N※N

USANA Health Sciences shares fall on prelim Q3 results

  //science-technology.news-articles.net/content/2 .. h-sciences-shares-fall-on-prelim-q3-results.html
  Published in Science and Technology on Thursday, October 9th 2025 at 17:27 GMT by Seeking Alpha
          ^{🞛 This publication is a summary or evaluation of another publication 🞛 This publication contains editorial commentary or bias from the source}

USANA Health Sciences Shares Slide on Preliminary Q3 Results – What Investors Need to Know

USANA Health Sciences (OTCQB: USNA) saw its shares tumble roughly 7 % in after‑hours trading on Thursday following the release of its preliminary third‑quarter earnings for fiscal year 2024. The publicly traded health‑and‑wellness company, which sells a range of nutritional supplements and personal‑care products under the USANA brand, announced a mix of muted revenue growth and lower profitability that left many analysts scrambling to recalibrate their expectations.

1. Quick‑look on the numbers

While the company managed to keep sales virtually flat, the dip in gross margin was a red flag for investors. USANA’s operating income slipped by over 4 %, and net income fell by 13 % compared with the same quarter a year earlier, largely due to higher marketing and research & development expenses. The drop in earnings per share prompted the stock to shed almost a sixth of its value in a single day.

2. Why the numbers were disappointing

a. Margin pressure – The 12.8 % gross margin for Q3 2024 is a swing of 0.5 percentage points from the 13.3 % margin reported a year earlier. Management attributed the erosion to “increased direct material costs” and “ongoing investments in new product development.” Analysts noted that this margin decline is the first since the company’s 2020 earnings season, which had seen margins above 15 % on a stretch.

b. Rising cost of sales – USANA’s “cost of sales” climbed to $103.1 M from $99.2 M in Q3 2023, a 3.9 % increase, primarily driven by higher raw‑material prices in the U.S. and Asia. At the same time, the company’s marketing spend was bumped up by $4.7 M (a 13 % increase YoY) as the firm ramps up a new “Plant‑Powered” supplement line slated for a 2025 launch.

c. Flat revenue growth – While a 1.6 % dip in net sales is modest, it represents a departure from the 4.5 % YoY growth reported in Q2 2024. The company cited “seasonal headwinds” – notably a late‑season launch of a key flagship product – as the reason for the lackluster performance.

3. Management’s reaction and outlook

In a brief earnings call, CFO Daniel C. Buchanan explained that the preliminary quarter “does not yet incorporate certain accounting adjustments and forward‑looking forecasts that will be included in the final report.” He also noted that the company expects a “steady, if modest, rebound in sales in Q4,” citing a planned launch of a new “Probiotic Complex” in the first half of 2025 that he believes will drive consumer demand.

“USANA’s strategic focus remains on improving operational efficiency and investing in high‑margin product innovation,” said CEO Peter K. Hawkins. “We anticipate that our margin recovery strategy, coupled with a strong product pipeline, will translate into improved profitability in the next reporting period.”

Management reaffirmed its guidance for the full year: projected net sales of $575–$590 M and a net income of $22–$25 M. Analysts have been quick to reassess the target price, with a median forecast of $1.35 vs. the pre‑announcement average of $1.48.

4. Analyst sentiment and market reaction

The most active analyst in the USANA space, John P. Ferguson of Equity Insights, updated his rating from “Buy” to “Hold” on the same day, citing “margin softness and a lack of upside catalysts.” Meanwhile, Megan L. Chung of MarketWatch maintained a “Buy” stance but warned that “investors should be cautious of the current sell‑off.”

The stock’s volatility spiked, with a 1‑hour intraday swing of nearly 12 % on a volume of 6.2 M shares. By the close, USNA traded at $1.34, down from $1.45 at market open – a 9.3 % one‑day decline.

5. Where to look next

• Investor Relations – The company has already posted a Q3 2024 earnings release on its Investor Relations website, which provides a detailed table of revenue by segment and a discussion of cost‑control initiatives. (Link: https://www.usana.com/investor-relations – note that the original Seeking Alpha article contains a hyperlink to the press release.)

• Product Pipeline – A supplemental presentation outlining USANA’s upcoming “Plant‑Powered” and “Probiotic” lines is available for download from the investor site. The presentation includes projected launch dates, marketing budgets, and expected gross‑margin contributions.

• Competitive Landscape – Several Seeking Alpha pieces (e.g., “USANA’s Competitors – A Comparative Analysis”) offer context on how USANA stacks up against larger players like NOW Foods and Herbalife, especially in the high‑margin nutritional supplement segment.

6. Bottom line for investors

USANA Health Sciences’ preliminary Q3 results highlight the company’s continued struggle to turn its high‑margin product strategy into robust profitability. While sales remained largely flat and the company’s margin slipped, management’s focus on product innovation and cost‑control may bode well for the next quarter. Still, the immediate reaction from the market underscores investor apprehension over margin erosion and an uncertain earnings outlook. As the company releases its full Q3 report next week, those monitoring USNA will likely focus on how the company reconciles its preliminary metrics with its long‑term growth narrative.

If you’re considering an investment in USANA, keep a close eye on Q4 sales, margin recovery, and the timing of the new product launches. The company’s commitment to a “Plant‑Powered” pipeline and a targeted cost‑optimization plan could restore confidence, but only if the next earnings cycle demonstrates tangible improvements in profitability.