USANA HEALTH SCIENCES INC Quarterly Report Released - Here’s What You Should Know

USANA Health Sciences, Inc. Quarterly Summary – Period Ended September 27, 2025

Financial Performance and Highlights

• Net sales for Q3 2025 increased by 6.7% to $213.7 million compared to $200.2 million for Q3 2024. For the nine months ended September 27, 2025, net sales were $699.1 million, up 9.1% from $640.9 million in the prior year period. Growth was largely driven by the Hiya acquisition, with Hiya contributing $30.8 million for the quarter and $101.9 million year-to-date.
• Net loss attributable to USANA for Q3 2025 was $(6.5) million, versus net earnings of $10.6 million in Q3 2024. Year-to-date net earnings attributable to USANA totaled $12.5 million, down sharply from $37.6 million in the prior-year period.
• Diluted (loss) earnings per share were $(0.36) for Q3 2025 and $0.67 for the nine months ended September 27, 2025, compared to $0.56 and $1.96 for the same periods in 2024.
• Gross margin declined to 77.2% in Q3 2025 from 80.4% in the prior-year quarter, and to 78.3% for the nine months ended September 27, 2025 versus 80.9% year-to-date 2024.
• Operating profits fell significantly: earnings from operations for Q3 2025 were $1.2 million (0.6% of sales) versus $15.6 million (7.8% of sales) in Q3 2024. For the nine months ended September 27, 2025, operating profit was $33.6 million (4.8% of sales) compared to $58.1 million (9.1%) in the prior year.
• The effective tax rate soared to 65.0% year-to-date from 43.0% in the prior year, contributing to lower net earnings.

Segment & Geographic Performance

• Direct selling segment sales declined 11.4% for the quarter and 7.9% year-to-date due to weaker Brand Partner productivity and lower customer counts, especially in Asia Pacific.
• Asia Pacific net sales dropped 12.9% in Q3 (to $139.4 million) and 7.7% year-to-date (to $476.1 million), with notable declines in Greater China (Q3: -9.5%), Southeast Asia Pacific (Q3: -21.7%), and North Asia (Q3: -13.9%). China specifically accounted for $82.6 million in Q3 sales (down from $91.3 million prior year).
• Americas and Europe sales (which includes Hiya) increased to $74.2 million in Q3 (from $40.2 million in 2024), but direct selling net sales in these regions declined as Hiya replaced a significant portion of this growth. U.S. direct sales were $56.9 million in Q3.
• Hiya direct-to-consumer contributed 14.4% of consolidated Q3 sales and 14.6% for the nine months, with children’s multivitamins and probiotics as lead products.

Customer Trends

• Total active customers in the direct selling segment decreased 14.2% year-over-year, from 452,000 to 388,000. Asia Pacific customers declined 14.4%, and Americas and Europe direct selling customers declined 13.0%.
• Hiya’s active subscriber base, not directly comparable to direct selling metrics, was cited as a key growth point.

Balance Sheet & Cash Flow

• Cash and cash equivalents declined to $145.3 million at September 27, 2025, from $181.8 million at year-end 2024, primarily due to increased inventories ($90.8 million from $69.7 million) and significant share repurchases ($27.5 million for the period).
• Net cash provided by operating activities was $25.7 million for the first nine months of 2025, down from $55.2 million the previous year.
• As of quarter-end, no outstanding balance remained on the $75 million revolving credit facility (previous year-end: $23 million outstanding).
• Goodwill and intangible assets stood at $282.4 million, related principally to recent acquisitions, including Hiya.

Risks and Strategic Considerations

• Key risks: heavy reliance on direct selling model and regulatory scrutiny, declining recurring customer base, high exposure to economic and geopolitical volatility especially in Asia, increased costs from Hiya integration, significant exposure to foreign currency fluctuation, and continued pressure on gross margins.
• The sharp increase in the effective tax rate and decreased profitability amid higher operating expenses post-acquisition are concerns for investors.
• Significant decline in Brand Partner productivity and customer counts may signal ongoing business model challenges.
• The company is responding with a company-wide cost alignment process initiated in Q4 2025.
• Continued share repurchase activity: $33.97 million authorized for future repurchases as of the end of Q3 2025.

Conclusion USANA Health Sciences delivered higher consolidated sales due to acquisitions but is experiencing margin compression, increased expenses, a higher tax rate, and a declining traditional customer base. The strategic focus on direct-to-consumer via Hiya helps mitigate some risk but integration, regulatory, and operational headwinds remain significant. Liquidity remains strong but sustained profitability will depend on the success of cost realignment and the stabilization of core direct selling operations.

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