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USANA HEALTH SCIENCES INC (USNA)·Q3 2025 Earnings Summary

Executive Summary

  • Q3 2025 net sales were $214 million (+7% YoY) but profitability deteriorated sharply as GAAP diluted EPS fell to -$0.36 and adjusted diluted EPS to -$0.15, driven by softer-than-expected Brand Partner productivity, higher SG&A tied to the Global Convention and compensation plan rollout, and an extraordinary effective tax rate reset; adjusted EBITDA declined to $13.8 million .
  • FY 2025 guidance was cut: consolidated net sales reduced to an “updated estimate” of $920 million (from $920M–$1.0B), GAAP EPS to $0.78 (from $1.50–$2.20), adjusted EPS to $1.73 (from $2.35–$3.00), and adjusted EBITDA to $98 million (from $107–$123 million) .
  • Direct selling Asia Pacific remained weak (Greater China sales down 9% YoY; SAP down 22% YoY), while Americas & Europe grew +8% YoY; Hiya DTC delivered $31 million revenue but experienced sequential softness in customer acquisition and subscribers; management expects Q4 Hiya sales similar to Q3 .
  • Near-term catalysts: Q4 incentives to support adoption of the enhanced compensation plan, a $4.7 million one-time rightsizing charge in Q4, and ongoing in-house manufacturing/integration for Hiya expected to improve margins into late Q2/back-half 2026 .

What Went Well and What Went Wrong

What Went Well

  • Hiya delivered 26% year-to-date sales growth and progressed operational integration (ERP, logistics transition), with USANA preparing to bring Hiya manufacturing in-house to drive efficiencies: “We continue to expect Hiya to generate double-digit sales growth for 2025” .
  • Americas & Europe posted +8% YoY sales growth and +12% sequential growth (a relative bright spot within direct selling) .
  • Global Convention launched several new/upgraded products and an enhanced compensation plan; management is “encouraged by the pickup in sales activity and leader productivity in recent weeks” .

What Went Wrong

  • Profitability collapsed: operating margin fell to 0.6%, adjusted EBITDA dropped 44% YoY; extraordinary tax rate reset (annual ETR increased to 65%; Q3 tax rate 471%) converted modest pretax profit ($1.8M) into a GAAP net loss .
  • Asia Pacific softness: Greater China (-9% YoY), Southeast Asia Pacific (-22% YoY), North Asia (-14% YoY); consolidated active customers fell to 388,000 (-14% YoY) .
  • Hiya DTC sequential softness: net sales and active subscribers declined 7% and 3% respectively; management highlighted lower-than-anticipated customer acquisition in a seasonally strong quarter .

Financial Results

Consolidated Performance vs prior periods and estimates

MetricQ1 2025Q2 2025Q3 2025
Revenue ($USD Millions)$249.539 $235.848 $213.670
GAAP Diluted EPS ($)$0.49 $0.52 -$0.36
Adjusted Diluted EPS ($)$0.73 $0.74 -$0.15
Gross Margin % (Consolidated)79.0% 78.7% 77.2%
Operating Margin % (Consolidated)6.3% 7.1% 0.6%
Adjusted EBITDA ($USD Millions)$29.757 $30.495 $13.783
Revenue Consensus Mean ($USD Millions)243.044*225.195*213.876*
Adjusted EPS Consensus Mean ($)0.70*0.54*-0.15*

Notes: Coverage thin; Primary EPS - # of Estimates = 1 each quarter; Revenue - # of Estimates = 1 each quarter (Q1/Q2/Q3) (values retrieved from S&P Global).

Results vs S&P Global consensus (beats/misses)

  • Revenue: Q1 beat by ~$6.5M; Q2 beat by ~$10.7M; Q3 slight miss by ~$0.2M .
  • Adjusted EPS: Q1 beat by $0.03; Q2 beat by $0.20; Q3 matched at -$0.15 .
    Values retrieved from S&P Global.

Q3 2025 Segment/Geography Breakdown

Segment/RegionNet Sales ($USD Thousands)YoY ChangeCurrency ImpactYoY ex-FX
Greater China (Direct Selling)$92,571 -9.5% $504 -10.0%
Southeast Asia Pacific (Direct Selling)$29,178 -21.7% $393 -22.8%
North Asia (Direct Selling)$17,690 -13.9% -$403 -11.9%
Asia Pacific Total (Direct Selling)$139,439 -12.9% $494 -13.2%
Americas & Europe (Direct Selling)$36,386 -5.2% $72 -5.4%
Hiya (DTC)$30,846 N/A N/A N/A
Other$6,999 +299.0% — +299.0%
Consolidated Total$213,670 +6.7% $566 +6.4%

KPIs and Customer Metrics

KPIQ1 2025Q2 2025Q3 2025
Direct Selling Active Customers (#)459,000 418,000 388,000
Hiya Active Monthly Subscribers (#)224,000 200,400 193,400
Direct Selling Active Brand Partners (#)184,000 172,000 168,000
Direct Selling Active Preferred Customers (#)275,000 246,000 220,000

