000 doors, and that's, you know, of a brand that's less than a year old, that's pretty good.
Yes, and more specifically, Anthony, the range relative to kind of the change from our original guidance in that $30 million to $40 million top line, and probably about $4 million to $5 million pressure on margins just from having a little bit lower top line of some of that operational infrastructure.
That's very helpful color. And then, you know, last question for me is just how do we think about the tax rates for the back half of the year?
Yes, I think just because of the near-term pressures we see in these venture companies, we're going to see an elevated tax rate. Those things really contributed to structurally something where we've had a little misalignment with revenue, where revenue is generated, costs are incurred, and this amplified it. It's definitely going to be an elevated tax rate through the year. Obviously not what you saw in the second quarter on the catch-up, but I think it'll definitely be much higher than what we'd like to see it. And so we're definitely working on things. And I think as we execute in these venture brands and work on some other things, you'll see that come down perspective, which we're confident we can do.
Sounds good. Well, best of luck. Thank you.
Thanks, Anthony. Thank you. [Operator Instructions] Our next question comes from the line of Ivan Feinseth with Tigress Financial Partners. Please proceed with your question.
So beyond some of the near-term operational and, you know, goodwill issues, could you talk, you know, bigger picture? You're evolving. It looks like you're evolving to me from, you know, a direct seller to an omni-channel distributor because now you have subscription direct sellers, direct to consumer, now in-store availability. Can you give some, you know, your thoughts on how you're growing that? And second, you know, you have this tremendous vertically integrated product development manufacturing platform, like how you could, when you make acquisitions, bring more brands onto your platform, develop new products to address what is an increasing interest on the consumer side on nutrition, preventative health, sports nutrition. So it looks like you have a huge and growing market and an infrastructure that you're building to address a market on multi-levels and multi-different kinds of products, including the new one you said you just introduced, the skin care supplement.
Ivan, thank you. That's a great question. Strategically, if you look at the world overall, the wellness platform, as you stated, is a growth market, and we are involved in a growth marketplace, and we believe we're the best in the world at what we do. And as we explore and find new ways to service consumers and grow consumers, the overall strategy statement is to grow consumers of our brands. We need more people every day putting what we make in their mouths, to put it simply. And that's what we're focused on. We've got it on signs hanging around the building. And that does lead us into the omni-channel approach and being better at what we do. And just if you look at our core nutritional business, we have a massive opportunity just by upgrading our technology and making our products more accessible to the consumer and making the interaction be more relevant.
I truly believe that the frequency of relevant communications equals brand loyalty. And so as we focus on relevant communications leveraging technology, which is, you know, one of our major spends here as we invest in the change and evolution of the company, it's more about interaction and experience. And one thing you mentioned was our GLOW product. And it was really, for me, a test to really see the relevancy on some of our initiatives as much as it was a very, very good product launch. And we were very pleased with the amount of incremental business we were able to generate and new consumers who hadn't experienced our brand through a new approach and a new avenue. I'm going to ask [ Dr. Catherine Armstrong ], our Chief Scientific Officer, if you would, just add some color to Ivan and the notion of product extension and how it can fit into an omni-channel marketplace. Also, leveraging across the different categories, the opportunity we have there.
Ivan, good to talk with you again. So I mean, exactly what you said, right? We have a very strongly integrated R&D team operations execution. And that's the strength we have that can be leveraged not just through what has been traditionally our core business, but through the acquisitions of the brands that we have acquired and through many other means. And so we are looking at how do we grow that? How do we make sure we're leveraging all of the talent we have at USANA in a way that best drives return? For us, it's been a lot of fun, as you and I have discussed, as we look at these different formats and these different opportunities, things that we're learning in the core business globally has helped us as we look at, you know, for example, Hiya's expansion and how we understand kids through the Hiya market clearly can feed back into how we understand kids within our USANA core. So all of those are accurate reflections, insights on your part and aligns with what we're thinking.
When it comes to GLOW, I think that's really representative of who USANA is. We started with ingredients that have strong clinical data, and we didn't stop there. We wanted to really think about how do you address skin from the inside and not just through a topical solution. So we took those clinically tested and relevant ingredients and then put them into a consumer challenge test to really understand if our consumers could see and feel the difference. It's important to us, as Kevin said, you know, we believe we are and will continue to be the best in this space. So for us, making sure we have that clinical data, those ingredients that are at the right doses and the right forms, and then ensuring that those deliver all the way through to the customer experience is important to all of our businesses and all of our brands.
Um, Ivan, I also have Dave Bagley here who is our Executive Vice President over Product Marketing. And he works hand in glove with Catherine, strategically on your question. And would you add some color also to Ivan's question?
Yes, thanks, Kevin. Ivan, it's been a bit, but it's good to chat with you again. Thanks for being on the call. I think at the root of it, it's not the activities we're doing. It's really, to Kevin's point, it's the strategy. And at the root of that is what are we doing to not just sell products but really identify what the ideal customer looks like? And how do we offer something better to them than what the other people are offering. And GLOW is definitely representative of that. We have a very strong audience in the women category, and they're looking to us as a trusted brand to bring unique and innovative solutions to them. I applaud Kevin's leadership in wanting to be able to look at some ways that are uncommon, but yet very founded in science to deliver something meaningful that's more rooted in, I'd say, less marketing and more consumer experience that elevates the USANA brand. So we're going to continue to lean into that, and in partnership with Dr. Armstrong and her team, we're very confident where this is going, so we're excited about it.
It's an interesting new product, a new category. It's good to see because everything is going back to gut health, including collagen synthesis. Everything is in your gut, skin, digestion, health. So it's a huge area. Even, let's say, teeth care is more even being focused on the gut than just toothpaste. So congratulations on the new product.
Thanks, Ivan. Thank you. That concludes our question and answer session. I'll turn the floor back to Mr. Masuda for any comments.
Thanks, Melissa, and thank you all for your questions and participation on today's conference call. If you have any remaining questions, please feel free to reach out to Investor Relations at 801-954-7210.
Thank you. This concludes today's conference call. You may disconnect your lines at this time. Thank you for your participation.
USANA Health Sciences, Inc. — Q1 2026 Earnings Call
1. Management Discussion
Greetings, and welcome to the USANA Health Sciences First Quarter 2026 Earnings Call. [Operator Instructions] Please note, this conference is being recorded.
I will now turn the conference over to your host, Andrew Masuda. Please go ahead, sir.
Thank you, Carrie, and good morning, everyone. We appreciate you joining us to review our first quarter results. Today's conference call is being broadcast live via webcast and can be accessed directly from our website at ir.usana.com. Shortly following the call, a replay will be available on our website.
As a reminder, during the course of this conference call, management will make forward-looking statements regarding future events or the future financial performance of our company. Those statements involve risks and uncertainties that could cause actual results to differ perhaps materially from the results projected in such forward-looking statements. Examples of these statements include those regarding our strategies and outlook for fiscal year 2026, uncertainty related to the economic and operating environment around the world and our operations and financial results. We caution you that these statements should be considered in conjunction with disclosures, including specific risk factors and financial data contained in our most recent filings with the SEC.
I'm joined by our Chairman and Chief Executive Officer, Kevin Guest; our Chief Financial Officer, Doug Hekking; our Chief Commercial Officer, Brent Neidig; our Chief Operating Officer, Walter Noot, as well as other executives. Yesterday, after the market closed, we announced our first quarter results and posted our management commentary document on the company's website.
We'll now hear brief remarks from Kevin before opening the call for questions.
Thank you, Andrew, and good morning, everyone. Our first quarter results reflect USANA's continued and deliberate transformation from a single channel direct sales business to a diversified omnichannel health and wellness platform. That evolution is the defining story of this company right now and the progress we are making across our 3 business segments reinforces our confidence that this strategy will deliver sustained compounding value over time.
