USANA Health Sciences, Inc. (USNA) Q1 2026 Earnings Call Transcript
Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
Overview
The earnings call reveals strong financial performance with a 7% growth in core nutritional net sales and a significant increase in Rise Wellness sales. The company is expanding internationally and investing in technology modernization, which could enhance future performance. However, risks such as economic uncertainty and high customer acquisition costs for Hiya are noted. Positive elements include expected margin efficiencies, retail expansion, and a stable macro environment in China. The lack of guidance on new product launches was a minor negative, but overall, the sentiment is positive, anticipating a stock price increase of 2% to 8%.
Key Financial Performance
Net Sales (Core Nutritional Business) $204 million, grew 7% sequentially year-over-year. The growth was driven by active customer growth, particularly in the China market, which benefited from customer acquisition activity around the Lunar New Year.
Net Sales (Hiya) $32 million in the first quarter. Active monthly subscribers were 186,000, reflecting modest sequential improvement from Q4. The business faced elevated customer acquisition costs due to disruptions in the Meta advertising environment starting in Q3 2025.
Net Sales (Rise Wellness) $14 million in the first quarter, more than 8x the prior year's first quarter, representing a 143% sequential increase. This performance was driven by the national launch of Protein Pop Plus into Costco.
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Operating Highlights
New Product Launches: Accelerating new product launches with a robust pipeline of new and upgraded formulations. Rise Wellness launched Protein Pop Plus nationally into Costco, achieving significant market share and becoming a leading brand.
Hiya Product Expansion: Hiya expanded into retail with products now available at Target, marking its first brick-and-mortar retail partner. The brand also launched in Canada and the UK, establishing its first international direct-to-consumer markets.
Market Expansion for Hiya: Hiya launched in Canada and the UK, entering its first international direct-to-consumer markets. It also expanded into retail through Target.
Rise Wellness Market Growth: Rise Wellness achieved significant growth with Protein Pop Plus gaining meaningful market share and expanding its presence in Costco and other retailers.
Technology Modernization: Investing in technology modernization initiatives to improve customer experience and drive cost efficiencies across IT infrastructure.
Operational Efficiencies for Hiya: Implemented a new ERP system, transitioned 3PLs, leveraged R&D for new product development, expanded internationally, and brought manufacturing and packaging in-house to generate margin efficiencies.
Operational Efficiencies for Rise Wellness: Manufacturing Rise Bars on USANA's high-speed bar line, managing inventory and demand planning, and reformulating products to enhance customer experience.
Omnichannel Strategy: Transitioning from a single-channel direct sales business to a diversified omnichannel health and wellness platform. Omnichannel net sales are projected to represent over 20% of total net sales in 2026, up from 16% in 2025.
Core Business Stabilization: Focused on stabilizing the core nutritional business through enhanced brand partner compensation plans, customer acquisition activities, and technology upgrades.
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Risk or Challenges
Economic and Operating Environment Uncertainty: Management highlighted uncertainty related to the global economic and operating environment, which could adversely impact operations and financial results.
Elevated Customer Acquisition Costs for Hiya: Hiya faced elevated customer acquisition costs due to disruptions in the Meta advertising environment, which could hinder subscriber growth and financial performance.
Competitive Pressures in Protein Pop Market: The Protein Pop product operates in a competitive and evolving marketplace, posing challenges to maintaining and growing market share.
Technology Modernization Investment Risks: The company is making incremental investments in technology modernization, which, if not executed effectively, could strain resources or fail to deliver expected efficiencies.
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Guidance & Outlook
Hiya Net Sales: Projected full year 2026 net sales of $140 million to $155 million for Hiya.
Consolidated Net Sales: Reaffirmed full year 2026 guidance, projecting consolidated net sales of USD 925 million to USD 1 billion.
Omnichannel Net Sales: Omnichannel net sales are on track to represent more than 20% of the total net sales in 2026, up from 16% in 2025.
Hiya Subscriber Growth: Expected stronger performance in the second half of 2026 due to recovery in customer acquisition costs and international expansion.
Hiya Margin Efficiencies: Incremental margin efficiencies expected in the back half of 2026 due to in-house manufacturing and packaging of Hiya products.
Rise Wellness Growth: Rise Wellness is expected to expand its retail presence with Protein Pop and other products in more retailers in the coming months and years.
Technology Modernization Initiatives: Guidance includes a modest investment for technology modernization initiatives, funded through repurposed resources and operational savings.
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Shareholder Return Plan
The selected topic was not discussed during the call.
