Results
USANA Health Sciences Inc.
11/12/2026 | Press release | Distributed by Public on 11/12/2026 12:56
Quarterly Report for Quarter Ending October 3, 2026 (Form 10-Q)
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Management's Discussion and Analysis of Financial Condition and Results of Operations ("MD&A") is designed to provide an understanding of USANA's financial condition, results of operations and cash flows by reviewing certain key indicators and measures of performance.
The MD&A is presented in six sections as follows:
•Overview
•Products
•Customers
•Non-GAAP Financial Measures
•Results of Operations
•Liquidity and Capital Resources
This discussion and analysis from management's perspective should be read in conjunction with the unaudited condensed consolidated financial statements and Notes thereto that are contained in this quarterly report, as well as Part II, Item 7, Management's Discussion and Analysis of Financial Condition and Results of Operations of our Annual Report on Form 10-K for the year ended January 3, 2026 ("2025 Form 10-K"), filed with the SEC on March 16, 2026, and our other filings, including the Current Reports on Form 8-K, that have been filed with the SEC through the date of this report. Forward-looking statements in Part I, Item 2 may involve risks and uncertainties that could cause results to differ materially from those projected (refer to the section entitled "Cautionary Note Regarding Forward-Looking Statements and Certain Risks" on page 1 and the risk factors provided in Part II, Item 1A for discussion of these risks and uncertainties).
Overview
We develop and manufacture high quality nutritional supplements, functional foods and personal care products that are sold throughout the world. Historically, we have distributed our products through the direct selling channel, because we believe it is conducive to our vision of improving the overall health and nutrition of individuals and families around the world. On December 23, 2024, we acquired a 78.85% controlling ownership interest in Hiya, a leading provider of high-quality children's health and wellness products. We believe that the addition of Hiya to our business promotes our vision and adds a diversified layer of growth in the direct-to-consumer channel. In 2022, we acquired Rise and have expanded Rise's product offering, distribution channel, and customer base since its acquisition. Consequently, through our Core Nutritional business, Hiya, and Rise, we now operate and sell products through an omni-channel platform, which includes direct selling, direct-to-consumer, third-party marketplace and retail channels and organize our business into three reportable segments: Core Nutritional, Hiya, and Rise.
Core Nutritional: Core Nutritional is our primary business with approximately 83% of consolidated net sales during the nine months ended October 3, 2026. Our Core Nutritional customer base is primarily comprised of two types of customers: "Brand Partners" and "Preferred Customers," referred to together as "active Customers." Our Brand Partners also sell our products to retail customers. Brand Partners share in our company vision by acting as independent distributors of our products in addition to purchasing our products for their personal use. In 2023, we launched our Affiliate program in the United States, Canada, and Mexico, which offers another sales and compensation opportunity to individuals who are interested in selling USANA products. Affiliates are discussed and reported in the report as part of our Brand Partners. Preferred Customers purchase our products strictly for personal use and are not permitted to resell or to distribute the products. We only count as active Customers those Brand Partners and Preferred Customers who have purchased from us at any time during the most recent three-month period. As of October 3, 2026, we had approximately 356,000 active Customers worldwide in the Core Nutritional business.
We have Core Nutritional operations in multiple markets, with sales and expenses being generated and incurred in multiple currencies. Our reported U.S. dollar sales and earnings can be significantly affected by fluctuations in currency exchange rates. In general, our operating results are affected positively by a weakening of the U.S. dollar and negatively by a strengthening of the U.S. dollar. During the nine months ended October 3, 2026, net sales outside of the United States represented 90.8% of Core Nutritional net sales. In our net sales discussions that follow, we approximate the impact of currency fluctuations on net sales by translating current year sales at the average exchange rates in effect during the comparable periods of the prior year.
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Hiya: Hiya operates and sells products to customers in the United States, Canada, and the United Kingdom. Hiya's customers purchase Hiya products for personal use primarily through a subscription model, which is intended to provide a steady, predictable income stream for Hiya. The ongoing nature of subscriptions fosters stronger relationships with customers by making it easier for them to receive products regularly, which we believe leads to retention and loyalty. Hiya's subscription model also provides important data on customer preferences and behaviors, which enables personalized offerings, efficient marketing and data-driven innovation insights. We evaluate Hiya's customer counts and behavior through their monthly subscribers and only count as "active Monthly Subscribers" those Hiya customers who have purchased from Hiya at any time during the most recent month. Hiya expanded distribution into retail during the first quarter of 2026.