In our core nutritional business, we saw sequential improvement in Q1. Net sales of $204 million grew 7% sequentially, driven by active customer growth, particularly in our China market, which benefited from customer acquisition activity around the Lunar New Year. The sequential improvement is encouraging and consistent with our view that the actions we are taking to stabilize the business are beginning to take hold.
These actions are organized around 3 clear priorities. First, we are advancing the rollout of our enhanced brand partner compensation plan, which is designed to strengthen the business opportunity and improve the productivity and retention of our distributor network. Second, we are accelerating new product launches, bringing a robust pipeline of new and upgraded formulations to market. And third, we are accelerating our technology initiatives to modernize our core systems and fundamentally improve how customers experience our brands while driving future cost efficiencies across our IT infrastructure.
Taken together, we remain confident that these initiatives will continue to stabilize active customer counts and position the core nutritional business. We are returning to sustainable growth.
Turning to our omnichannel brands, Hiya and Rise Wellness. They are expanding the aperture of what USANA can be, reaching consumers in new channels and through innovative formats. Hiya generated $32 million in net sales in the first quarter with active monthly subscribers of 186,000, reflecting modest sequential improvement from Q4. The business has been navigating a period of elevated customer acquisition costs stemming from disruptions in the Meta advertising environment beginning in the third quarter of 2025.
The Hiya team is deploying the resources and capabilities needed to reaccelerate subscriber growth, and we expect the second half of 2026 to reflect stronger performance. Several important milestones position Hiya well for that recovery. The brand launched in Canada in January and in the United Kingdom in March, establishing its first international direct-to-consumer markets. Hiya also expanded into retail and products are now available at Target, representing the brand's first partner in brick-and-mortar retail.
Lastly, I want to point out how we are leveraging USANA's assets to accelerate growth and improve margins. Since the acquisition a little over a year ago, we have implemented a new ERP system, transitioned 3PLs, leveraged our R&D team to develop new products, leveraged our market expansion team to expand internationally and brought manufacturing and packaging of Hiya products in-house, a strategic shift that we expect will generate incremental margin efficiencies beginning in the back half of 2026. We continue to project full year 2026 net sales of $140 million to $155 million for Hiya.
Rise Wellness delivered $14 million in net sales for the first quarter, more than 8x the prior year's first quarter and -- which is a 143% sequential increase. This performance was driven by the national launch of Protein Pop Plus into Costco. Protein Pop's journey from concept to national shelf placement in a matter of months is compelling proof of this team's ability to capitalize on speed and execution.
While this market has proven to be a competitive and evolving marketplace, Protein Pop has gained meaningful share in the market and emerged as a leading brand that we expect to see on shelves across many more retailers in the coming months and years. Rise Bar also continues to benefit from the retail distribution relationships established last year.
As with Hiya, we have been able to leverage our significant assets and expertise to benefit the 2 Rise Wellness brands. We are manufacturing Rise Bars on USANA's high-speed, high-tech bar line. Our world-class operations team is managing inventory and demand and planning for both Rise and Protein Pop to create efficiencies.
Lastly, our R&D team is reformulating existing products and developing future products for these brands to ensure our customers have an excellent experience while also receiving the best nutritional products possible. We are pleased with the market reception and remain confident in the long-term potential of this segment. We are reaffirming our full year 2026 guidance across all metrics, projecting consolidated net sales of USD 925 million to USD 1 billion.
Omnichannel net sales are on track to represent more than 20% of the total net sales this year, up from 16% in 2025 and approximately 1% just 2 years ago. That trajectory speaks to how quickly our omnichannel platform is taking shape.
Please note that our guidance includes an incremental, but modest investment for our technology modernization initiatives, which we are funding primarily through a repurposing of existing resources as well as savings generated from operational efficiencies and the initiatives, which underscore our commitment to innovate without sacrificing fiscal discipline.
Let me close by putting this quarter in context. We came into 2026 with a clear strategy, stabilize the core nutritional business, scale our omnichannel brands and modernize the platform that ties it all together. The first quarter showed progress on all 3 fronts. Active customers in the core business grew sequentially. Hiya reached new markets and a new retail channel. Rise Wellness delivered a strong launch in the quarter at Costco and Target, and we have formalized technology investment plans that will improve how we operate and how consumers experience our brand.
None of this happens overnight. We are committed to making impactful investments that generate robust returns. Our balance sheet is strong. Our people are aligned and our strategy is clear. We have solid -- 3 solid segments, an evolving omnichannel platform and a mission that resonates with health-conscious consumers around the world. We remain committed to executing with focus and delivering sustainable long-term value for our shareholders.
With that, I will now turn the call back over to the operator for Q&A.
[Operator Instructions] And our first question will come from Anthony Lebiedzinski with Sidoti & Company.
2. Question Answer
Certainly nice to see the better-than-expected results. And specifically, I wanted to start with China actually. So we saw some improvement there in Q1. Just good to see. Just wondering if you've seen any notable changes from a macro perspective in China or maybe elsewhere as it relates to increased fuel prices since the Iran conflict started. Just wondering what you've seen just from a broader consumer perspective as it relates to higher fuel prices.
Yes. Brent, I'd like you to respond to that. He's our Chief Commercial Officer. Brent?
Yes, Anthony, it's good to hear from you. As of this point, we haven't. I'd say the macro environment in China is pretty stable relative to the rest of the globe. They've been somewhat insulated from different inflationary pressures that the rest of the markets have been under. I think it's still a little too early to tell in terms of the Iran conflict and what we might see with fuel prices there. But everything that we've seen and that I'm hearing from our brand partners there and from our leadership there is that there's no material impact as of yet.
That's good to hear. And as it relates to the core nutritional business, so you talked about accelerating product development and also as far as the time lines are concerned for that. Can you share any more specifics as far as maybe like the number of new products that are in the pipeline or anything else that you can share as to what you are -- you have coming up as far as new product development?
Yes, Anthony, we have our Chief Science Officer, Dr. Kathryn Armstrong here. Kathryn, will you go ahead and handle that question?
Yes. Anthony, good to talk with you. So for us, a lot of the focus has been on how we better leverage our skill sets internally and externally across all of the different product formats that we now offer against the expanded brand portfolio.
So when we talk about the number of products under development, obviously, there are products for development in all of our sections as well as in our team in China. It's certainly over 20. And so I wouldn't go into specifics on launch dates and in which categories they fall under, but we have a plethora of products we're developing for all of the brands and for all of the markets.
The focus for us is really on how do we help more people ingest the products that we are making across the brands and how do we leverage things we've learned in our different channels that appeal to different types of consumers or to different types of use occasions and how do you expand each of the channels to allow for more of those consumers to engage across those channels.
So for example, you can expect to see us bring in things to our direct sales channel that are aligned with key insights we've had around how consumers are evolving their experience desires for product usage and really pulling those learnings together to make sure we have products in each of the channels that are appealing to the right consumers to meet them where they are in their health journey.
Anthony, this is Kevin. Just to jump in, and I'm going to ask Walter to comment on this as well. To your point and what Kathryn just alluded to, one of the things that I've been very optimistic about is how we're leveraging the expertise and knowledge base from other sales channels into our core business and the learnings that we're gaining from that -- from a direct-to-consumer approach and how that helps lend itself in other categories.
And Walter, just again, to Anthony's point about just our product strategy overall as it relates to the omnichannel and how that's affecting each other. I'd be curious to hear your thoughts on that.
Yes. I mean cross-platform. I mean, I think what it's done is it's -- traditionally, we've been a direct sales business. And it's an international business. But with the rapid growth we've had with retail, with the -- for instance, with Protein Pop, launching that new product recently, we've just seen how quickly trends change. Right now, there's some -- obviously, there's some really big trends around weight loss and using protein to be able to supplement that weight loss. And that's been a really big benefit.
And we've seen -- we've been able to leverage that and use product development and the teams we've got to be able to help us to design and develop new products for the direct sales channel. I think you're going to see some of the things that we do in retail and direct-to-consumer, you'll see those bleed over into the direct sales channel.
