USANA Health Sciences, Inc. (NYSE: USNA) today announced
financial results for its fiscal first quarter ended March 30,
2024.
Key Financial & Operating Results
- First quarter net sales were $228 million versus $248 million
during Q1 2023, and increased 2% sequentially in constant
currency.
- First quarter diluted EPS was $0.86 as compared with $0.95
during Q1 2023.
- Company reiterates fiscal year 2024 net sales and diluted EPS
outlook of $850 million to $920 million and $2.40 to $3.00.
Q1 2024 Financial Performance
Consolidated Results
Net Sales
$228 million
- -5% constant currency vs. Q1 2023
- +2% constant currency sequentially
- -$7 million YOY FX impact, or -3%
Diluted EPS
$0.86
Active Customers
494,000
“Our top line results during the first quarter were driven by a
successful sales incentive in mainland China, which helped counter
the seasonal slowdown that we experience during the Lunar New Year
holiday,” said Jim Brown, President and Chief Executive Officer.
“This sales incentive helped us generate 15% year-over-year active
customer growth in our largest market, as well as year-over-year
and sequential quarter sales growth. Notwithstanding our solid
performance in China, our first quarter results in other key
markets did not meet internal expectations and we are actively
working to accelerate our business in these markets during
2024.
“During the first quarter we focused on actively engaging with
our Associate leaders across the world through several live annual
kickoff events, meetings, and trainings. Moreover, early in the
second quarter, we hosted both our China National Sales Meeting in
Xiamen, China and our Asia Pacific Convention in Kuala Lampur,
Malaysia. Attendance at both events was robust and our executive
team and Associate leaders came away from both events with
increased excitement and motivation to grow their businesses during
2024. We will host additional Associate events throughout the year;
all intended to drive further engagement with and productivity from
our Associate leaders.
“We also completed our first full quarter of operations in India
and we remain excited and optimistic about this important market.
We continue to work closely with our local leadership team to
expand and build our presence throughout the country. Although we
expect its contribution to be small in this first year, we have
high expectations for steady and long-term growth in India.”
Q1 2024 Regional Results:
Asia Pacific Region
Net Sales
$185 million
- -3% constant currency vs. Q1 2023
- 81% of consolidated net sales
Active Customers
395,000
Asia Pacific
Sub-Regions
Greater China
Net Sales
$128 million
- +7% constant currency vs. Q1 2023
Active Customers
274,000
North Asia
Net Sales
$21 million
- -24% constant currency vs. Q1 2023
Active Customers
45,000
Southeast Asia Pacific
Net Sales
$36 million
- -19% constant currency vs. Q1 2023
Active Customers
76,000
Americas and Europe
Region
Net Sales
$43 million
- -14% constant currency vs. Q1 2023
- 19% of consolidated net sales
Active Customers
99,000
Balance Sheet and Share Repurchase Activity
The Company generated $18 million in operating cash flow during
first quarter and ended the quarter with $328 million in cash and
cash equivalents while remaining essentially debt-free. The Company
repurchased 194,000 shares for a total of $9 million during the
quarter. As of March 30, 2024, the Company had approximately $62
million remaining under the current share repurchase
authorization.
Fiscal Year 2024 Outlook
The Company is reiterating its net sales and earnings per share
outlook for fiscal year 2024, as follows:
Fiscal Year 2024
Outlook
Range
Consolidated Net Sales
$850 - $920 million
Diluted EPS
$2.40 - $3.00
“Strength in our mainland China operations carried our first
quarter results,” said Doug Hekking, Chief Financial Officer. “This
performance helped offset softness in many other markets where we
continue to face a challenging operating environment highlighted by
ongoing inflationary pressures.”
Mr. Hekking continued, “We remain committed to engaging with
Associate leaders throughout each of our markets and plan to offer
additional market-specific incentives throughout the year to
improve sales and customer activity levels.”