Rise: Rise manufactures and sells high-quality protein bars, powdered drinks, and clear protein drinks that are formulated to help customers achieve their health goals through clean and simple ingredients. Rise's revenue is generated primarily from sales to large national retailers and club retailers.
The following tables summarize operating results as a percentage of net sales for the current and prior-year periods, as indicated:
| Three months ended | ||||||||||||||||||||||||||||||||||||||||||||||||||
| October 3, 2026 | September 27, 2025 | |||||||||||||||||||||||||||||||||||||||||||||||||
| Core Nutritional | Hiya | Rise | Consolidated | Core Nutritional | Hiya | Rise | Consolidated | |||||||||||||||||||||||||||||||||||||||||||
| Net sales | 100.0% | 100.0% | 100.0% | 100.0% | 100.0% | 100.0% | 100.0% | 100.0% | ||||||||||||||||||||||||||||||||||||||||||
| Cost of sales | 19.9% | 33.9% | 110.4% | 23.7% | 18.8% | 35.6% | 70.2% | 22.8% | ||||||||||||||||||||||||||||||||||||||||||
| Gross profit | 80.1% | 66.1% | (10.4%) | 76.3% | 81.2% | 64.4% | 29.8% | 77.2% | ||||||||||||||||||||||||||||||||||||||||||
| Operating expenses: | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Brand Partner incentives | 42.1% | -% | -% | 34.9% | 44.1% | -% | -% | 36.4% | ||||||||||||||||||||||||||||||||||||||||||
| Selling, general and administrative | 33.9% | 86.2% | 46.0% | 42.1% | 35.9% | 66.5% | 32.5% | 40.2% | ||||||||||||||||||||||||||||||||||||||||||
| Goodwill impairment | -% | -% | -% | -% | -% | -% | -% | -% | ||||||||||||||||||||||||||||||||||||||||||
| Total operating expenses | 76.0% | 86.2% | 46.0% | 77.0% | 80.0% | 66.5% | 32.5% | 76.6% | ||||||||||||||||||||||||||||||||||||||||||
| (Loss) earnings from operations | 4.1% | (20.1%) | (56.4%) | (0.7%) | 1.2% | (2.1%) | (2.7%) | 0.6% | ||||||||||||||||||||||||||||||||||||||||||
| Amortization of acquired intangible assets | -% | 14.1% | 1.6% | 2.2% | 0.1% | 14.5% | 3.2% | 2.2% | ||||||||||||||||||||||||||||||||||||||||||
| Nine months ended | ||||||||||||||||||||||||||||||||||||||||||||||||||
| October 3, 2026 | September 27, 2025 | |||||||||||||||||||||||||||||||||||||||||||||||||
| Core Nutritional | Hiya | Rise | Consolidated | Core Nutritional | Hiya | Rise | Consolidated | |||||||||||||||||||||||||||||||||||||||||||
| Net sales | 100.0% | 100.0% | 100.0% | 100.0% | 100.0% | 100.0% | 100.0% | 100.0% | ||||||||||||||||||||||||||||||||||||||||||
| Cost of sales | 18.9% | 32.3% | 95.4% | 23.0% | 18.2% | 36.7% | 67.5% | 21.7% | ||||||||||||||||||||||||||||||||||||||||||
| Gross profit | 81.1% | 67.7% | 4.6% | 77.0% | 81.8% | 63.3% | 32.5% | 78.3% | ||||||||||||||||||||||||||||||||||||||||||
| Operating expenses: | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Brand Partner incentives | 43.1% | -% | -% | 35.9% | 43.4% | -% | -% | 36.4% | ||||||||||||||||||||||||||||||||||||||||||
| Selling, general and administrative | 31.4% | 79.5% | 31.4% | 37.9% | 32.9% | 60.8% | 43.9% | 37.1% | ||||||||||||||||||||||||||||||||||||||||||
| Goodwill impairment | -% | 31.7% | -% | 4.3% | -% | -% | -% | -% | ||||||||||||||||||||||||||||||||||||||||||
| Total operating expenses | 74.5% | 111.2% | 31.4% | 78.1% | 76.3% | 60.8% | 43.9% | 73.5% | ||||||||||||||||||||||||||||||||||||||||||
| (Loss) earnings from operations | 6.6% | (43.5%) | (26.8%) | (1.1%) | 5.5% | 2.5% | (11.4%) | 4.8% | ||||||||||||||||||||||||||||||||||||||||||
| Amortization of acquired intangible assets | -% | 14.5% | 2.3% | 2.0% | 0.1% | 13.1% | 5.9% | 2.0% | ||||||||||||||||||||||||||||||||||||||||||
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For more information relating to our reportable segments, see Note K to our condensed consolidated financial statements.