That sounds like you certainly are leveraging all your assets, which sounds promising. Now just switching gears to Hiya. So definitely it was good to see a sequential uptick in sales, though the SG&A was higher than the fourth quarter and higher than last year. Is that just seasonality of the business as far as marketing costs? Or is there anything else that's impacting the SG&A?
Yes, Anthony, this is Doug. As Kevin alluded to and Walter kind of contributed as well, Hiya is diversifying within its own channel, and it had the initial foray into retail towards the latter part of the quarter and also entered both Canada and the U.K. And so those things consume some operational resources as well. The other aspect that you see is kind of this meta algorithm that we've talked about a few times, the cost of acquiring a customer in that short term was definitely present there on a year-over-year comparison.
And can you give us an update as to how Hiya is doing so far in Canada, the U.K. and the selling at target?
Canada -- for Canada, I think we've put some Targets in place, and we've exceeded those targets in Canada. And I think that's only because I think a lot of people in Canada are -- have probably seen Hiya. They understand the brand. It kind of bleeds over. With the U.K., it's a new market for us. It's a brand-new territory. We're using Meta also in the advertising there. And it's -- I would say it's very new for us. I mean we've been out about a month, probably about a little -- maybe a month, maybe 5 weeks.
So I would say, again, it's a very slow start for us because it's a new market, but we have very high hopes for the U.K. I mean we went across the world and looked at what the best markets are for the Hiya products. And we believe that with the DTC appetite in the U.K. and with the competitive landscape there, we think Hiya is going to do really well.
And as far as Target goes, Target has really been -- I think it's been 2 weeks, maybe a little more than 2 weeks that it's been on shelf. About a week ago, many of the Targets, I would say most of the Targets have gone -- had put end caps in place with Hiya products. So we went live with Target, then we put end caps in place. So we're going to see -- we really don't know. I think in the next few weeks, we'll have a much better idea. But the placement in the store, the amount of attention that Target has given us gives us high hopes, and that's why we've kept our guidance in place.
Yes. And I would say, Anthony, that things are going according to plan. And as we kind of step into this area, even maybe expanding into Amazon a little bit more than we have in the past is things are going according to plan, but we expect it to be kind of a build as we go on here, and we're very early stage.
The other thing that Walter and the BizDev team has worked with the Hiya team on and what they communicate is the diversification with their own advertising and consumer spend of different ways to reach the consumer and being a little bit more insulated relative to being too committed to just one channel for advertising. They've always been diversified, but they continue to work on that aspect as well.
Okay. And then just switching gears to Rise. So you spoke highly of your relationship with Costco. So just curious, after the initial selling into Costco, have you seen reorder activity from them? And as far as any other retailers, have you seen new order placements?
Yes. We are seeing reorder placements on a weekly basis with Costco. So we are selling through. We -- obviously, we had to -- if you look at our balance sheet, we've used up a lot of cash for -- and a lot of that was building up Costco inventory, and we're selling through that to Costco. So that's going on.
I would say it's still -- with any retailer, Target has been in place for a while. We've had Target in place, I think, since September of last year or August September, something like that. So Target has been very consistent for us, and we know the cadence, and we know what that business looks like.
I think Costco is still -- we've gone through multiple iterations. We had a discount for a couple of weeks that we agreed to upfront with Costco, and that gave us a lot of sell-through. And you kind of see a little bit of up and down as you go through that process. And so I wouldn't say we know exactly how that's going to go long term, but we have a lot of conversations with them about new products that we're going to put out, different types of protein pop products that they're interested in. And I think that -- I mean, at least the relationship is really good, and I think the opportunity continues.
Okay. And then just quickly to follow up, are you -- as far as other retailers, will you be selling to others in this quarter or in the second half of the year?
Yes. We have already agreed -- we have 9 more retailers, major retailers that we've set up for this year. Some will be in second quarter and some in third quarter, major retailers in the U.S. And so Protein Pop will continue to expand. We are in 500 Walmart stores already, and that's been good. The Walmart buyers like us, and they feel like that's a good product for them. So we hope to expand that, but we are going to be adding more retailers throughout the U.S., yes.
Our next question will come from Ivan Feinseth with Tigress Financial Partners.
Congratulations on the great results and the success with Hiya and Rise. [Kathryn], you give me some insight into your R&D initiatives and where you see some new growth opportunities going forward?
Ivan, it's good to talk with you again. This is Kathryn. Our focus continues to really deepen into women's health and children's health and looking across our brands and the integration of Oola into our direct sales brand. I think that's a very logical place for us to be across all of the channels we're in. You can expect to see us continuing to push further into the real science behind women's health and children's health. We've done a lot of investment in terms of true research and working on clinical research to really understand how we can more meaningfully impact the health for both of those sort of segments of the population.
We also have a strong focus. Obviously, our direct sales business is essential to us, and we have a strong focus on how we can ensure that, that product pipeline is both continually updated as well as streamlined to help people navigate it more efficiently and really get the health benefits that they're seeking in order to sort of achieve what they're looking for. So I would say those are our big focus areas right now, Ivan, so women's, kids and then ensuring that our core product line is updated and streamlined to enable consumer efficiency.
And how about additional focus on gut health, which seems to be like the major focus, the driving of overall health. And also any updates or insight to products in your active nutrition category?
So when we think about gut health, it impacts all segments of humanity. Women have some unique gut health topics that need to be addressed. People tend to think about gut health still in our less developed microbiome-focused markets in terms of just digestion and obviously, the expansion into all possible health benefits beyond digestion and immunity.
For women, you'll see us putting a focus there on what does that look like for women in all of the various aspects of what addressing gut health can do for them holistically, physiologically. Obviously, for children, we have probiotic lines and fiber lines, and those will continue to expand and continue to be leveraged as appropriate across our channels.
Active Nutrition, we are hearing, as there was a reference earlier, a lot of focus on protein and how to help consumers consume protein in ways that are more aligned with their needs and their desired consumption profiles. You can expect to see more products in those categories as well coming to market to really ensure that people are being supported both on their weight loss journeys as well as on their health and sort of muscle building journeys.
And Ivan, this is Brent here. Just to add a little bit more color in terms of the Active Nutrition. In the first quarter of this year, we relaunched new active nutrition shakes, so weight management, weight loss shakes in China. We made an investment into manufacturing equipment, filling equipment in that facility so that we could do it in-house and do it ourselves, and we upgraded our formulas. So that was launched in Q1 with a lot of excitement from our brand partners, and we have a really strong weight management campaign that's currently running there. So it's still a big focus for us, and we'll continue to invest in that area.
This now concludes our question-and-answer session. I would like to turn the floor back over to Andrew Masuda for closing comments.
Thanks for your questions and participation on today's conference call. If you have any remaining questions, please feel free to contact Investor Relations at (801) 954-7210.
Ladies and gentlemen, thank you for your participation. This does conclude today's teleconference. You may disconnect your lines, and have a wonderful day.
USANA Health Sciences, Inc. — Q4 2025 Earnings Call
1. Management Discussion
Greetings, welcome to the USANA Health Sciences Fourth Quarter and Fiscal Year 2025 Earnings Call. [Operator Instructions] Please note, this conference is being recorded.
At this time, I'll now turn the conference over to Andrew Masuda, Director of Investor Relations. Thank you, Andrew. You may now begin.
Thanks, Robin. Good morning, everyone. We appreciate you joining us to review our fourth quarter and fiscal year 2025 results. Today's conference call is being broadcast live via webcast and can be accessed directly from our website at ir.usana.com. Shortly following the call, a replay will be available on our website.
As a reminder, during the course of this conference call, management will make forward-looking statements regarding future events or the future financial performance of our company. Those statements involve risks and uncertainties that could cause actual results to differ perhaps materially from the results projected in such forward-looking statements. Examples of these statements include those regarding our strategies and outlook for fiscal year 2026, uncertainty related to the economic and operating environment around the world and our operations and financial results. We caution you that these statements should be considered in conjunction with disclosures, including specific risk factors and financial data contained in our most recent filings with the SEC.
