USANA Health Sciences Q2 Earnings Call Highlights

Key Points

• USANA lowered its full-year outlook after Hiya’s higher digital customer-acquisition costs and a packaging issue at Rise Wellness created an estimated $30 million–$40 million in revenue pressure and $4 million–$5 million in margin pressure.
• The core nutrition business remained broadly on track, with improving momentum in mainland China and early recovery signs in North Asia, supported by planned product launches, incentives and events.
• USANA recorded a preliminary $29 million non-cash goodwill impairment tied to Hiya, but ended the quarter with $169 million in cash, no debt and $20 million in free cash flow, maintaining financial flexibility for its omni-channel strategy.

USANA Health Sciences NYSE: USNA said its core nutritional business remained in line with expectations during the second quarter of 2026, while near-term challenges at its Hiya and Rise Wellness ventures led the company to lower its full-year outlook.

Chairman and Chief Executive Officer Kevin Guest said the company is continuing its transition toward a diversified omni-channel health and wellness business, combining its traditional brand-partner model with direct-to-consumer, retail and international distribution channels.

“We’re building a diversified omni-channel health and wellness company anchored by science and built on deep, lasting consumer loyalty,” Guest said during the company’s earnings call.

Core Nutrition Business Shows Stability

Management highlighted improvement in mainland China, USANA’s largest and most established market. Chief Commercial Officer Brent Neidig said second-quarter performance in China benefited from momentum following a first-quarter incentive program and new-product launch, along with resilient brand partners and customers despite a softer economic environment.

Neidig said the company has additional product launches, incentive offerings and events planned in China during the second half of the year. Guest added that he has increased confidence in the company’s leadership team in the market.

USANA also discussed weakness in North Asia, where Korea is the company’s largest market. Neidig attributed some disruption to a leadership transition earlier in the year, but said the company is seeing early signs of renewed momentum. USANA plans to launch personalized packs unique to Korea during the third quarter.

The company is also pursuing product innovation within its core business. Guest cited the recent launch of Glow, a skin-health supplement designed to extend USANA’s offerings beyond topical skincare. Chief Scientific Officer Kathryn Armstrong said the product was developed using ingredients with clinical data and consumer testing intended to determine whether users could see and feel results.

Hiya Faces Digital Marketing Pressure

Hiya, USANA’s children’s health and wellness brand, continued to expand its retail and international presence, according to management. Guest said the brand’s Target presence remains strong, while its early expansion in Canada and the United Kingdom has been trending positively. The Hiya team is also pursuing growth through Amazon.

However, the company said Hiya’s direct-to-consumer subscription business has been affected by a more difficult and costly digital advertising environment. Chief Operating Officer Walter Noot said changes associated with Meta’s advertising platform and higher customer acquisition costs have pressured subscriber growth.

Noot said recent customer-acquisition metrics have improved, and management expects the back-to-school period to support the brand. He also said Hiya is working to diversify its marketing approach through channels including TikTok, while adding retailers and continuing international expansion.

“It’s a transition time,” Noot said, noting that Hiya had operated primarily as a subscription business for several years before expanding its retail strategy.

Rise Packaging Issue Disrupts Sales

Rise Wellness encountered a packaging issue during the quarter that disrupted its commercial execution and affected sales. Management said the problem was cosmetic rather than a product-safety issue, and the company voluntarily pulled unsold products from the channel.

Chief Financial Officer Doug Hekking said USANA recorded a charge related to some inventory, while management believes other inventory can still be sold through retail channels. Noot said the packaging issue has been resolved and that Rise maintains positive relationships with retailers.

Management said Rise expects to have products in more than 4,000 retail doors by the end of 2026. Guest said Protein Pop, which is less than a year into its national rollout, has established distribution and shelf presence with major retailers. The company plans to launch an additional Protein Pop product during the third quarter.

Hekking said the changes from USANA’s earlier outlook reflected approximately $30 million to $40 million of top-line pressure, largely tied to the slowdown at Rise and a lower expected sales contribution from Hiya. He also cited roughly $4 million to $5 million of margin pressure from lower sales and operational infrastructure costs.

Impairment Charge and Outlook Reduction

USANA recorded an estimated preliminary non-cash goodwill impairment charge of $29 million related to the Hiya reporting unit. Hekking said the charge reflected current and expected performance, revised near-term forecasts and valuation assumptions, including market multiples and discount rates. He said the impairment did not change management’s commitment to Hiya or its view of the brand’s strategic role.

The company also recorded $9 million in income tax expense on a pre-tax loss of $19 million during the quarter. Hekking said the tax expense was affected by a mismatch between where the company generates revenue and where it incurs costs, which was amplified by the venture-business pressures. He said USANA expects an elevated tax rate for the remainder of the year, although not at the second-quarter level.

Despite the outlook reduction, Guest emphasized USANA’s financial flexibility. The company ended the quarter with $169 million in cash, no debt and $20 million in free cash flow, which he said was supported in large part by improved working-capital management.

“The path to building a diversified omni-channel health and wellness company will not always be linear,” Guest said. “We are managing the business accordingly with discipline and clear focus on long-term value creation for our stakeholders.”

About USANA Health Sciences (NYSE:USNA)

USANA Health Sciences, Inc is a Utah‐based company that develops, manufactures and distributes nutritional supplements and personal care products through a network of independent distributors. Founded in 1992 by Dr. Myron Wentz, the company's portfolio includes vitamins, minerals, dietary supplements, weight‐management products and skin‐care formulations. USANA's products are formulated in its own laboratories to meet pharmaceutical‐grade standards, and the company has invested heavily in research and development and quality control to support its offerings.

Operating primarily through a direct selling model, USANA serves markets in North America, Asia Pacific, Europe and Latin America.

This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to contact@marketbeat.com.

Continue following MarketBeat

Add MarketBeat as your preferred source on Google to see our latest stories in your feed.

Add As Preferred Source