USANA Health Sciences(USNA) - 2025 Q2 - Quarterly Results

Q2 2025 Financial Highlights USANA's Q2 2025 saw consolidated net sales rise 11% to $236 million, with GAAP net earnings declining but adjusted diluted EPS growing 36% Q2 2025 Financial Performance vs. Q2 2024 | Metric | Q2 2025 | YoY Change | Sequential Change | | :--- | :--- | :--- | :--- | | Net Sales | $236 million | +11% | -5% | | Net Earnings | $9.7 million | -7% | +3% | | Diluted EPS | $0.52 | -4% | +6% | | Adjusted Diluted EPS | $0.74 | +36% | +1% | | Adjusted EBITDA | $30.5 million | +13% | +2% | - Direct selling Active Customers decreased to 418,000 from 468,000 in the prior year, while the newly acquired Hiya business reported 200,400 Active Monthly Subscribers[4] - Management confirmed that the business performed in line with expectations and maintained the fiscal 2025 outlook[5] Management Commentary and Strategy Management is implementing a new commercial strategy for direct sales, rebranding members as 'Brand Partners,' while the Hiya DTC business shows strong growth and a new Disney partnership - The company is rolling out a new commercial strategy for its direct sales business, which involves enhanced sales incentives, a simplified model, improved business support, and refreshed brand messaging[6] - The terminology for members of the direct sales business has been changed to "Brand Partner"[6] - The Hiya business demonstrated strong top-line growth and improved profitability, launching a new partnership with Disney featuring special edition Lion King and Princesses branded multivitamins[7] Business Segment & Regional Performance Direct selling sales declined across all regions, totaling $199.1 million, while the Hiya direct-to-consumer segment generated $34 million in net sales Direct Selling Regional Results Q2 2025 Direct Selling Performance by Region (YoY) | Region | Net Sales (Millions) | YoY Change | Active Customers (Thousands) | YoY Change | | :--- | :--- | :--- | :--- | :--- | | Asia Pacific | $163 | -4% | 336 | -9% | | Greater China | $113 | -2% | 231 | -8% | | North Asia | $17 | -13% | 37 | -12% | | Southeast Asia Pacific | $33 | -7% | 68 | -12% | | Americas and Europe | $39 | -8% | 82 | -17% | Hiya Direct-to-Consumer Results Q2 2025 Hiya Performance | Metric | Value | | :--- | :--- | | Net Sales | $34 million | | Active Monthly Subscribers | 200,400 | Financial Position and Capital Allocation USANA maintained a strong balance sheet with $151 million cash and no debt, generating $13 million in operating cash flow and repurchasing $15 million in shares - Generated $13 million in operating cash flow during the second quarter[11] - Ended the quarter with $151 million in cash and cash equivalents and zero debt[11] - Repurchased 528,000 shares for $15 million, with approximately $34 million remaining under the current share repurchase authorization[11] Fiscal Year 2025 Outlook USANA reiterated its FY2025 outlook, projecting consolidated net sales of $920 million to $1.0 billion, driven by Hiya growth despite direct sales promotional costs Fiscal Year 2025 Guidance | Metric | Range | | :--- | :--- | | Consolidated Net Sales | $920 million to $1.0 billion | | Net Earnings | $29 million to $41 million | | Diluted EPS | $1.50 to $2.20 | | Adjusted Diluted EPS | $2.35 to $3.00 | | Adjusted EBITDA | $107 million to $123 million | - The outlook anticipates net sales from the direct selling business of $775 million to $840 million[15] - Net sales from Hiya are projected to be $145 million to $160 million, reflecting significant year-over-year growth of 29% to 42%[15] - The outlook includes an effective tax rate of 44.0% to 45.0% and accounts for fiscal 2025 being a 53-week year[15] Non-GAAP Financial Measures & Reconciliations USANA provides non-GAAP measures like Adjusted EBITDA and Adjusted Diluted EPS, excluding acquisition-related costs, to offer a clearer view of core operational performance - Adjusted Diluted EPS is a non-GAAP measure that excludes acquisition-related costs like transaction costs, integration expenses, and amortization of intangible assets[16][20] - Adjusted EBITDA is a non-GAAP measure that adjusts net earnings for interest, taxes, depreciation, amortization, non-cash share-based compensation, and transaction/integration costs for the Hiya acquisition[17][19] Q2 2025 GAAP to Non-GAAP Reconciliation Highlights | Metric | GAAP | Adjustments | Non-GAAP (Adjusted) | | :--- | :--- | :--- | :--- | | Net Earnings (attributable to USANA) | $9.7 million | +$4.1 million | $13.7 million | | Diluted EPS | $0.52 | +$0.22 | $0.74 | Financial Statements The condensed consolidated financial statements detail performance, showing gross profit at $185.7 million, earnings from operations at $16.7 million, total assets at $734.5 million, and total liabilities at $148.9 million Condensed Consolidated Statement of Operations (Q2 2025 vs Q2 2024, in thousands) | Line Item | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | Net sales | $235,848 | $212,869 | | Gross profit | $185,664 | $172,536 | | Earnings from operations | $16,718 | $17,840 | | Net earnings attributable to USANA | $9,655 | $10,432 | Condensed Consolidated Balance Sheet (As of June 28, 2025, in thousands) | Line Item | Amount | | :--- | :--- | | Cash and cash equivalents | $151,338 | | Total current assets | $261,866 | | Total assets | $734,526 | | Total current liabilities | $121,625 | | Total stockholders' equity | $531,060 | - Total Active Brand Partners decreased from 193,000 in Q2 2024 to 172,000 in Q2 2025, while Total Active Preferred Customers decreased from 275,000 to 246,000 over the same period[37][38]