USNA Q1 Earnings Call: Product Expansion and Market Momentum Drive Outperformance

Health and wellness products company USANA Health Sciences (NYSE: USNA) reported Q1 CY2025 results beating Wall Street’s revenue expectations, with sales up 9.5% year on year to $249.5 million. The company’s full-year revenue guidance of $960 million at the midpoint came in 2% above analysts’ estimates. Its non-GAAP profit of $0.73 per share was 4.3% above analysts’ consensus estimates.

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StockStory’s Take

USANA began 2025 with results that reflected contributions from both its traditional direct selling operations and its recent Hiya acquisition. Management highlighted growth in Mainland China, noting that product promotions and increased associate engagement events supported sequential gains in both net sales and active customers. CEO Jim Brown cited the company’s strategic focus on associate engagement and new product launches as critical to maintaining momentum, especially in Asia-Pacific markets.

Looking ahead, USANA’s leadership reiterated full-year revenue and adjusted earnings guidance, attributing their confidence to Hiya’s continued subscriber growth and a strong pipeline of product launches planned for the second half of the year. CFO Doug Hekking emphasized that operational synergies with Hiya are being pursued cautiously to avoid disrupting its growth strategy. Management also addressed potential tariff risks, stating that inventory buildup and alternative sourcing are being used to mitigate supply chain exposure.

Key Insights from Management’s Remarks

USANA’s management attributed the quarter’s outperformance to a combination of product expansion, targeted promotions, and ongoing growth in the children’s health segment. They also noted regional momentum and operational adjustments in response to global trade uncertainties.

• China and Korea sales momentum: Management saw sequential growth in both net sales and active customers in Mainland China and South Korea, supported by successful product promotions and incentives early in the year. Leadership events and focused engagement in these markets further boosted distributor activity.
• Hiya acquisition integration: The Hiya business continued to deliver growth in net sales and monthly subscribers, especially with its Kids Daily Greens product. Management highlighted ongoing efforts to support Hiya’s operations without disrupting its core strategies, focusing on supply chain and IT collaboration.
• Product launch cadence: USANA rolled out new products in several markets during the quarter, with a greater acceleration of launches planned for the second half of the year, particularly around major company events such as the international convention in August.
• Supply chain and tariff mitigation: The company proactively built up inventory of key raw materials to reduce the impact of potential tariffs and is exploring alternative sourcing relationships. Management stated that only 6% of raw materials come from China to the U.S., limiting exposure.
• Regional market development: The India market remains a focus for long-term growth, though leadership acknowledged that progress continues to be gradual. Direct engagement and new initiatives are being prioritized to drive future expansion.

Drivers of Future Performance

Looking forward, management expects continued revenue growth to be driven by new product launches, Hiya’s expansion, and market-specific engagement strategies, while managing margin pressures from global trade dynamics.

• New product acceleration: A major wave of product launches is planned for the second half of the year, which management believes will support both retention and new customer acquisition across key markets globally.
• Hiya business growth: Hiya’s strategy centers on expanding its core and new offerings in children’s health, supported by broadened channel opportunities and a planned strategic partnership, expected to drive further subscriber growth.
• Tariff and cost management: Management is monitoring evolving tariff policies and relying on inventory buildup and diversified sourcing to help offset potential cost increases, though they acknowledge ongoing uncertainty around global trade could impact future profitability.

Top Analyst Questions

• Anthony Lebiedzinski (Sidoti & Company): Asked about future promotional plans in China and Korea; management confirmed ongoing incentives are planned throughout the year to sustain momentum.
• Anthony Lebiedzinski (Sidoti & Company): Inquired about timing and content of new Hiya product launches; Doug Hekking said launches will be spread through the year, with a significant partnership planned for early May.
• Anthony Lebiedzinski (Sidoti & Company): Questioned operational synergies with Hiya; Walter Noot and Jim Brown explained a measured approach to integration, focusing on supply chain and IT without disrupting Hiya’s strategy.
• Anthony Lebiedzinski (Sidoti & Company): Asked about the India market’s progress; Brent Neidig described a slow but optimistic outlook, with ongoing leadership engagement and initiatives to drive growth.
• Ivan Feinseth (Tigress Financial Partners): Queried about new product launches and their reception in China; Brent Neidig highlighted strong demand for new children’s products and plans for increased launch activity in the second half of the year.

Catalysts in Upcoming Quarters

In the coming quarters, the StockStory team will monitor (1) the pace and impact of new product launches, particularly those timed around major company events; (2) Hiya’s subscriber growth and the effectiveness of its channel expansion and new partnerships; and (3) the company’s ability to manage potential tariff impacts through inventory and sourcing strategies. Execution in India and other developing markets will also be key indicators of broader growth potential.

USANA currently trades at a forward P/E ratio of 10.9×. Is the company at an inflection point that warrants a buy or sell? Find out in our free research report.

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