I'm joined by our Chairman and Chief Executive Officer, Kevin Guest; our Chief Financial Officer, Doug Hekking; our Chief Commercial Officer, Brent Neidig; our Chief Operating Officer, Walter Noot, as well as other executives. Yesterday, after the market closed, we announced our fourth quarter and fiscal year 2025 results and posted our management commentary document on the company's website.
We'll now hear brief remarks from Kevin and Doug before opening the call for questions.
Thank you, Andrew, and good morning, everyone. As we sharpen our strategic focus, and position the company for renewed and sustainable growth, I'm honored to return as Chief Executive Officer, while continuing to serve as Chairman of the Board. I appreciate the Board's confidence in my leadership and its commitment to ensuring continued stability and disciplined execution during this next phase of growth.
As I reassume the role of CEO, I do so with a deep understanding of USANA's strengths and a clear view of the opportunities ahead with the fruition of our strategic plans that we will execute. Having spent more than 3 decades at this company, including 8 years as CEO, I've seen firsthand the power of our science-based products, the dedication of our employees and the resilience of our sales force across the world. These elements form the core of USANA's competitive advantage and establish a solid foundation for the long-term value creation that we intend to deliver.
During my previous tenure, USANA expanded its international footprint, strengthened operational capabilities and achieved record financial results. While this external environment continues to evolve, our strategic pillars remain consistent. Scientific excellence at the center of product innovation, operational discipline and cost efficiency, a high-performing, aligned global sales force and a culture rooted in integrity, resilience and execution.
Over the past several weeks, I've engaged in extensive discussions with our leadership team as well as our brand partners. These conversations reinforce that USANA remains well positioned with strong underlying fundamentals and meaningful opportunities for growth across multiple markets and channels. However, the clear message is that we must move with greater speed, focus relevancy and precision.
As we look ahead, our priorities are straightforward. First, strengthen USANA's global brand positioning by delivering science-backed nutrition through an omnichannel platform and evolving the company's identity from a legacy direct selling business to a modern science-driven nutritional products company.
Second, enhance the customer and brand partner experience to drive retention, loyalty and long-term brand equity. Third, reinvigorate global sales momentum through enhanced field support market-specific strategies and strengthen leadership engagement. Fourth, advance our product innovation pipeline by leveraging our world-class research and science teams to deliver differentiated offerings.
Fifth, improve operational efficiencies across the organization through disciplined cost management and streamlined processes; and six, execute with accountability at every level of the business ensuring our actions translate into measurable sustainable results.
We are committed to delivering shareholder value by focusing on these top priorities. Importantly, our consolidated net sales outlook for fiscal 2026 is for growth of 4% at the midpoint, reflecting confidence in our strategy and our ability to execute. We will also remain focused on long-term strategic execution, not short-term optimization as we strengthen the company for its next chapter of growth.
Our fiscal 2026 operating strategy entails the following: first, expand our omnichannel reach by leveraging USANA's strong nutrition foundation and diversifying distribution channels to access a larger global base of health-conscious consumers and strengthen brand relevance.
Second, advanced product innovation through refreshed branding, alignment with modern consumer usage behaviors and robust pipeline for upgraded and new products launching globally in 2026. Third, accelerate technology modernization by adopting best in practice third-party platforms to improve customer experience, enable scalable growth and drive long-term IT and operational efficiencies.
Fourth, drive higher growth through continued direct-to-consumer expansion, new channel and product launches and entering into additional markets. We are also leveraging USANA's capabilities to improve margins including transitioning to in-house manufacturing to increase speed, efficiency and reduce costs.
Fifth, scale, Rise Wellness performance by building on the strong recent momentum expanding the Rise Bar footprint and accelerating Protein Pop distribution, particularly within major retailers and within club retail channels.
You saw this mission, culture and people have always been at the heart of our success. As we embark on this transition, I am confident in our direction and energized by the opportunities ahead. Together with clarity, discipline and a shared vision, we will position USANA to deliver stronger performance and create enduring value for all stakeholders.
With that, I'll now ask Doug to provide additional color on our fiscal 2026 outlook.
Thanks, Kevin, and good morning, everyone. I'd like to provide some additional color on our fiscal 2026 outlook and the key financial considerations shaping our guidance for the upcoming year. As Kevin mentioned, we're expecting net sales growth at the midpoint of about 4%. The sales growth is being driven by our venture companies, Rise Wellness and Hiya. Note that our outlook reflects a 52-week fiscal year in 2026, which includes one less week of operations when compared to fiscal 2025.
As Kevin indicated in his remarks, we intend to accelerate our technology road map to fundamentally improve how customers experience our brand as well as allow for future benefits in both speed and cost efficiency. This incremental investment has not been factored into our fiscal 2026 outlook at this time. We will provide updated information once the scope, timing and capital requirements of this project are finalized.
Turning to inventory. Inventories increased $35 million or 48% to $107 million at the end of fiscal '25. Approximately 80% of the year-over-year increase was driven by initiatives to support significant growth opportunities at Rise Wellness and Hiya. Let me break this down further. For Rise Wellness, the increase reflects the inventory necessary to support the launch and growth of Protein Pop, particularly retailers like Costco. For Hiya, the inventory increase largely reflects channel expansion, including distribution into Target, international expansion into Canada and the United Kingdom and building raw materials inventory in connection with USANA to begin manufacturing higher products in-house.
Given the growth trajectories of both Rise Wellness and Hiya, we anticipate elevated inventory levels throughout fiscal 2026. Although we will continue to focus on working capital efficiency, our intention is to continue supporting product demand as well as the expansion of distribution channels and geographies for these important brands. We expect Rise Wellness to operate at approximately breakeven in fiscal 2026 while we position the company for future growth thoughtfully scale the business and strengthen long-term revenue and profitability profile.
Let me now touch on our expected effective income tax rate. Our effective tax rate guidance for fiscal 2026 is expected to range between 55% and 60%. The primary challenge we continue to face is a geographic misalignment between revenue generated and costs incurred. This dynamic has been particularly evident in our effective tax rate during the second half of fiscal 2025 and particularly felt with the recognition of certain onetime costs during the period. Execution of our growth strategy as well as targeted cost efficiencies are expected to contribute to a lower effective tax rate in future years.
With that, I'll now turn the call back to Kevin before we open the line for questions.
Thanks, Doug. Let me close by saying this. We believe USANA is in a strong position, and the path ahead is both clear and compelling. Our core business has faced year-over-year sales declines but we are seeing encouraging signs of stabilization as we take the right steps to return the business to growth.
Hiya and Rise Wellness broaden our market and bring new energy to the portfolio while our strategic investments are strengthening the foundation that will support our next phase of expansion. And with a solid financial position, including a strong cash balance and an efficient model that generates healthy cash flow, we have the flexibility to invest thoughtfully execute with confidence and build long-term value.
Put simply, we have the people, the products and the financial strength to win and we're committed to doing exactly that. This, we believe, will deliver sustainable value creation for our shareholders.
I'll now turn the call back to the operator for Q&A.
[Operator Instructions] And the first question is from the line of Anthony Lebiedzinski with Sidoti & Company.
2. Question Answer
It's certainly nice to see the better-than-expected results for the fourth quarter as well as the higher-than-expected EPS guidance for '26 as well. So as we look at the guidance for both revenue and EPS, obviously, you provided revenue guidance in January. But nevertheless, they are pretty wide ranges. Can you just walk us through the different puts and takes as to what you would need to do to get to the top end of the guidance? Are you perhaps assuming a notable improvement in the macro environment? Maybe just kind of walk us through the different puts and takes for revenue and EPS guidance.