Products
The following table summarizes the approximate percentage of total product revenue for the Core Nutritional business that has been contributed by major product lines and our top-selling products for the current and prior-year periods, as indicated:
| Nine months ended | ||||||||||||||
| October 3, 2026 | September 27, 2025 | |||||||||||||
| Product line | ||||||||||||||
| USANA® Nutritionals | ||||||||||||||
| Optimizers | 71% | 71% | ||||||||||||
|
Essentials/CellSentials(1)
|
15% | 16% | ||||||||||||
|
USANA Foods(2)
|
8% | 6% | ||||||||||||
| Personal care and Skincare | 6% | 6% | ||||||||||||
| All other | -% | 1% | ||||||||||||
| Key product | ||||||||||||||
| USANA® Essentials/CellSentials | 9% | 10% | ||||||||||||
| Proflavanol® | 8% | 9% | ||||||||||||
| Probiotic | 7% | 8% | ||||||||||||
______________________________
(1)Represents a product line consisting of multiple products, as opposed to the actual USANA® Essentials / CellSentials product.
(2)Includes our Active Nutrition line.
The following table summarizes the approximate percentage of total product revenue for our Hiya segment that has been contributed by major product lines for the current and prior-year periods, as indicated:
| Nine months ended | ||||||||||||||
| Product line | October 3, 2026 | September 27, 2025 | ||||||||||||
| Kids Daily Multivitamin | 55% | 54% | ||||||||||||
| Kids Daily Probiotic | 13% | 14% | ||||||||||||
| Kids Daily Greens and Superfoods | 11% | 13% | ||||||||||||
| Kids Bedtime Essentials | 11% | 11% | ||||||||||||
| Kids Daily Iron | 5% | 4% | ||||||||||||
| Kids Daily Hydration | 2% | 1% | ||||||||||||
| Kids Daily Immune | 1% | 3% | ||||||||||||
| Kids Daily Fiber+ | 1% | -% | ||||||||||||
| Kids Daily Growth + Protein | 1% | -% | ||||||||||||
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The following table summarizes the approximate percentage of total product revenue for our Rise segment that has been contributed by major product lines for the current and prior-year periods, as indicated:
| Nine months ended | ||||||||||||||
| Product line | October 3, 2026 | September 27, 2025 | ||||||||||||
|
Protein Pop (1)
|
68% | 14% | ||||||||||||
| Bars | 30% | 81% | ||||||||||||
| Powders | 2% | 5% | ||||||||||||
______________________________
(1)Protein Pop was launched in the third quarter of 2025.
Customers
Core Nutritional
Because we primarily sell our products to a customer base of independent Brand Partners and Preferred Customers, we increase our sales by increasing the number of our active Customers, the amount they spend on average, or both. Our primary focus continues to be increasing the number of active Customers. We believe this focus is consistent with our vision of improving the overall health and nutrition of individuals and families around the world. Increases or decreases in product sales are typically the result of variations in the volume of product sold relating to fluctuations in the number of active Customers purchasing our products. The number of active Customers is, therefore, used by management as a key non-financial indicator to evaluate our operational performance.