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Key Q&A
Q:Have there been any notable changes in the macro environment in China or elsewhere due to increased fuel prices since the Iran conflict started?
A:The macro environment in China is stable relative to the rest of the globe and has been insulated from inflationary pressures. There is no material impact from the Iran conflict on fuel prices as of yet.
Q:Can you share specifics about the number of new products in the pipeline and the focus of new product development?
A:There are over 20 products under development across all brands and markets. The focus is on leveraging internal and external skill sets, expanding product formats, and meeting consumer needs across different channels. Specific launch dates and categories were not disclosed.
Q:Why was SG&A higher than the fourth quarter and last year?
A:The increase in SG&A is attributed to Hiya's diversification into retail, entry into Canada and the U.K., and the cost of acquiring customers through advertising, particularly using Meta algorithms.
Q:How is Hiya performing in Canada, the U.K., and at Target?
A:Hiya has exceeded targets in Canada, had a slow start in the U.K. due to being a new market, and has been on shelves at Target for about two weeks with end caps recently added. Performance at Target will be clearer in the coming weeks.
Q:Has there been reorder activity from Costco for Rise, and are there plans to sell to other retailers?
A:Yes, there is weekly reorder activity from Costco. Nine additional major U.S. retailers have been set up for this year, with some starting in Q2 and others in Q3. Protein Pop is already in 500 Walmart stores, and there are plans to expand further.
Q:What are the R&D initiatives and growth opportunities for the company?
A:The focus is on women's health, children's health, and gut health, with investments in clinical research. Active Nutrition is also a priority, with new protein products and weight management shakes launched in China in Q1.
Q:Is there additional focus on gut health and updates on Active Nutrition products?
A:Yes, gut health is a focus across all demographics, with specific attention to women's and children's needs. Active Nutrition includes new protein products and weight management shakes, with recent launches in China supported by upgraded formulas and manufacturing investments.
Q:Review of Unclear Management Responses
A:Management avoided providing specific details on the launch dates and categories of the new products under development, citing a general focus on leveraging insights and expanding channels.
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Earnings Word Cloud
The most frequently occurring keywords in this quarter's earning call
Carrie result
Chairman Chief
Chief Executive
Chief Officer
Executive Officer
Greetings USANA
Instructions conference
Officer Chief
Officer executive
SEC Chairman
Sciences Instructions
conference host
conference statement
host sir
sir Carrie
USNA Transcript
USANA Health Sciences, Inc. (USNA) Q1 2026 Earnings Call Transcript
Positive5-6
The earnings call reveals strong financial performance with a 7% growth in core nutritional net sales and a significant increase in Rise Wellness sales. The company is expanding internationally and investing in technology modernization, which could enhance future performance. However, risks such as economic uncertainty and high customer acquisition costs for Hiya are noted. Positive elements include expected margin efficiencies, retail expansion, and a stable macro environment in China. The lack of guidance on new product launches was a minor negative, but overall, the sentiment is positive, anticipating a stock price increase of 2% to 8%.
USANA Health Sciences, Inc. (USNA) Q4 2025 Earnings Call Transcript
Unknown2-18
The earnings call reveals mixed signals: strong growth in Hiya and Rise Wellness, but challenges with high tax rates and core business sales decline. The Q&A session highlights growth potential in new markets but lacks detailed insights, creating uncertainty. While the company's strategic initiatives and expansion plans are promising, concerns about profitability and financial uncertainty persist. Consequently, a neutral stock price movement is anticipated over the next two weeks, as positive growth prospects are balanced by financial and operational risks.
USANA Health Sciences, Inc. (USNA) Q3 2025 Earnings Call Transcript
Unknown10-23
The earnings call highlights mixed signals: positive sales growth for Hiya and Rise Bar, promising trends from the new compensation plan, and strategic incentives planned for Q4. However, challenges include short-term margin pressures, potential operational disruptions from cost reductions, and uncertainties in supply chain transitions. The Q&A reveals management's confidence in growth, but lacks specifics on cost savings and Hiya's margin impact. Without clear guidance, the market may react cautiously, leading to a neutral stock price movement prediction.
USANA Health Sciences, Inc. (USNA) Q2 2025 Earnings Call Transcript
Positive7-23
The earnings call reveals strong financial performance, with debt repayment, robust growth in Hiya and Rise Bar, and a new partnership with Disney. The Q&A section addresses concerns about customer decline and tariffs, with management expressing optimism for future growth. The new incentive program and potential share buybacks are positive indicators. Despite some uncertainties, the overall sentiment is positive, suggesting a potential stock price increase of 2% to 8% over the next two weeks.
USNA Report
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