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, May 1, 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 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
March 30, 2024
April 1, 2023
Net sales
$
227,800
$
248,360
Cost of sales
43,069
48,519
Gross profit
184,731
199,841
Operating expenses:
Associate incentives
95,758
106,070
Selling, general and administrative
64,300
66,926
Total operating expenses
160,058
172,996
Earnings from operations
24,673
26,845
Other income (expense):
Interest income
2,676
1,775
Interest expense
(52
)
(31
)
Other, net
(186
)
(88
)
Other income (expense), net
2,438
1,656
Earnings before income taxes
27,111
28,501
Income taxes
10,574
10,118
Net earnings
$
16,537
$
18,383
Earnings per common share
Basic
$
0.86
$
0.95
Diluted
$
0.86
$
0.95
Weighted average common shares
outstanding
Basic
19,174
19,283
Diluted
19,302
19,328
USANA HEALTH SCIENCES, INC.
AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE
SHEETS
(in thousands)
(unaudited)
As of March 30,
2024
As of December 30,
2023
ASSETS
Current assets
Cash and cash equivalents
$
328,336
$
330,420
Inventories
60,870
61,454
Prepaid expenses and other current
assets
31,864
25,872
Total current assets
421,070
417,746
Property and equipment, net
98,186
99,814
Goodwill
16,902
17,102
Intangible assets, net
29,105
29,919
Deferred tax assets
11,347
13,284
Other assets*
52,665
54,892
Total assets
$
629,275
$
632,757
LIABILITIES AND STOCKHOLDERS'
EQUITY
Current liabilities
Accounts payable
$
8,266
$
10,070
Line of credit - short term
1,320
786
Other current liabilities
103,045
107,989
Total current liabilities
112,631
118,845
Deferred tax liabilities
5,113
4,552
Other long-term liabilities
11,543
12,158
Stockholders' equity
499,988
497,202
Total liabilities and stockholders'
equity
$
629,275
$
632,757
*Other assets include noncurrent inventories of $2,893 and
$3,128 as of 30-Mar-24 and 30-Dec-23, respectively. Total
inventories were $63,763 and $64,582 as of 30-Mar-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
March 30, 2024
April 1, 2023
Asia Pacific
Greater China
$
127,615
56.0
%
$
123,820
49.9
%
$
3,795
3.1
%
$
(5,396
)
7.4
%
Southeast Asia Pacific
36,065
15.9
%
$
46,286
18.6
%
(10,221
)
(22.1
%)
(1,495
)
(18.9
%)
North Asia
21,421
9.4
%
$
29,608
11.9
%
(8,187
)
(27.7
%)
(987
)
(24.3
%)
Asia Pacific Total
185,101
81.3
%
199,714
80.4
%
(14,613
)
(7.3
%)
(7,878
)
(3.4
%)
Americas and Europe
42,699
18.7
%
48,646
19.6
%
(5,947
)
(12.2
%)
635
(13.5
%)
$
227,800
100.0
%
$
248,360
100.0
%
$
(20,560
)
(8.3
%)
$
(7,243
)
(5.4
%)
USANA HEALTH SCIENCES, INC.
AND SUBSIDIARIES
ACTIVE ASSOCIATES AND ACTIVE
PREFERRED CUSTOMERS BY REGION
(unaudited)
Active Associates by
Region(1)
(unaudited)
As of March 30,
2024
As of April 1,
2023
Asia Pacific:
Greater China
71,000
36.1
%
74,000
34.1
%
Southeast Asia Pacific
51,000
25.9
%
61,000
28.1
%
North Asia
30,000
15.2
%
35,000
16.1
%
Asia Pacific Total
152,000
77.2
%
170,000
78.3
%
Americas and Europe
45,000
22.8
%
47,000
21.7
%
197,000
100.0
%
217,000
100.0
%
Active Preferred Customers by
Region(2)
(unaudited)
As of March 30,
2024
As of April 1,
2023
Asia Pacific:
Greater China
203,000
68.3
%
168,000
61.3
%
Southeast Asia Pacific
25,000
8.4
%
29,000
10.6
%
North Asia
15,000
5.1
%
19,000
6.9
%
Asia Pacific Total
243,000
81.8
%
216,000
78.8
%
Americas and Europe
54,000
18.2
%
58,000
21.2
%
297,000
100.0
%
274,000
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/20240430764505/en/
Investor contact:
Andrew Masuda Investor Relations (801) 954-7201
investor.relations@usanainc.com
Media contact:
Amy Haran Public Relations (801) 954-7280
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