Yes. So I think it's easier if we break it down by some of the kind of the key brands we talked about, Anthony. And so with Rise Wellness, they're really on an emerging path. There are some of these orders we have in our back pocket and some are banking on having orders in the back half of the year. And so as we look at Rise, that's kind of the range that we provided, specifically on the sales there.
Hiya is just very, very newly into Canada and will soon be in the U.K. and then launching Target here in April. So there's a lot of activity on the horizon there to go back and bridge that. I think in short, when we look at the revenue kind of equation and kind of the margin profile, I think achieving the top line is going to be the main thing that will help us go back and deliver at the top end of the EPS.
Yes. And Walt -- we have Walter here. Walter, will you just give some color to what Doug said? Walter is on the management team that's in the trenches day to day on some of these things, and I thought I might bring you some added color to hear from Walter on the subject.
Yes. As what Doug was saying, we've got -- we've booked a lot of business on the retail side, but when you look at the inventory buildup, most of that inventory buildup is already committed revenue, which is -- which we've had through these retailers. We've got Target. We're in all the Target stores in the U.S., we're in all the Costco stores now as of last week. And then we've got other major U.S. retailers that we're talking to right now. And so that's really -- as we move forward, we're adding more flavors to the Protein Pop line that's going to go into Target. And then, of course, all the new retailers that are coming in.
So we just see a huge upside, a huge potential for us, but, again, that's why we put such a big range on the guidance. And with Hiya, we're super excited. What we've seen so far in Canada has been really good. We just barely launched that probably in the next couple of weeks, 6, 3 weeks. We're going to see the U.K. go live in April, you see Target go live on the retail side, and that's a stand up that goes in every store.
So we're like we're pretty bullish on both these businesses and the growth of these businesses. And a lot of it's just -- because there's such a range, I mean, the reason that range is there is because you don't know exactly what you're going to do, but Hiya's been such a great brand. The company has spent so much money on marketing and creating so much awareness in the U.S., we think the retail channel is going to be really good for us.
And one of the things that I'm sure of which you all are aware is that the omnichannel strategy is also a diversification of revenue strategy, meaning the more of these succeed, and we're generating money. So it's not disproportionate to China and more locally based that will help our effective tax rate where we're generating income, which is part of our also long-term strategy just to diversify where revenue is being generated because as you could see from what hit us this last quarter, it's pretty significant. And so that's a very real opportunity for us.
Yes. And maybe, Anthony, to kind of go full circle on this. We're still very bullish on our core nutritional business and there are so many opportunities. I think Kevin's initiative to go back and look at technology and advance some of those road maps and really support that team. But I think we're at a time where people want health and wellness products and we make as good as products, as you can find out there. And so we really see these things as enablers moving forward.
Got you. So as we look to update our models here, is there anything that you guys can say -- I mean, obviously, you will have one less week of sales in the fourth quarter, so I realize that. But other than that, I mean, for -- as we look at the business of quarter 1 to 2, 3 and 4, I mean, is there anything to keep in mind as far as -- will the revenue ramp up as the year progresses? Or do we think that it should be more kind of even throughout the year? Anything to point out to as far as the seasonality of the business.
Yes. So seasonality, I think, particularly in our core nutrition business has really, as we evolved and grown in China, has revolved around that Lunar New Year. And it's fairly impactful. And so that market as well as many of our markets in the Asia Pacific region really set up a pretty heavy promotional cadence surrounding that to support the business as we go through there. And so the -- I would say the activity that we see quarter-to-quarter isn't perfectly equal. And so you'll see some ebbs and flows, which we can just give color as the year progresses.
Yes. And I have -- we have Brent Neidig here at the table, who is our Chief Commercial Officer, that also could add some color to what we're seeing from the revenue base as it relates specifically to our core nutritional business. Brent?
Yes. Thanks, Kevin. Doug just highlighted, there is a certain element of seasonality in our core nutritional business, especially with our predominance within the Chinese community. We're currently in Chinese New Year right now and typically leading up to that new year in many of our Chinese markets, specifically in Mainland China, there is a heavier emphasis on promotional activity is many of our brand partners want to stock up on product to provide for gifts and other selling opportunities throughout the Chinese New Year. That's why we typically see a stronger Q1.
And then that momentum starts to escalate into Q2 as well as we have different conventions and events that kick off, both in our first quarter and our second quarter. As we hit Q3, summer season and a lot of our brand partners typically take time off or they go on vacation, they spend time with families, their kids are out of school. So we typically see a lull there. That's what we're expecting, and that's what I'm continuing to expect. And then Q4, people start to get back into action and prepare for the following year. So that's typically the model that I see.
Got you. And then as it relates to Hiya and then Rise, any added color there that you can share?
This is Walter. I don't know how much color I can share. When I look at that business, of course, there's -- it's a growing trend, protein, especially Protein Pop, there's a really strong trend there, and we basically introduced late last year, we really introduced Protein Pop retail. So it's a very new brand, and it's building. And as that brand continues to build, I think we'll continue to see it grow in the retail channel. I don't know exactly what the numbers are going to look like, but we've put some guidance in place and we're feeling really good about where we're going.
Got you. All right. And so -- and it sounds like you also feel good about Hiya as well. So as far as the cost realignment that you guys did in the fourth quarter, can you just help us out as far as how much that lowered your headcount? And then I know you're using some of those cost savings for other things as well. But maybe just -- maybe you can also touch on how to think about gross margins here for '26 as well as your SG&A? Any sort of added color there would be certainly appreciated.
Yes, Anthony. So the total was about 10% of the workforce that was impacted in that cost realignment. Overall, on a net basis after some of the money has been repurposed, we're probably about $10 million or so in savings, maybe $10-plus million in that range. I think a lot of the things these are being repurposed to are very important to the business and executing strategy and stabilizing. But that's -- those would primarily reside in SG&A. I would expect a whole lot in gross margin or cost of sales.
The primary issue you're going to see on a few of our key line items is the mix between the different businesses, right? And so as you see Rise grow, and right now, the -- we talked about them being breakeven this year. They're going to be a little bit -- they'll be at a much thinner gross margin, and so that will kind of give the impression, but we'll break that out accordingly. So you have some optics there as we move forward into the year as well.
Got you. Okay. And then you touched on some of the -- you mentioned technology initiatives that you're working on. I know you're not ready to share specifics. It sounds like it's still something that you're working on. But can you give us a sneak peek as to what you're thinking as far as how impactful that could be as far as some of the changes that you're looking to do on the technology side?
Well -- this is Kevin. From my perspective, the notion of staying relevant in today's world is so important for us and how people interact with our brand and/or brands is very critical and will determine the future growth of our company, I believe. And so I want to focus on the ability to be quick and be nimble. And our traditional approach has been where we build things in-house, and that has served us very well. Strategically, we're going to look at how can we leverage outside resources in a more robust way both in the U.S. as well as internationally.
But I think speed to market and speed to change and the relevance of how people interact will be a big part of the focus of the strategy behind our technology spend, which will allow people to interact in a much more robust way with our brand and our brands across the board.
The other thing we're going to do, which we haven't really spoken much about, is we're going to leverage the knowledge and expertise, for instance, Hiya, they have a great knowledge and expertise in brand awareness. And so how can we utilize some of their expertise and resources to help us leverage the USANA brand and USANA brand awareness. And so as we move forward, that's very kind of high-level fluff and not real detail, but I just -- I am convinced that if we can leverage, especially AI in a way that we see many, many really high-end brands interact and utilize AI, which we aren't to its fullest capacity right now, and it's changing literally every day, and we have to play in that space and be as good at technology and utilizing AI as we are in Nutrition is the goal. I think that's the future of a growth company in our space.
One of the things I'm most excited about is, if you look at the -- I've seen numbers, a global CAGR of about anywhere from 5% to 8% growth in the health and wellness space. Well, that's where we play. We should be on those curves as a company and technology plays a key role in that growth. So that's where my head is at.
The next question comes from the line of Ivan Feinseth with Tigress Financial.
