Health and wellness products company USANA Health Sciences (NYSE: USNA) reported Q1 CY2025 results beating Wall Street’s revenue expectations, with sales up 9.7% year on year to $250 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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USANA (USNA) Q1 CY2025 Highlights:
- Revenue: $250 million vs analyst estimates of $243 million (9.7% year-on-year growth, 2.9% beat)
- Adjusted EPS: $0.73 vs analyst estimates of $0.70 (4.3% beat)
- The company reconfirmed its revenue guidance for the full year of $960 million at the midpoint
- Management reiterated its full-year Adjusted EPS guidance of $2.68 at the midpoint
- EBITDA guidance for the full year is $115 million at the midpoint
- Operating Margin: 8.4%, down from 10.8% in the same quarter last year
- Market Capitalization: $449.4 million
Company Overview
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
Reviewing a company’s long-term sales performance reveals insights into its quality. Any business can put up a good quarter or two, but the best consistently grow over the long haul.
With $876.7 million in revenue over the past 12 months, USANA is a small consumer staples company, which sometimes brings disadvantages compared to larger competitors benefiting from economies of scale and negotiating leverage with retailers.
As you can see below, USANA struggled to generate demand over the last three years. Its sales dropped by 8.7% annually, a poor baseline for our analysis.
This quarter, USANA reported year-on-year revenue growth of 9.7%, and its $250 million of revenue exceeded Wall Street’s estimates by 2.9%.
Looking ahead, sell-side analysts expect revenue to grow 8.6% over the next 12 months, an acceleration versus the last three years. This projection is healthy and suggests its newer products will catalyze better top-line performance.
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Cash Is King
Free cash flow isn't a prominently featured metric in company financials and earnings releases, but we think it's telling because it accounts for all operating and capital expenses, making it tough to manipulate. Cash is king.
USANA has shown decent cash profitability, giving it some flexibility to reinvest or return capital to investors. The company’s free cash flow margin averaged 6.3% over the last two years, slightly better than the broader consumer staples sector.
Key Takeaways from USANA’s Q1 Results
It was great to see USANA’s full-year revenue guidance top analysts’ expectations. We were also happy its revenue and EPS outperformed Wall Street’s estimates. Overall, we think this was a decent quarter with some key metrics above expectations. The stock remained flat at $24.24 immediately following the results.
Big picture, is USANA a buy here and now? The latest quarter does matter, but not nearly as much as longer-term fundamentals and valuation, when deciding if the stock is a buy. We cover that in our actionable full research report which you can read here, it’s free.