Sales to Brand Partners accounted for approximately 51% of Core Nutritional business sales during the nine months ended October 3, 2026, with the remainder of our sales generated from Preferred Customers. As of October 3, 2026, Brand Partners and Preferred Customers represented approximately 46% and 54%, respectively, of the total active Customer base for the quarter in the Core Nutritional business. The table below summarizes the changes in our active Customer base for the Core Nutritional business by geographic region, rounded to the nearest thousand as of the dates indicated:
| Total active Customers by region | Change from prior year | Percent change | |||||||||||||||||||||||||||||||||
|
As of October 3, 2026 |
As of September 27, 2025 |
||||||||||||||||||||||||||||||||||
| Asia Pacific: | |||||||||||||||||||||||||||||||||||
| Greater China | 192,000 | 53.9 | % | 210,000 | 54.1 | % | (18,000) | (8.6 | %) | ||||||||||||||||||||||||||
| Southeast Asia Pacific | 61,000 | 17.2 | % | 61,000 | 15.7 | % | - | - | % | ||||||||||||||||||||||||||
| North Asia | 30,000 | 8.4 | % | 37,000 | 9.6 | % | (7,000) | (18.9 | %) | ||||||||||||||||||||||||||
| Asia Pacific total | 283,000 | 79.5 | % | 308,000 | 79.4 | % | (25,000) | (8.1 | %) | ||||||||||||||||||||||||||
| Americas and Europe | 73,000 | 20.5 | % | 80,000 | 20.6 | % | (7,000) | (8.8 | %) | ||||||||||||||||||||||||||
| 356,000 | 100.0 | % | 388,000 | 100.0 | % | (32,000) | (8.2 | %) | |||||||||||||||||||||||||||
Hiya
Hiya's active Monthly Subscribers are comprised of two types: first-time customers and recurring customers. First-time customers are viewed as an investment as the customer is provided a discount, and shipping costs are higher due to the inclusion of a refillable glass bottle. Additionally, as Hiya is primarily a direct-to-consumer company, customer acquisition is heavily influenced by the level of marketing spend. Recurring customers are not provided the same discount, and shipping costs are lower on refill orders. Both gross margins as well as operating margins improve with recurring customer orders, therefore, profitability margins are affected by sales mix between these two types of customers. As of September 30, 2026 and September 30, 2025, Hiya had approximately 195,500 and 193,400 active Monthly Subscribers, respectively.
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Rise
Rise sells its products primarily to large national retailers and club retailers throughout the United States. Rise does not operate under long-term supply agreements with any of its retail customers. Instead, sales are generally made pursuant to purchase orders. As a result, our revenue in any given period is dependent on ordering patterns and inventory management decisions made by our retail customers, which can be difficult to predict and may vary significantly from period to period. Rise offers trade promotions, discounts, spoilage, and other retailer deductions, which are recorded as reductions to gross revenue.
Non-GAAP Financial Measures
We believe that presentation of certain non-GAAP financial information is meaningful and useful in understanding the activities and business metrics of our operations. Management believes these measures reflect an additional way of viewing aspects of our business that, when viewed with our U.S. GAAP results, provide a more complete understanding of factors and trends affecting our business. This non-GAAP financial information may be determined or calculated differently by other companies, limiting the usefulness of those measures for comparative purposes. We provide such non-GAAP financial information for informational purposes only. Readers should consider the information in addition but not instead of or superior to, our condensed consolidated financial statements prepared in accordance with U.S. GAAP, accompanying this report.
In analyzing business trends and performance, management uses "constant currency" net sales, "local currency" net sales, and other currency-related financial information terms to discuss our financial results in a way we believe is helpful in understanding the impact of fluctuations in foreign-currency exchange rates and facilitating period-to-period comparisons of results of operations and providing investors an additional perspective on trends and underlying business results. Changes in our reported revenue and profits in this report include the impacts of changes in foreign currency exchange rates. As additional information to the reader, we provide constant currency assessments in the tables and the narrative information in this MD&A to remove or quantify the impact of the fluctuation in foreign exchange rates and utilize constant currency results in our analysis of performance. Our constant currency financial results are calculated by translating the current period's financial results at the same average exchange rates in effect during the applicable prior-year period and then comparing this amount to the prior-year period's financial results.
Results of Operations
Summary of Financial Results
Net sales for the third quarter of 2026 decreased 3.6% to $205.9 million, a decrease of $7.8 million, compared with the prior-year quarter. The decrease in sales is primarily the result of a decline in both the Core Nutritional and Rise segments of $5.5 million and $3.0 million, respectively, partially offset by a $0.7 million increase in net sales for the Hiya segment. Additionally, favorable changes in currency exchange rates positively impacted Core Nutritional net sales by an estimated $4.2 million in the current-year quarter.
