On July 23, 2024, Usana Health Sciences Inc (USNA, Financial) released its 8-K filing detailing financial results for the fiscal second quarter ended June 29, 2024. Usana Health Sciences Inc is a U.S.-based company engaged in developing, manufacturing, and selling science-based nutritional and personal-care products through direct selling. The company operates globally, including in Asia-Pacific, the Americas, and Europe.
Q2 2024 Financial Performance
Usana Health Sciences Inc reported net sales of $213 million for Q2 2024, an 11% decrease compared to $238 million in Q2 2023. The company's diluted earnings per share (EPS) came in at $0.54, down 39% from $0.89 in the same period last year. These results fell short of analyst estimates, which projected quarterly earnings per share of $0.65 and revenue of $221.03 million.
Active customer count also saw a decline, with 468,000 active customers, representing a 4% decrease year-over-year and a 5% sequential decline. The company attributed these results to ongoing macroeconomic pressures affecting consumer spending in key markets.
“Second quarter operating results were below our expectations,” said Jim Brown, President and Chief Executive Officer. “Ongoing macroeconomic pressures in several of our key markets continue to impact consumer spending. This in turn creates challenges in our ability to attract and engage new customers and generate sales momentum.”
Regional Performance
In the Asia Pacific region, which accounts for 80% of consolidated net sales, the company reported $171 million in net sales, a 12% decrease from Q2 2023. The Greater China sub-region saw a 10% decline in net sales to $116 million, while North Asia experienced a 23% drop to $20 million. The Americas and Europe region reported net sales of $42 million, a 5% decrease from the previous year.
Balance Sheet and Cash Flow
Usana Health Sciences Inc generated $8 million in operating cash flow during the second quarter and ended the period with $332 million in cash and cash equivalents, remaining debt-free. The company did not repurchase any shares during the quarter and has approximately $62 million remaining under the current share repurchase authorization.
Fiscal Year 2024 Outlook
The company updated its fiscal year 2024 outlook, revising net sales to a range of $850 million to $880 million, down from the previous range of $850 million to $920 million. The diluted EPS outlook was also adjusted to a range of $2.40 to $2.55, from the earlier range of $2.40 to $3.00.
“While we anticipated lower sequential operating results following a successful promotional period in the first quarter, lower than anticipated active customer counts negatively impacted our second quarter results,” said Doug Hekking, Chief Financial Officer. “Additionally, the strengthening of the U.S. dollar created downward pressure on both net sales and operating margin during the quarter.”
Income Statement Highlights
| Metric | Q2 2024 | Q2 2023 |
|---|---|---|
| Net Sales | $213 million | $238 million |
| Gross Profit | $172.5 million | $194.9 million |
| Operating Expenses | $154.7 million | $170.5 million |
| Net Earnings | $10.4 million | $17.3 million |
| Diluted EPS | $0.54 | $0.89 |
Analysis
Usana Health Sciences Inc's Q2 2024 performance highlights the challenges posed by macroeconomic pressures and currency fluctuations. The decline in net sales and EPS underscores the impact of reduced consumer spending and a stronger U.S. dollar. Despite these challenges, the company's strong balance sheet, with substantial cash reserves and no debt, provides a solid foundation for navigating the current economic environment.
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Explore the complete 8-K earnings release (here) from Usana Health Sciences Inc for further details.
