USANA Health Sciences, Inc. (NYSE: USNA) today announced
financial results for its fiscal third quarter ended September 28,
2024.
Key Financial & Operating Results
- Third quarter net sales were $200 million versus $213 million
during Q3 2023.
- Third quarter diluted EPS was $0.56 as compared with $0.59
during Q3 2023.
- Company updates fiscal year 2024 net sales and diluted EPS
outlook to approximately $850 million and $2.45, respectively
(previously $850 million to $880 million and $2.40 to $2.55).
Q3 2024 Financial Performance
Consolidated Results
Net Sales
$200 million
- No meaningful YOY FX impact
Diluted EPS
$0.56
Active Customers
452,000
“Third quarter operating results reflected continued top line
headwinds across many of our key markets,” said Jim Brown,
President and Chief Executive Officer. “Our sales force continued
to face challenges in attracting new customers as consumer
sentiment remained cautious, including in our largest market,
mainland China. Despite these challenges, we remain confident in
our direction and continue to make progress on the five key
initiatives that underpin our long-term strategy. Our commercial
team, which was reorganized earlier this year, has been executing
on these initiatives to enhance the overall value proposition of
our business to our customers and we are beginning to see results
in several of these areas.
“During the quarter, we continued to prioritize engagement with
our sales leaders, highlighted by our Americas & Europe
Convention in Las Vegas, Nevada during August. Training and
development were key focus areas at this event, with an emphasis on
actionable initiatives to help our sales leaders grow their
businesses. Feedback has been positive and leaders are actively
adopting these new initiatives.
“We have also prioritized our product innovation strategy with
an emphasis on increasing the cadence with which we introduce new
and upgraded premium products relevant to our customers’ needs.
Illustrative of this effort, we launched two new products at our
recent event in Las Vegas: a Celavive Resurfacing Serum and a Whey
Protein Isolate.”
Q3 2024 Regional Results:
Asia Pacific Region
Net Sales
$160 million
- No meaningful YOY FX impact
- 80% of consolidated net sales
Active Customers
360,000
Asia Pacific
Sub-Regions
Greater China
Net Sales
$102 million
- -5% constant currency vs. Q3 2023
Active Customers
243,000
North Asia
Net Sales
$21 million
- -12% constant currency vs. Q3 2023
Active Customers
41,000
Southeast Asia Pacific
Net Sales
$37 million
- -6% constant currency vs. Q3 2023
Active Customers
76,000
Americas and Europe
Region
Net Sales
$40 million
- -6% constant currency vs. Q3 2023
- 20% of consolidated net sales
Active Customers
92,000
Balance Sheet and Share Repurchase Activity
The Company generated $30 million in operating cash flow during
the third quarter and ended the quarter with $365 million in cash
and cash equivalents while remaining debt-free. The Company did not
repurchase any shares during the quarter. As of the end of the
third quarter, the Company had approximately $62 million remaining
under the current share repurchase authorization.
Fiscal Year 2024 Outlook
The Company is updating its net sales and earnings per share
outlook for fiscal year 2024, as follows:
Fiscal Year 2024
Outlook
Target
Previous Range
Consolidated Net Sales
$850 million
$850 - $880 million
Diluted EPS
$2.45
$2.40 - $2.55
“Third quarter net sales were modestly below expectations as we
continue to see downward pressure on customer acquisition and
consumer spending in several key markets, resulting in lower
customer counts and average spend per customer,” said Doug Hekking,
Chief Financial Officer. “We are monitoring the recently-announced
stimulus initiatives in China, but we do not expect them to
meaningfully impact our near-term operating results. Accordingly,
we have adjusted our fiscal 2024 guidance to reflect year-to-date
operating performance as well as promotional activity planned for
the fourth quarter. Notwithstanding the macroeconomic challenges we
have faced in 2024, our business fundamentals remain strong. We’ve
generated $47 million of free cash flow year-to-date and our
balance sheet remains pristine with $365 million of cash and no
debt.”
Management Commentary Document and Conference Call
For further information on the USANA’s operating results, please
see the Management Commentary document, which has been posted on
the Company’s website (http://ir.usana.com) under the Investor
Relations section. USANA’s management team will hold a conference
call and webcast to discuss today’s announcement with investors on
Wednesday, October 23, 2024 at 11:00 AM Eastern Time. Investors
may listen to the call by accessing USANA’s website at
http://ir.usana.com. The call will consist of brief opening
remarks by the Company’s management team, followed by a questions
and answers session.