Congratulations on the ongoing success of Hiya and the new Rise Bars, which I sampled at the ICR Conference, and were really delicious and subsequently have purchased them. So I think that's really great.
Going to the technology question for Kevin, what are your focus and thoughts on integrating technology into the consumer health management journey? Recently, another company launched a product that can give you a nutritional absorption reading through your finger. And when I was at the ICR Conference with Doug and Andrew. And Patrick, we were talking about the monitor from [indiscernible] and what gets measured gets managed and the more technology that a consumer can use to give insight to their health and nutrition journey, the more they can see where they need products or creating product opportunities for your company.
So Ivan, thanks for the question. That's a great question. I am highly interested in the utilization of technology and the ability to personalize how a person receives their nutrition and not have it based on a one-size-fits-all approach and moving further into the technology space.
I have our Chief Science Officer here with us, Kathryn Armstrong. Kathryn, do you want to jump in on this real quick with this conversation with Ivan?
Ivan, it's good to talk to you again. So I think for us, we have obviously a focus on integrity and ensuring that everything we provide to our customers through all of our brands meet scientific rigor. And I know all of us have watched with eager anticipation over the past decade and more as these types of devices have been launched and then really struggled to link to clinical efficacy. And it's a lot about behavioral science versus physiological science, as you know.
So are we actively looking at how to help individuals personalize and monitor their health status, of course, we'll continue to do so. And we are partnering to better understand how to advance that in a way that has scientific integrity and ensures our customers are able to apply their spend to true physiological benefit.
[Operator Instructions] Thank you. At this time, this will conclude our question-and-answer session. I'll turn the floor back to Andrew Masuda for closing comments.
Thanks for your questions and participation on today's conference call. If you have any remaining questions, please feel free to contact Investor Relations at (801) 954-7210.
Ladies and gentlemen, this does conclude today's conference. You may disconnect your lines at this time, and have a wonderful day.
USANA Health Sciences, Inc. — Q3 2025 Earnings Call
1. Management Discussion
Greetings, and welcome to the USANA Health Sciences third quarter earnings call. [Operator Instructions] Please note, this conference is being recorded.
I will now turn the conference over to your host, Andrew Masuda, Director of Investor Relations. Thank you. You may begin.
Thanks, Diego, and good morning, everyone. We appreciate you joining us to review our third quarter results. Today's conference call is being broadcast live via webcast and can be accessed directly from our website at ir.usana.com. Shortly following the call, a replay will be available on our website.
As a reminder, during the course of this conference call, management will make forward-looking statements regarding future events or the future financial performance of our company. Those statements involve risks and uncertainties that could cause actual results to differ perhaps materially from the results projected in such forward-looking statements. Examples of these statements include those regarding our strategies and outlook for fiscal year 2025, uncertainty related to the economic and operating environment around the world and our operations and financial results.
We caution you that these statements should be considered in conjunction with disclosures, including specific risk factors and financial data contained in our most recent filings with the SEC.
I'm joined by our President and CEO, Jim Brown; our Chief Financial Officer, Doug Hekking; our Chief Commercial Officer, Brent Neidig; our Chief Operating Officer, Walter Noot; as well as other executives. Yesterday, after the market closed, we announced our third quarter results and posted our management commentary document on the company's website.
We'll now hear brief remarks from Jim before opening the call for questions.
Thank you, Andrew, and good morning, everyone. We continue to execute our comprehensive commercial strategy in the third quarter, which was highlighted by the global rollout of our enhanced compensation plan. While third quarter results were impacted by softer sales and Brand Partner productivity leading up to the Global Convention in August, we are in the initial stages of the full rollout, and I'd like to be clear in saying that I'm encouraged by recent activity we are seeing in the business.
If you recall, we enhanced our compensation plan to ensure USANA is at the forefront of today's evolving and competitive landscape for entrepreneurs. Our commercial strategy includes an enhanced compensation plan, product innovation, updated and refreshed brand story and improved tools to assist with building a business.
The enhanced compensation plan focuses on three key elements: share, grow and lead. This new framework is designed to help our Brand Partners to have greater success in building their sales organization with new Brand Partners and customers in a simple and explainable way. This is particularly relevant today as the desire to earn part-time supplementary income or to earn income on one's own terms is as high as it has ever been.
Our recent changes have systematically addressed the most important features of a competitive compensation plan in this market: simplicity, early earnings potential and competitive pay for performance. We have simplified the plan, made it easier for new people to understand, act and share, improved the earnings capability of our new Brand Partners so that they have the potential to see success faster. And we've enhanced our pay-for-performance criteria, which will more greatly reward those who are doing more of the work.
Simplicity and early success are key requirements of a younger demographic, and early indications are that this offering is resonating with that audience. We are encouraged by our Brand Partners' response to the enhancements and the recent lift we have seen in sales activity and leader productivity. We are seeing improvement across several key metrics, including engagement, as indicated by meeting attendance, Brand Partner attraction and customer acquisition, speed to earnings their first commission and general stickiness of Brand Partners and customers.
Qualitatively, Brand Partners across the world are sharing how these new changes have brought renewed excitement, energy and success to their businesses. Our vision of Brand Partners being a focal point continues to resonate and build trust with these entrepreneurs as they have expressed improved confidence in sharing the opportunity.
During the quarter, we reported an increase in inventories that can be attributed to, in great part, new product introductions to support our growth strategy, increased investments in location of our inventory to support tariff mitigation efforts and working capital investments in our venture companies, Hiya and Rise Bar. We have also begun the process of targeted in-house production for our venture companies. We believe our in-house manufacturing capabilities contribute to better margins, improved control of inventory levels and help to mitigate supply chain risk while providing a meaningful contribution to delivering the highest-quality nutritional products.
Moving on to our other businesses. If you recall, these businesses provide USANA the ability to reach a broader demographic of health and wellness market while providing diversification and strengthening USANA's financial profile. Overall, we're encouraged by the year-to-date sales growth of these entities.
I'll start by sharing an update on our direct-to-consumer business, Hiya. Although Hiya experienced some challenges in top line growth in the third quarter, the company has delivered 26% year-to-date sales growth, putting them on track to deliver another year of record sales. Notably, we have made significant progress on several integration initiatives. In the first half of the year, a large focus was placed on the implementation of a new ERP system and related controls to ensure that Hiya is fully operating as a subsidiary of a public company. There has been significant progress made that we believe will support the Hiya team moving forward.
We have also been working on other areas that provide operational synergies. For example, during the quarter we assisted the team in the transition to a new logistics partner, which is anticipated to drive operational efficiency in the coming year. We also continue to leverage core competencies at USANA, including research and development activities, manufacturing and general operational expertise to support Hiya in the new product formulation, international expansion and cost savings opportunities.
Another example, we anticipate to begin the manufacturing of Hiya products in-house over the next several months, which we anticipate will continue to improve margins in the late second quarter and back half of 2026. Altogether, we're pleased with the progress we've made on all these fronts and continue to expect Hiya to generate double-digit sales growth for the full 2025. The team has several exciting growth initiatives planned for next year, which we will address next quarter when we provide our initial outlook for fiscal 2026.
Rise Bar, which was acquired in 2022, reported record third quarter net sales and year-to-date net sales have increased 169%. Although Rise Bar is still relatively small as a percentage of our sales portfolio, we're very pleased with the progress, including channel expansion and new product offerings that we believe will contribute to strong future sales heading into 2026. We are investing additional resources and working capital as well as leveraging USANA's operational expertise to capitalize on current momentum and to drive long-term growth and efficiencies. We believe there is meaningful growth opportunities in the health and food space over the next several years.
As included in our third quarter earnings release, we reported that we have initiated and are executing a global cost reduction process, including a rightsizing of our workforce. This process will focus on prioritizing top strategic priorities while also targeting efficiencies that support a more agile and adaptable organization moving forward. We expect to incur an estimated onetime charge of $4.7 million in the fourth quarter, which has been reflected in our updated outlook.
