USNA Q2 Deep Dive: New Compensation Model and Product Initiatives Drive Growth

July 25, 2025 at 09:24 AM EDT

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Health and wellness products company USANA Health Sciences (NYSE: USNA) announced better-than-expected revenue in Q2 CY2025, with sales up 10.8% year on year to $235.8 million. The company’s full-year revenue guidance of $960 million at the midpoint came in 1.4% above analysts’ estimates. Its non-GAAP profit of $0.74 per share was 37% above analysts’ consensus estimates.

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USANA (USNA) Q2 CY2025 Highlights:

Revenue: $235.8 million vs analyst estimates of $225.2 million (10.8% year-on-year growth, 4.7% beat)
Adjusted EPS: $0.74 vs analyst estimates of $0.54 (37% beat)
Adjusted EBITDA: $30 million vs analyst estimates of $24.9 million (12.7% margin, 20.5% 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, above analyst estimates of $112.6 million
Operating Margin: 7.1%, down from 8.4% in the same quarter last year
Market Capitalization: $597.6 million

StockStory’s Take

USANA’s second quarter results were met with a positive market reaction, driven by revenue and non-GAAP earnings that both exceeded Wall Street expectations. Management attributed this performance to the implementation of strategic initiatives, including a shift in sales terminology and compensation structure, and increased momentum in its recently acquired businesses. CEO Jim Brown highlighted that the company’s direct-to-consumer platform Hiya achieved strong growth and improved profitability, while the refreshed approach to brand partners and expanded product offerings contributed to higher engagement and sales activity.

Looking forward, USANA’s outlook is shaped by ongoing enhancements to its direct sales model and plans for additional product launches. Management emphasized that the new compensation plan and business tools are designed to accelerate customer acquisition and retention, with further rollouts scheduled for the third quarter. CEO Jim Brown stated that these updates, along with upcoming product introductions at the company’s global convention, are expected to boost brand partner engagement and support sustainable long-term growth. Management also noted that investments tied to these initiatives may lead to near-term margin pressure.

Key Insights from Management’s Remarks

Management pointed to several operational and strategic changes as key contributors to the quarter’s growth, with a focus on new sales infrastructure, compensation changes, and acquired business integration.

Compensation plan enhancements: The company introduced a revised compensation plan for its brand partners (formerly associates) that brings earnings forward in a partner’s journey. This change is intended to make it easier for new partners to earn commissions quickly, which management expects will drive higher acquisition and retention rates.
Brand partner strategy shift: The rebranding of sales leaders as “brand partners,” along with greater alignment across sales, marketing, and communications teams, is intended to foster a more collaborative and entrepreneurial culture. Management believes this will improve engagement and performance among its sales force.
Product and tool updates: USANA launched new back office and mobile tools that provide brand partners with data-driven recommendations and easier business management. Additional enhancements for social media and artificial intelligence (AI) tools are being trialed to further support brand partners in customer outreach and business development.
Acquired business momentum: The Hiya direct-to-consumer business saw strong year-over-year revenue growth, aided by new partnerships (such as Disney-branded multivitamins) and ongoing integration efforts. The Rise Bar business also delivered double-digit growth, with management citing expanding relationships with retail partners.
China market performance: Despite a drop in active customers, sales in China exceeded expectations. Management attributed this to temporary tariff-related consumer behavior and continued optimism among brand partners, although they acknowledged macroeconomic uncertainty remains a factor.

Drivers of Future Performance

USANA’s management expects future growth to be driven by recent sales model changes, new product launches, and integration progress with acquired businesses, while keeping an eye on cost pressures and macroeconomic factors.

Rollout of compensation changes: The full deployment of the updated compensation plan, including new incentives and business-building tools, is anticipated to improve customer acquisition and retention in the second half of the year. Management expects these changes to make entrepreneurship more attractive to both new and existing brand partners.
Ongoing product innovation: USANA plans several product launches and sales incentives, with announcements expected at its upcoming global convention. Management believes these initiatives will generate higher engagement and incremental sales, especially as the company leverages events to recognize and train top brand partners.
Integration and expansion of acquired brands: Focused efforts to realize operational synergies and expand Hiya’s presence in children’s wellness markets, including potential entry into international channels, are expected to support revenue growth. However, management cautioned that investments in these areas, as well as in technology and events, may put short-term pressure on operating margins.

Catalysts in Upcoming Quarters

Looking ahead, the StockStory team will closely watch (1) the impact of the new compensation plan and business tools on customer acquisition and partner retention, (2) the success of product launches and incentive programs revealed at the global convention, and (3) operational progress in integrating Hiya and expanding its distribution. Execution in these areas will clarify whether USANA’s strategies can drive sustained growth and margin improvement.

USANA currently trades at $32.50, up from $31.53 just before the earnings. Is there an opportunity in the stock?The answer lies in our full research report (it’s free).

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