USANA (NYSE:USNA) Beats Q4 Sales Targets, Stock Soars

February 25, 2025 at 16:33 PM EST

USNA Cover Image

Health and wellness products company USANA Health Sciences (NYSE: USNA) reported Q4 CY2024 results beating Wall Street’s revenue expectations, but sales fell by 3.4% year on year to $213.6 million. The company’s full-year revenue guidance of $960 million at the midpoint came in 2.7% above analysts’ estimates. Its non-GAAP profit of $0.64 per share was 30.6% above analysts’ consensus estimates.

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USANA (USNA) Q4 CY2024 Highlights:

Revenue: $213.6 million vs analyst estimates of $208.8 million (3.4% year-on-year decline, 2.3% beat)
Adjusted EPS: $0.64 vs analyst estimates of $0.49 (30.6% beat)
Adjusted EBITDA: $25.5 million vs analyst estimates of $20.7 million (11.9% margin, 23.2% beat)
Management’s revenue guidance for the upcoming financial year 2025 is $960 million at the midpoint, beating analyst estimates by 2.7% and implying 12.3% growth (vs -7.1% in FY2024)
Adjusted EPS guidance for the upcoming financial year 2025 is $2.68 at the midpoint, missing analyst estimates by 6.8%
EBITDA guidance for the upcoming financial year 2025 is $115 million at the midpoint, above analyst estimates of $111.6 million
Operating Margin: 3.8%, down from 11% in the same quarter last year
Market Capitalization: $623.1 million

“USANA delivered fourth quarter results above our internal expectations, highlighted by 7% sequential net sales growth,” said Jim Brown, President and Chief Executive Officer.

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

Examining a company’s long-term performance can provide clues about its quality. Any business can put up a good quarter or two, but the best consistently grow over the long haul.

With $854.5 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 10.4% annually, showing demand was weak. This is a tough starting point for our analysis.

This quarter, USANA’s revenue fell by 3.4% year on year to $213.6 million but beat Wall Street’s estimates by 2.3%.

Looking ahead, sell-side analysts expect revenue to grow 9.4% over the next 12 months, an acceleration versus the last three years. This projection is noteworthy and indicates its newer products will spur better top-line performance.

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Cash Is King

Although earnings are undoubtedly valuable for assessing company performance, we believe cash is king because you can’t use accounting profits to pay the bills.

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 6.6% over the last two years, slightly better than the broader consumer staples sector.

USANA Trailing 12-Month Free Cash Flow Margin

Key Takeaways from USANA’s Q4 Results

We were impressed by how significantly USANA blew past analysts’ revenue, EPS, and EBITDA expectations this quarter. We were also glad its full-year revenue and EBITDA guidance exceeded Wall Street’s estimates. Zooming out, we think this quarter featured some important positives. The stock traded up 9.5% to $35 immediately after reporting.

USANA had an encouraging quarter, but one earnings result doesn’t necessarily make the stock a buy. Let’s see if this is a good investment. 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.

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