In closing, we remain confident that our comprehensive commercial team strategy will position USANA to drive long-term growth in our direct selling business and deliver long-term value for our customers and Brand Partners. Additionally, we are succeeding in our diversification strategy with the growth of Hiya in the children's health and wellness market and the growth of Rise in the healthy foods market. Together, these elements reinforce our positive outlook for the future and our commitment to create lasting value across our portfolio.
With that, I'll now ask the operator to please open the line for questions.
[Operator Instructions] And our first question comes from Anthony Lebiedzinski with Sidoti & Company.
2. Question Answer
So you have stated both in the release and this morning that you have seen a pickup in sales activity and leader productivity in recent weeks, which is encouraging. So can you just kind of walk us through maybe some -- share some additional details as far as the trajectory of your business trends as you went from July through August, September and maybe so far in October, if you could comment on that?
Sure, Anthony. It's Brent. We have seen some promising trends from our new compensation plan that was launched earlier in July. And I think primarily what we've seen is we've seen more engagement and excitement around the offering than we historically have seen over the last couple of years. So it's been quite promising from that perspective.
As Jim mentioned in his notes, we're really trying to focus on the upfront earnings opportunity. We know that as soon as people can engage with USANA, as soon as they see success and that they can see that success sooner on, they're more likely to stay with us longer. And so that's what's really resonated with our field right now and our Brand Partners. And historically, that's somewhat been a challenge over the last couple of years. And as people's expectations have changed in today's marketplace, they've been looking for an easier upfront earnings opportunity, and we feel like we've delivered on that front.
So it's still early. Yet what we've seen in September, now the first couple of weeks in October, all signs are pretty promising, especially from our more mature markets like the United States. We've seen some reengagement from some of our longer tenured Brand Partners, which is really encouraging to see.
Yes. Just a further comment on that. During the quarter, we mentioned we didn't have the best quarter or it didn't meet our expectations. We did the kind of launch at the beginning of July of the compensation enhancement as well as some other stuff for our Brand Partners, and we saw a slowdown at that point in time where people were absorbing and not really getting into the business for a while.
And then we've seen what Brent talked about. The pickup has really been after our Global Convention in August. So it really hit right at the end of August into September. So very promising signs, but again, early yet.
Yes. And Anthony, this is Doug. Just for context, and we talked about a little bit of this in the prerelease. When you roll a lot of information out, as Jim said, it takes some time to process. So we anticipated a little bit of softness as they took time to digest and understand and have some more of these in-person meetings.
And our convention served and that investment there, I think, served as well to be able to have some of those conversations. But we saw maybe a little bit softer than we anticipated and lasted a little bit longer. But as Jim and Brent both indicated, we're pleased by kind of the traction we have now. There's a lot of work to do, but we're definitely leaning into it and working on executing the plan.
All right. That's very helpful context. And I guess that explains why the Americas and Europe region performed relatively better than some of your other regions, I guess, right, as far as looking at the percentage of your sales declines. Is that why? Because they're more mature of those markets?
Well, no, I think -- we had the event. We had some sales at the event. The other thing that you have to recognize is because the Rise Bar has been a relatively small percentage of sales. And because it's been there, we indicate -- you can see in the tables that we include that in the Americas and Europe number. And so part of that contribution -- without a doubt, what Brent said is accurate. But part of that contribution is also from the pickup in performance at Rise Bar as well.
Got it. Okay. And then can you just also talk about the incentives that you plan for the fourth quarter and whether some of those incentives may need to spill over into early '26? Or you think this is just a short-term one quarter event?
Yes. Anthony, we're going to continue to look for strategic opportunities to provide incentives for our Brand Partners. Specifically now, as we've just launched our new compensation offering, it's really important for all of our Brand Partners around the world to understand it, to feel excitement around that offering and to really get going working according to that plan.
So I think it's been indicated already, but we do have some incentives planned for the fourth quarter which should help us land with where we're guiding in terms of revenue. And it certainly will spill over into Q1 of next year just like it always does. We're always looking for opportunities for promotions to incentivize our Brand Partners.
Understood. Okay. And then just switching gears to Hiya. So as I look at the active customer count, that has declined. Can you talk about the reasons for that? And how confident are you that Hiya can get back to growth next year?
Yes. This is Walter. Yes, we're very confident with Hiya. We've had some slowdowns. In the third quarter, we expected more pickup because typically, their business is all DTC and they do a lot of marketing through Meta. And Meta has changed algorithms and so we're trying to figure that out. And we've been through this multiple times with Hiya in the past so we expect that to bounce back. And as Hiya continues to grow through DTC and retail and international expansion, yes, we expect that to continue to grow.
Got it. Okay. And then lastly for me before I pass it on to others. So in terms of just the rightsizing of your organization that you plan to do in the fourth quarter, how should we think about the level of annualized operating cost savings that you plan to achieve with this?
Yes. Anthony, this is Doug. So we're very early in the process. And so one of the components, as Jim mentioned, the rightsizing of staff is part of it. There's far more to it than there. And so I think what we'll look to do because we still got a lot of work and analysis and progress to make, we'll look to comment on that in February more fully. But we definitely expect to go back and see some cost savings and kind of cost reduction as a part of this process. And we'll talk about that in more detail in February.
[Operator Instructions] And our next question comes from Susan Anderson with Canaccord Genuity.
I guess maybe just a follow-up on Hiya. It sounds like as you integrate it further, maybe there's some more efficiencies to be had there. Maybe if you could talk about that a little bit more, I don't know, if you could quantify it and the impact it's going to have to margins at all.
Well, I won't give you all the details as far as -- this is Walter, by the way. I won't give you all the details on quantify. I think we'll have more information in February about that. But specifically, Hiya makes vitamins. That's their #1 product. They also do protein powders. And we have reformulated or formulated their products for our manufacturing process. We've got that ready. So we'll be making all of their vitamins here in-house, which we have all capabilities to do that.
Also as far as operational efficiencies, there's just a lot. We're really good at operations as far as because of the size of our business, and so we're able to absorb a lot of support for supply chain. And they had a 3PL that they were using that we helped them move, transition to a different 3PL. And that reduced our cost by quite a bit and allowed them to be much more efficient.
Okay. Great. That's really helpful. And then maybe if you could just talk a little bit about just the industry in general. Are you seeing any, I guess, slowdown from consumers as it relates to either VMS or wellness purchases? Are they looking for more value maybe than what they were 6 months or a year ago? And I guess maybe if you could talk about it by region as well.
Yes. Susan, to clarify, this is on the broader business, not specifically related to Hiya. Is that accurate?
Correct, yes, just in the industry in general.
Yes. We're a part of some associations that help the industry in general. And quite honestly, the direct selling business has struggled over the past few years, probably since COVID. A lot of direct selling companies are basically enhancing their offerings, making it quicker and easier to earn modest income as well as share products. So we have seen that same struggle over that time period. But I think we're getting there when it comes to what we just offered in July through August of this year, and we're setting ourselves up for the future.
Yes. And definitely, the product or the vitamin side of the business has struggled some. There is a lot of competition out there. And our biggest challenge is to make sure that we can easily show people our competitive offering. And again, our offering is a little bit different than some of the companies out there because of the direct selling industry. We offer fantastic products as well as an opportunity to earn. So that's one of the highlights when we go out there when we look at Hiya and Rise. And that information, I'll let Walter speak to that.
Yes. Hiya is children's vitamins. And the children's vitamin market has been, I would say, there's quite a bit of competition there. But Hiya creates a complete -- a different experience for their customers. And because of that and because they're DTC and because they're all subscription, that business has actually been really, really good for us. And they've been able to take market share from other companies and I think they'll continue to do that. So for the Hiya side, it's been a really good.
Rise is protein powders, bars, RTD, and that business is really, really good for us too, especially with the protein business in the U.S. You just see a huge uptick and huge demand for proteins, and we're capitalizing that with high with Rise. That's why we're seeing such growth.
