USANA Health Sciences (USNA) second quarter earnings are lower than a year ago. The company’s profits totaled to $23.26 million or $0.93 a share this year which has significantly decreased from last year’s same quarter of $25.76 million or $1.03 a share. The earnings per share (EPS) decline were at 9.7%.
USANA failed analysts’ expectations
Before the announcement of the company’s earnings results, analysts from Thomson Reuters even forecasted that the company may earn $1.15 per share. However, the total revenue for the relevant quarter dropped to $257.06 million which is 0.6% lower than the $258.51 million a year ago.
USANA shares plunged
Shares of the nutritional supplement maker plunged on Tuesday’s session after it missed the estimates of Wall Street. Its stocks tumbled to $55.70 which is 14% than the previous price. Consequently, the company adjusted its outlook for this year to $3.50 and $3.70 a share from a former ranger of $3.80 and $4.10 a share. The current estimate of analysts for the year is $4.06 a share.
USANA Financial Performance
Following a constant currency basis, net sales improved by 2.3% for the relevant quarter of this year, however, due to a stronger dollar, the net sales for the quarter of $7.4 million were jammed. It was also known that the net earnings were affected by a higher SG&A and Associate Incentives expense during the second quarter.
Moreover, USANA’s conduct of investigation into its China operations has affected the earnings per diluted share portion of the company for the current year. What remains to be an advantage for the nutritional supplement maker is that its cash and cash equivalents remain to be intact with a total amount of $229.4 million and it does not have any existing debt so far.
USANA CEO Kevin Guest even said in a statement, “Our second quarter revenue was essentially flat, with the year-ago period, which represented the highest quarterly sales in the Company’s history. In addition to the tough comparable, sales were softer than expected this quarter in several of our regions due to slower momentum and customer growth in the business. Supplier challenges with our MySmart foods line also negatively impacted our top-line results for the quarter. To counter these issues, we offered a successful short term promotion in China during the quarter and plan to offer additional promotions in several of our markets during the second half of the year. These promotions are designed to generate additional momentum and help grow the base of consumers using USANA’s best-in-class products.”
USANA efforts to generate growth
Despite the negative impact from a strong U.S. dollar in the Asian region, net sales of USANA increased by 2.6%. In Greater China, it was noticed that there is an increased also of 3.7%. However, there is a decrease by 4.8% in the Southeast Asia Pacific region. Net sales in the Americas and Europe region declined by 10.2% and these are attributable to an 8.2% reduction in the active customers of the company.
Guest added in his statement, “The Americas and Europe region continues to present a challenge for USANA, notwithstanding our team’s continued efforts to generate growth. Our strategies for this region in the short-term include market-specific promotions during the back half of the year, as well as other initiatives to generate momentum that will be announced in August at our 25th Anniversary International Convention in Salt Lake City. Additional longer-term growth strategies will become available to us in 2018 as we further enhance our worldwide IT systems. Our team remains confident that we can generate growth in the Americas and Europe.”
USANA is into doing its best efforts in generating growth for regions wherein they have weak customer data engagement. This in turn can help turn the tables for the Salt Lake City-based company this year.
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