USANA Health Sciences Inc

USANA Health Sciences reported second-quarter results that missed Wall Street expectations, with revenue of $223.3 million versus analyst estimates of $235 million and an adjusted loss per share of $0.07 compared to the expected $0.43 profit. Management attributed the underperformance to a non-cash goodwill impairment in its Hiya business and a packaging issue at Rise Wellness, while the core nutritional segment showed stability with strength in Mainland China offsetting declines elsewhere. During the earnings call, analysts from Sidoti & Company and Tigress Financial Partners pressed executives on the sustainability of China's sales uptick, the causes of North Asia's revenue decline, Hiya's direct subscription performance, the financial impact of Rise Wellness's packaging issue, and the company's evolution toward omni-channel distribution. The company reconfirmed its full-year revenue guidance of $962.5 million at the midpoint and reiterated adjusted EPS guidance of $2.12 at the midpoint, with EBITDA guidance of $105 million at the midpoint.

Usana Health Sciences shares fell 30% this week after the company reported second-quarter earnings and revenue well below analyst expectations and lowered its full-year outlook. Adjusted earnings per share came in at $0.07, missing the consensus estimate by $0.50, while revenue of roughly $223 million was about $12 million below forecasts. The company also announced a $29 million goodwill impairment charge on its Hiya business, leading it to now expect a full-year loss of approximately $11 million, down from prior guidance for a profit between $20 million and $27 million. Full-year sales guidance was reduced from a range of $925 million to $1 billion to $910 million, reflecting weaker performance in the Hiya and Rise segments despite some stabilization in the core nutrition business.

USANA Health Sciences lowered its full-year 2026 outlook and disclosed a preliminary noncash goodwill impairment charge of $29 million related to its Hiya reporting unit. CFO G. Hekking attributed the lowered guidance to a more difficult and expensive direct-to-consumer digital marketing environment affecting Hiya’s second-half net sales and lower near-term net sales from Rise Wellness, which experienced a packaging issue that disrupted commercial execution during the quarter. The company recorded $9 million in income tax expense on a pretax loss of $19 million, while ending the quarter with $169 million in cash, zero debt, and $20 million of free cash flow. Management emphasized that the impairment does not reflect a change in commitment to the business and that the outlook revision is about near-term timing rather than long-term conviction in either venture company. CEO Kevin Guest noted that the core nutritional business is performing in line with expectations, with Mainland China showing renewed strength.

StockStory identifies 1st Source Corporation as a small-cap stock worth investigating, while expressing caution on USANA Health Sciences and Black Stone Minerals. 1st Source, a regional bank with a $1.87 billion market cap, stands out for its net interest margin expansion of 66.4 basis points over two years, 12.7% annual earnings per share growth over five years, and 9.4% annual tangible book value per share growth. In contrast, USANA, with a $366.9 million market cap, has seen annual sales decline 1.7% over three years and earnings per share fall 19% annually, while Black Stone Minerals, at a $2.94 billion market cap, faces a 28.1 percentage point drop in EBITDA margin over five years due to costs rising faster than revenue.