Yes. And Susan, a little bit more color on kind of just the broader category and what we're seeing with the consumers. We also play in a space where we have what I believe to be the best quality product out there. And one of the commercial team's strategy is get better and better and better at articulating that story so they really understand the value proposition.
We're not a commodity-type product. That's not a place we're going to play. And we're going to continue to differentiate what we're offering and we're going to make sure that we convey that story so consumers understand the differentiation of our products.
Okay. Great. And then I guess maybe if you could just talk about if you think there's opportunity -- Hiya has been pretty successful. The DTC business seem to be doing better. I mean, is there an opportunity, you think, to maybe buy a couple more DTC businesses maybe to tack on to that? Or how are you thinking about kind of like your future strategy?
Yes. This is Jim. You're definitely hitting it. Our future strategy is diversification. We're committed to the direct selling channel. We're going to continue to work on making that grow and be a big engine. As we get cash through our business, we are going to look at other opportunities in M&A or opportunities within the companies that they're there to actually expand within.
So yes, that is part of our strategy. I think diversification will make a stronger USANA and we'll continue down that path. And even if you look at where we've been with direct sales and getting modest growth there just over time with the growth rates of both Hiya and Rise been, we'll see a shift in our overall portfolio of getting more omni-channel and more diversified.
Yes. I would also say kind of given the recent announcement during the fourth quarter, as we look to pivot to be more agile and adaptable and work on some of these cost reductions from a capital allocation priority in the near term, it will be investing in the commercial strategy as the top priority and, as Jim mentioned, kind of our venture companies because we see really good opportunity in both Hiya and Rise. And we continue to evaluate different opportunities. But those, without a doubt, will be our priorities from a capital allocation.
And there are no further questions at this time, so I'll hand the floor back to Andrew Masuda for closing remarks -- actually, one question just popped in. And that question comes from Ivan Feinseth with Tigress Financial Partners.
I have a few questions. As far as now, I see your strategy is to delineate between direct-to-consumer and still your sales marketing channel. But as an example, there's still a lot of confusion about supplements that I feel that your adviser channel can help.
Like everybody is saying the #1 supplement that you should take is magnesium. But there's just tons of different formulations. You should take magnesium formulated with different amino acids or different formulations at night versus the morning. How do you feel your product line could meet some of those demands and that your adviser channel could help consumers better understand that?
Ivan, it's Kathryn. I think the data on magnesium is interesting and still, as we've discussed, a little confusing, right? So when we look at the clinical data and sort of who has been pushing the clinicals and what types of forms have been studied and whether or not there's been a lot of A/B testing of them versus each other, the data there is not consistent and solid.
I think in alignment with USANA's core values, right, we are always prioritizing science and ensuring that our customers and Brand Partners have the best possible options. So we continue to look at different magnesium blends as well as all of the different elements that are important for human health. And we'll continue to look at that and to ensure that the research that's being vetted is being vetted objectively.
And then how do you feel that RFK's Make America Healthy initiative is helping you to create some sales opportunity, getting more people interested in the need for supplements? How are you kind of capitalizing on that both direct-to-consumer and to your sales channels?
Yes. Ivan, this is Jim. I think, in general, we appreciate any direction that shows that vitamins and supplements are very important for people around the world. I mean, even if we look in at some of our other markets, there's initiatives from the government standpoint that we can attach to and educate and give people great offerings to meet the needs.
We talked about this for years. Our diets really aren't hitting the mark and that's why supplements are so important. And I think, over time, people are getting more and more educated and understand that, and that just helps USANA and it helps the whole industry in general.
Like Doug had said a minute ago, the thing that we supply is the best vitamins in the world and we'll continue to do that. We'll always look to see what our customers and Brand Partners need and make additions or adaptations to what we're offering. But I mean, any time you have the government or even other agencies talk about how supplements are needed for your overall balance and diet, it's just a benefit to us. And it -- go ahead, Ivan. Sorry.
For a long time, the government has kind of been a headwind to the supplement industry, and now it really looks like it's going to be a tremendous tailwind led by the Make America Healthy initiative.
Yes, I agree with that. And again, that's just fantastic for the industry. And we've believed that all along. We've been in business 30 years. I can only imagine, I've been with the company right at 20, how difficult it was at the beginning when vitamins were really not looked at positively or there was just no information about it. And our Founder, Dr. Wentz, made the decision to move forward and give us the best product line out there. So yes, again, we'll go along with what's out there, and it's especially helpful when it's positive to the industry.
Thank you. That was our last question. So I'll now hand the floor to Andrew Masuda to close. Thank you.
Thanks, Diego, and thank you all for your questions and participation on today's conference call. If you have any remaining questions, please feel free to contact Investor Relations at (801) 954-7210.
Thank you. And with that, we conclude today's call. All parties may disconnect. Have a good day.
Financial data from USANA Health Sciences, Inc.
Revenue
Revenue is the sum of all sales generated by a company, e.g. for its products or services.
Revenue (TTM) metric explainedDirect Costs
Direct costs are the costs incurred directly in connection with the manufacture of the product or service.
Gross Profit
Gross Profit indicates how much of the revenue remains in the company after deducting direct production costs. If the percentage share of sales is calculated, this is referred to as the gross margin.
Gross Profit metric explainedSelling and Administrative Expenses
Selling, general and administrative expenses (SG&A) include all expenses for marketing and sales as well as the general administration of the company.
Research and Development Expense
Research and development costs (R&D) provide information on how much the company invests in the research and development of its products. The costs are particularly interesting as a percentage of revenue and in comparison to direct competitors.
EBITDA
EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) is the company's earnings before interest, taxes, depreciation and amortization. The EBITDA margin is calculated as a percentage of sales.
Depreciation and Amortization
Depreciation represents reductions in the value of the company's assets (e.g. due to wear and tear on machinery).
EBIT (Operating Income)
EBIT (Earnings Before Interest and Taxes) is the company's profit before interest and taxes, also known as the operating income. The EBIT Margin is calculated as a percentage of sales at
.
Net Profit
Net Profit represents the profit or loss after deduction of all costs.
Net Profit metric explainedStocksGuide Premium
| Apr '26 |
+/-
%
|
||
| Revenue | 926 926 |
6%
6%
100%
|
|
| - Direct Costs | 208 208 |
22%
22%
22%
|
|
| Gross Profit | 718 718 |
2%
2%
78%
|
|
| - Selling and Administrative Expenses | 669 669 |
3%
3%
72%
|
|
| - Research and Development Expense | - - |
-
-
|
|
| EBITDA | 68 68 |
12%
12%
7%
|
|
| - Depreciation and Amortization | 33 33 |
65%
65%
4%
|
|
| EBIT (Operating Income) EBIT | 36 36 |
38%
38%
4%
|
|
| Net Profit | 8.87 8.87 |
75%
75%
1%
|
|
In millions USD.
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USANA Health Sciences, Inc. Stock News
Company Profile
USANA Health Sciences, Inc. develops and manufactures nutritional, personal care and weight-management products. Its product line divided into four categories: Essentials, Optimizers, Foods, and Sense-beautiful science. The Essentials Nutritionals category includes vitamin and mineral supplements that provide a foundation of advanced total body nutrition for every age group. The Optimizers Nutritionals category consists of targeted supplements that support cardiovascular health, skeletal and structural health, and digestive health. The Foods Nutritionals category includes low-glycemic meal replacement shakes, snack bars, and other related products that provide optimal macro-nutrition. The Sense-beautiful science includes premium, science-based, personal care products that support healthy skin and hair by providing topical nourishment, moisturization, and protection. The firm's brand include Procosa and MagneCal D. The company was founded by Myron W. Wentz in September 1992 and is headquartered in Salt Lake City, UT.
StocksGuide Premium
| Head office | United States |
| CEO | Mr. Guest |
| Employees | 1,570 |
| Founded | 1992 |
| Website | www.usana.com |


