USANA's third quarter results were met with a negative market reaction, as investors responded to a significant reduction in full-year guidance and ongoing operational pressures. Management attributed the quarter’s performance to the global launch of an enhanced compensation plan and noted initial softness in sales and Brand Partner productivity as the field adapted to these changes. CEO Jim Brown described the transition period as challenging, stating, “We didn’t have the best quarter or it didn’t meet our expectations,” but emphasized encouraging signs of improved engagement and activity in recent weeks. The company also highlighted increased inventory levels tied to new product launches and supply chain adjustments.
Is now the time to buy USNA? Find out in our full research report (it’s free for active Edge members).
USANA (USNA) Q3 CY2025 Highlights:
- Revenue: $213.7 million vs analyst estimates of $213.9 million (6.7% year-on-year growth, in line)
- Adjusted EPS: -$0.15 vs analyst estimates of -$0.15 (in line)
- Adjusted EBITDA: $14.59 million vs analyst estimates of $13.78 million (6.8% margin, 5.8% beat)
- The company dropped its revenue guidance for the full year to $920 million at the midpoint from $960 million, a 4.2% decrease
- Management lowered its full-year Adjusted EPS guidance to $1.73 at the midpoint, a 35.3% decrease
- EBITDA guidance for the full year is $98 million at the midpoint, above analyst estimates of $96.74 million
- Operating Margin: 0.6%, down from 7.8% in the same quarter last year
- Market Capitalization: $371.5 million
While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.
Our Top 5 Analyst Questions From USANA’s Q3 Earnings Call
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Anthony Lebiedzinski (Sidoti & Company) asked about the sales trajectory following the new compensation plan rollout. Chief Commercial Officer Brent Neidig explained that engagement and activity improved post-Global Convention, especially in mature markets, while CEO Jim Brown added that adjustment to the changes created an initial sales slowdown.
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Anthony Lebiedzinski (Sidoti & Company) inquired about planned Brand Partner incentives. Neidig confirmed ongoing strategic incentives for the fourth quarter and noted that such promotions would likely extend into early next year to support adoption of the new compensation plan.
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Anthony Lebiedzinski (Sidoti & Company) questioned Hiya’s customer growth after a decline in active customers. Chief Operating Officer Walter Noot attributed the softness to changes in digital marketing algorithms and expressed confidence in a rebound as Hiya continues DTC and retail expansion.
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Susan Anderson (Canaccord Genuity) asked about margin improvements from Hiya integration. Noot cited cost efficiencies from in-house manufacturing and logistics optimization, but deferred quantifying the impact until next quarter.
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Susan Anderson (Canaccord Genuity) probed on potential for additional DTC acquisitions. CEO Jim Brown confirmed that diversification through M&A remains a key part of USANA’s strategy, with ongoing evaluation of opportunities to expand the portfolio.
Catalysts in Upcoming Quarters
Looking forward, the StockStory team will be closely monitoring (1) sustained productivity and engagement among Brand Partners as the compensation plan matures, (2) progress in executing cost reduction and workforce rightsizing initiatives for improved margins, and (3) the operational and financial impact of integrating in-house manufacturing for Hiya and Rise Bar. Additional attention will be given to the pace of new product launches and any developments in the company’s M&A pipeline.
USANA currently trades at $20.33, down from $20.93 just before the earnings. At this price, is it a buy or sell? Find out in our full research report (it’s free for active Edge members).
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