Yahoo Finance USANA (NYSE:USNA) Posts Q1 Sales In Line With Estimates
Health and wellness products company USANA Health Sciences (NYSE:USNA) reported results in line with analysts' expectations in Q1 CY2024, with revenue down 8.3% year on year to $227.8 million. On the other hand, the company's full-year revenue guidance of $885 million at the midpoint came in slightly below analysts' estimates. It made a GAAP profit of $0.86 per share, down from its profit of $0.95 per share in the same quarter last year.
Is now the time to buy USANA? Find out in our full research report.
USANA (USNA) Q1 CY2024 Highlights:
Revenue: $227.8 million vs analyst estimates of $226.8 million (small beat)
EPS: $0.86 vs analyst estimates of $0.69 (24.6% beat)
The company reconfirmed its revenue guidance for the full year of $885 million at the midpoint
Gross Margin (GAAP): 81.1%, in line with the same quarter last year
Market Capitalization: $827 million
“Our top line results during the first quarter were driven by a successful sales incentive in mainland China, which helped counter the seasonal slowdown that we experience during the Lunar New Year holiday,” said Jim Brown, President and Chief Executive Officer.
Going to market with a direct selling model rather than through traditional retailers, USANA Health Sciences (NYSE:USNA) manufactures and sells nutritional, personal care, and skincare products.
Personal Care
While personal care products products may seem more discretionary than food, consumers tend to maintain or even boost their spending on the category during tough times. This phenomenon is known as "the lipstick effect" by economists, which states that consumers still want some semblance of affordable luxuries like beauty and wellness when the economy is sputtering. Consumer tastes are constantly changing, and personal care companies are currently responding to the public’s increased desire for ethically produced goods by featuring natural ingredients in their products.
Sales Growth
USANA is a small consumer staples company, which sometimes brings disadvantages compared to larger competitors benefitting from better brand awareness and economies of scale.
As you can see below, the company's revenue has declined over the last three years, dropping 8.5% annually. This is among the worst in the consumer staples industry, where demand is typically stable.
This quarter, USANA reported a rather uninspiring 8.3% year-on-year revenue decline to $227.8 million in revenue, in line with Wall Street's estimates. Looking ahead, Wall Street expects revenue to remain flat over the next 12 months.
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Operating Margin
Operating margin is an important measure of profitability accounting for key expenses such as marketing and advertising, IT systems, wages, and other administrative costs.
This quarter, USANA generated an operating profit margin of 10.8%, in line with the same quarter last year. This indicates the company's costs have been relatively stable.
Zooming out, USANA has done a decent job managing its expenses over the last eight quarters. The company has produced an average operating margin of 10.3%, higher than the broader consumer staples sector. On top of that, its margin has remained more or less the same, highlighting the consistency of its business.
Key Takeaways from USANA's Q1 Results
We enjoyed seeing USANA exceed analysts' operating margin and EPS expectations this quarter. On the other hand, its gross margin and full-year revenue guidance were underwhelming. Overall this quarter's results were mixed. The stock is flat after reporting and currently trades at $41.52 per share.
So should you invest in USANA right now? When making that decision, it's important to consider its valuation, business qualities, as well as what has happened in the latest quarter. We cover that in our actionable full research report which you can read here, it's free.