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Consolidated Net SalesFY 2025$920M–$1,000M $920M (updated estimate) Lowered (range removed; to low end)
Net EarningsFY 2025$29M–$41M $15M Lowered
GAAP Diluted EPSFY 2025$1.50–$2.20 $0.78 Lowered
Adjusted Diluted EPSFY 2025$2.35–$3.00 $1.73 Lowered
Adjusted EBITDAFY 2025$107M–$123M $98M Lowered
Direct Selling Net SalesFY 2025$775M–$840M ~$788M Lowered (to ~mid-low)
Hiya Net SalesFY 2025$145M–$160M ~$132M Lowered
Effective Tax RateFY 202544%–45% (prior outlook) Not provided; YTD ETR revised to 65%; Q3 rate 471% Revised upward (current-year impact)
One-Time ChargeQ4 2025N/A$4.7M rightsizing/resizing New
DividendsFY 2025Not disclosedNot disclosedMaintained (no change disclosed)

Earnings Call Themes & Trends

TopicPrevious Mentions (Q1/Q2 2025)Current Period (Q3 2025)Trend
Direct Selling Compensation Plan & Field ProductivityQ2: Announced enhanced offering and “Brand Partner” terminology, rollout planned in Q3 . Q1: reiterated strategy toward growth .Full rollout; initial slowdown during transition but “pickup in sales activity and leader productivity” post-August Global Convention; Q4 incentives planned .Improving engagement post-launch; execution phase
Hiya Integration & OperationsQ2: Disney partnership; strong YoY growth; seasonal patterns .ERP implementation, logistics transition; plan to begin in-house manufacturing; expect margin improvement late Q2/back-half 2026 .Building synergies; margin uplift expected medium term
Supply Chain & Tariffs/MacroQ1: Monitoring tariffs/trade; inventory build/sourcing diversification .Inventory up to support new products, in-house manufacturing, and tariff mitigation strategies .Ongoing risk management; proactive inventory/sourcing
Regional PerformanceQ1/Q2: Asia Pacific down mid-single to double-digit; Americas & Europe down YoY .Q3: Asia Pacific -13% YoY; Americas & Europe +8% YoY (+12% seq) .Asia under pressure; Americas & Europe stabilizing
Cost Structure & Rightsizing—Initiated global cost alignment; $4.7M Q4 charge; savings details to come in February .Near-term restructuring; focus on agility
Diversification/M&AQ1/Q2: Emphasis on omnichannel growth via Hiya/RiseBar .Management open to further DTC opportunities; RiseBar net sales more than tripled YoY in Q3 .Continued pursuit of diversified growth

Management Commentary

  • “We rolled out our enhanced Brand Partner compensation plan during the third quarter… We are encouraged by the pickup in sales activity and leader productivity in recent weeks.” — Jim Brown, President & CEO .
  • “Short-term profitability was burdened… and a change in the estimated annual effective income tax rate… increased… from 45% to 65%.” — Doug Hekking, CFO .
  • “Hiya… delivered 26% year-to-date sales growth… transition to a new logistics partner… will begin bringing their products in-house over the next several months.” — Management Commentary .
  • “Inventories increased… driven… by new product introductions… bring manufacturing in-house for… Hiya and Rise Bar… and activities to mitigate tariff exposure.” — Management Commentary .

Q&A Highlights

  • Compensation plan adoption: Field engagement improving post-convention; early signs of re-engagement in mature markets like the U.S.; Q4 incentives will continue and spill into Q1 2026 to sustain momentum .
  • Hiya DTC softness drivers: Lower-than-expected customer acquisition in Q3; Meta algorithm changes noted; management expects bounce-back as DTC, retail, and international expansion progress .
  • Cost savings outlook: Rightsizing underway; savings quantification expected in February; plan extends beyond staffing into broader efficiencies .
  • Operational efficiencies for Hiya: In-house manufacturing of vitamins; 3PL transition cut costs and improved efficiency; margin benefits expected starting late Q2 2026 .
  • Strategy and diversification: Commitment to direct selling plus growth in DTC and healthy foods (RiseBar); open to additional DTC acquisitions to broaden omnichannel footprint .

Estimates Context

  • Across Q1–Q3 2025, USANA beat revenue and adjusted EPS consensus in Q1 and Q2, and in Q3 slightly missed revenue (~$0.2M) while matching adjusted EPS at -$0.15. Coverage was thin with one estimate per quarter for both metrics (Primary EPS - # of Estimates = 1; Revenue - # of Estimates = 1) .
    Values retrieved from S&P Global.

Key Takeaways for Investors

  • Near-term setup is challenging: guidance cut materially and Q4 includes a $4.7M one-time charge; monitor Q4 incentives’ effect on field productivity and sequential trends .
  • Asia Pacific remains the core swing factor; watch Greater China/SAP stabilization and whether compensation plan changes translate into improved active customer/Brand Partner metrics .
  • Hiya integration is the medium-term margin lever: ERP/logistics completed, in-house manufacturing to begin; expect incremental margin improvement late Q2/back-half 2026; monitor subscriber growth recovery after Q3 softness .
  • Cost alignment should support margin repair in 2026; management to quantify savings in February—an important catalyst for estimate revisions .
  • Inventory build supports new products and tariff mitigation—beneficial strategically but a working capital headwind; watch conversion as new products roll out globally .
  • Americas & Europe momentum and RiseBar growth indicate diversification benefits; further DTC opportunities may enhance omnichannel profile and reduce reliance on Asia .
  • Valuation and estimate risk skew negative near term given EPS guidance cut and extraordinary tax rate; upside depends on compensation plan adoption, Hiya margin synergy, and cost takeout execution .

Values retrieved from S&P Global.