Non-GAAP Financial Measures
The Company prepares its financial statements using U.S.
generally accepted accounting principles (“GAAP”). Constant
currency net sales, earnings, EPS and other currency-related
financial information (collectively, “Financial Results”) are
non-GAAP financial measures that remove the impact of fluctuations
in foreign-currency exchange rates (“FX”) and help facilitate
period-to-period comparisons of the Company’s Financial Results
that we believe provide investors an additional perspective on
trends and underlying business results. Constant currency Financial
Results are calculated by translating the current period's
Financial Results at the same average exchange rates in effect
during the applicable prior-year period and then comparing this
amount to the prior-year period's Financial Results.
About USANA
USANA develops and manufactures high-quality nutritional
supplements, functional foods and personal care products that are
sold directly to Associates and Preferred Customers throughout the
United States, Canada, Australia, New Zealand, Hong Kong, China,
Japan, Taiwan, South Korea, Singapore, Mexico, Malaysia, the
Philippines, the Netherlands, the United Kingdom, Thailand, France,
Belgium, Colombia, Indonesia, Germany, Spain, Romania, Italy, and
India. More information on USANA can be found at
www.usana.com.
Safe Harbor
This press release contains forward-looking statements within
the meaning of Section 27A of the Securities Act and Section 21E of
the Securities Exchange Act. Our actual results could differ
materially from those projected in these forward-looking
statements, which involve a number of risks and uncertainties,
including: global economic conditions generally, including
continued inflationary pressure around the world and negative
impact on our operating costs, consumer demand and consumer
behavior in general; reliance upon our network of independent
Associates; risk that our Associate compensation plan, or changes
that we make to the compensation plan, will not produce desired
results, benefit our business or, in some cases, could harm our
business; risk associated with governmental regulation of our
products, manufacturing and direct selling business model in the
United States, China and other key markets; potential negative
effects of deteriorating foreign and/or trade relations between or
among the United States, China and other key markets; potential
negative effects from geopolitical relations and conflicts around
the world, including the Russia-Ukraine conflict and the conflict
in Israel; compliance with data privacy and security laws and
regulations in our markets around the world; potential negative
effects of material breaches of our information technology systems
to the extent we experience a material breach; material failures of
our information technology systems; adverse publicity risks
globally; risks associated with commencing operations in India and
future international expansion and operations; uncertainty relating
to the fluctuation in U.S. and other international currencies; and
the potential for a resurgence of COVID-19, or another pandemic, in
any of our markets in the future and any related impact on consumer
health, domestic and world economies, including any negative impact
on discretionary spending, consumer demand, and consumer behavior
in general. The contents of this release should be considered in
conjunction with the risk factors, warnings, and cautionary
statements that are contained in our most recent filings with the
Securities and Exchange Commission. The forward-looking statements
in this press release set forth our beliefs as of the date hereof.
We do not undertake any obligation to update any forward-looking
statement after the date hereof or to conform such statements to
actual results or changes in the Company’s expectations, except as
required by law.
USANA HEALTH SCIENCES, INC.
AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share data) (unaudited)
Quarter Ended
September 28,
2024
September 30,
2023
Net sales
$
200,221
$
213,365
Cost of sales
39,257
42,529
Gross profit
160,964
170,836
Operating expenses:
Associate incentives
84,068
89,926
Selling, general and administrative
61,295
63,303
Total operating expenses
145,363
153,229
Earnings from operations
15,601
17,607
Other income (expense):
Interest income
3,142
2,733
Interest expense
(49
)
(43
)
Other, net
(86
)
234
Other income (expense), net
3,007
2,924
Earnings before income taxes
18,608
20,531
Income taxes
8,001
9,184
Net earnings
$
10,607
$
11,347
Earnings per common share
Basic
$
0.56
$
0.59
Diluted
$
0.56
$
0.59
Weighted average common shares
outstanding
Basic
19,078
19,245
Diluted
19,083
19,372
USANA HEALTH SCIENCES, INC.
AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS (in
thousands) (unaudited)
As of September 28,
2024
As of December 30,
2023
ASSETS
Current assets
Cash and cash equivalents
$
364,889
$
330,420
Inventories
63,984
61,454
Prepaid expenses and other current
assets
22,318
25,872
Total current assets
451,191
417,746
Property and equipment, net
98,033
99,814
Goodwill
17,196
17,102
Intangible assets, net
29,237
29,919
Deferred tax assets
16,823
13,284
Other assets*
58,828
54,892
Total assets
$
671,308
$
632,757
LIABILITIES AND STOCKHOLDERS'
EQUITY
Current liabilities
Accounts payable
$
7,041
$
10,070
Line of credit - short term
—
786
Other current liabilities
107,738
107,989
Total current liabilities
114,779
118,845
Deferred tax liabilities
4,727
4,552
Other long-term liabilities
18,715
12,158
Stockholders' equity
533,087
497,202
Total liabilities and stockholders'
equity
$
671,308
$
632,757
*Other assets include noncurrent
inventories of $2,938 and $3,128 as of 28-Sep-24 and 30-Dec-23,
respectively. Total inventories were $66,922 and $64,582 as of
28-Sep-24 and 30-Dec-23, respectively.
USANA HEALTH SCIENCES, INC.
AND SUBSIDIARIES SALES BY REGION (in thousands) (unaudited)
Quarter Ended
Change from prior
year
Percent change
Currency impact on
sales
% change excluding
currency impact
September 28, 2024
September 30, 2023
Asia Pacific
Greater China
$
102,261
51.1
%
$
106,609
50.0
%
$
(4,348
)
(4.1
%)
$
865
(4.9
%)
Southeast Asia Pacific
37,267
18.6
%
$
39,151
18.3
%
(1,884
)
(4.8
%)
561
(6.2
%)
North Asia
20,541
10.2
%
$
24,244
11.4
%
(3,703
)
(15.3
%)
(721
)
(12.3
%)
Asia Pacific Total
160,069
79.9
%
170,004
79.7
%
(9,935
)
(5.8
%)
705
(6.3
%)
Americas and Europe
40,152
20.1
%
43,361
20.3
%
(3,209
)
(7.4
%)
(727
)
(5.7
%)
$
200,221
100.0
%
$
213,365
100.0
%
$
(13,144
)
(6.2
%)
$
(22
)
(6.2
%)
USANA HEALTH SCIENCES,
INC. AND SUBSIDIARIES ACTIVE ASSOCIATES AND ACTIVE PREFERRED
CUSTOMERS BY REGION (unaudited)
Active Associates by
Region(1)
(unaudited)
As of September 28,
2024
As of September 30,
2023
Asia Pacific:
Greater China
65,000
34.6
%
69,000
34.0
%
Southeast Asia Pacific
52,000
27.6
%
55,000
27.1
%
North Asia
28,000
14.9
%
33,000
16.2
%
Asia Pacific Total
145,000
77.1
%
157,000
77.3
%
Americas and Europe
43,000
22.9
%
46,000
22.7
%
188,000
100.0
%
203,000
100.0
%
Active Preferred Customers by
Region(2)
(unaudited)
As of September 28,
2024
As of September 30,
2023
Asia Pacific:
Greater China
178,000
67.4
%
161,000
61.7
%
Southeast Asia Pacific
24,000
9.1
%
28,000
10.7
%
North Asia
13,000
4.9
%
16,000
6.1
%
Asia Pacific Total
215,000
81.4
%
205,000
78.5
%
Americas and Europe
49,000
18.6
%
56,000
21.5
%
264,000
100.0
%
261,000
100.0
%
(1)
Associates are independent distributors of
our products who also purchase our products for their personal use.
We only count as active those Associates who have purchased from us
any time during the most recent three-month period, either for
personal use or resale.
(2)
Preferred Customers purchase our products
strictly for their personal use and are not permitted to resell or
to distribute the products. We only count as active those Preferred
Customers who have purchased from us any time during the most
recent three-month period. China utilizes a Preferred Customer
program that has been implemented specifically for that market.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20241022996115/en/
Investor contact: Andrew Masuda Investor Relations (801)
954-7201 investor.relations@usanainc.com
Media contact: (801) 954-7280 media@usanainc.com
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