What Happened?
A number of stocks fell in the afternoon session after the oil price surge raised input cost concerns for an industry (personal care) that relies heavily on petroleum-derived ingredients.
Manufacturers faced a renewed margin squeeze just as Estée Lauder and other industry players began cutting headcount and resetting expectations. Furthermore, while personal care was historically considered defensive, recent Conference Board data revealed even beauty and personal care spending intentions softened as inflation fatigue spread.
The stock market overreacts to news, and big price drops can present good opportunities to buy high-quality stocks.
Among others, the following stocks were impacted:
- Personal Care company Herbalife (NYSE: HLF) fell 3.9%. Is now the time to buy Herbalife? Access our full analysis report here, it’s free.
- Personal Care company USANA (NYSE: USNA) fell 4.4%. Is now the time to buy USANA? Access our full analysis report here, it’s free.
Zooming In On USANA (USNA)
USANA’s shares are quite volatile and have had 16 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The biggest move we wrote about over the last year was 7 months ago when the stock dropped 20.7% on the news that the company announced preliminary third-quarter results that fell below expectations, signaling a sharp decline in profitability.
Although net sales were expected to increase to approximately $214 million from $200 million in the same period of the previous year, earnings from operations dropped significantly to $1.2 million from $15.6 million. The company pointed to two main issues for the poor performance. First, the rollout of a new compensation plan for its Brand Partners led to a more pronounced slowdown in sales and productivity than anticipated. Second, its direct-to-consumer business, Hiya, had weaker sales due to lower-than-expected customer acquisition. Consequently, USANA anticipated a net loss of $6.5 million for the quarter, a stark reversal from the $10.6 million in net earnings reported a year earlier.
USANA is down 4.8% since the beginning of the year, and at $18.51 per share, it is trading 47.8% below its 52-week high of $35.43 from July 2025. Investors who bought $1,000 worth of USANA’s shares 5 years ago would now be looking at only $204.00.
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