Net loss attributable to USANA for the third quarter of 2026 was $5.6 million, an improvement of $0.9 million, compared with a net loss of $6.5 million during the prior-year quarter. The change is primarily attributable to lower operating expenses, partially offset by a decrease in net sales and a higher effective tax rate.
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Three months ended October 3, 2026 and September 27, 2025
Net Sales
The following table summarizes the changes in net sales by segment for the fiscal quarters ended as of the dates indicated:
|
Net sales by region (in thousands) |
Change from prior year | Percent change |
Currency impact on sales |
Percent change excluding currency impact | |||||||||||||||||||||||||||||||||||||||||||
| Three months ended | |||||||||||||||||||||||||||||||||||||||||||||||
| October 03, 2026 | September 27, 2025 | ||||||||||||||||||||||||||||||||||||||||||||||
| Core Nutritional: | |||||||||||||||||||||||||||||||||||||||||||||||
| Asia Pacific | |||||||||||||||||||||||||||||||||||||||||||||||
| Greater China | $ | 93,882 | 45.6 | % | $ | 92,571 | 43.3 | % | $ | 1,311 | 1.4 | % | $ | 4,109 | (3.0 | %) | |||||||||||||||||||||||||||||||
| Southeast Asia Pacific | 29,885 | 14.5 | % | 29,178 | 13.7 | % | 707 | 2.4 | % | 138 | 2.0 | % | |||||||||||||||||||||||||||||||||||
| North Asia | 14,221 | 6.9 | % | 17,690 | 8.3 | % | (3,469) | (19.6 | %) | (246) | (18.2 | %) | |||||||||||||||||||||||||||||||||||
| Asia Pacific total | 137,988 | 67.0 | % | 139,439 | 65.3 | % | (1,451) | (1.0 | %) | 4,001 | (3.9 | %) | |||||||||||||||||||||||||||||||||||
| Americas and Europe | 32,709 | 15.9 | % | 36,780 | 17.2 | % | (4,071) | (11.1 | %) | 203 | (11.6 | %) | |||||||||||||||||||||||||||||||||||
| Core Nutritional total | 170,697 | 82.9 | % | 176,219 | 82.5 | % | (5,522) | (3.1 | %) | 4,204 | (5.5 | %) | |||||||||||||||||||||||||||||||||||
| Hiya | 31,545 | 15.3 | % | 30,846 | 14.4 | % | 699 | 2.3 | % | - | 2.3 | % | |||||||||||||||||||||||||||||||||||
| Rise | 3,643 | 1.8 | % | 6,605 | 3.1 | % | (2,962) | (44.8 | %) | - | (44.8 | %) | |||||||||||||||||||||||||||||||||||
| Consolidated total | $ | 205,885 | 100.0 | % | $ | 213,670 | 100.0 | % | $ | (7,785) | (3.6 | %) | $ | 4,204 | (5.6 | %) | |||||||||||||||||||||||||||||||
Core Nutritional Net Sales
Net sales in the Core Nutritional business for the three-month period ended October 3, 2026 were $170.7 million, down 3.1% when compared to the corresponding period of 2025. On a constant currency basis, net sales in the Core Nutritional business declined 5.5%. The decrease in Core Nutritional net sales was mainly due to the decrease in active Customers of 8.2%, partially offset by an increase in average spend per customer.
Asia Pacific: Net sales declined 1.0%, or 3.9% on a constant currency basis during the current-year quarter, primarily due to an 8.1% decline in active Customers, partially offset by a 5.6% increase in average spend per active Customer.
The following table summarizes changes in local currency net sales, active Customer counts, and average spend per active Customer for the markets primarily contributing to the decline in net sales within the Asia Pacific region:
| Market | Local currency net sales | Active Customers | Average spend per active Customer | |||||||||||||||||
| South Korea | (18.4%) | (19.4%) | 1.3% | |||||||||||||||||
|
China
|
(1.4%) | (9.2%) | 8.6% | |||||||||||||||||
| Malaysia | (7.2%) | (16.7%) | 11.2% | |||||||||||||||||
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Americas and Europe: Net sales declined 11.1%, or 11.6% on a constant currency basis during the current-year quarter, primarily due to an 8.8% decline in active Customers and a 2.2% decline in average spend per active Customer. Year-over-year results in this region reflect a continued challenging environment to attract new customers.
The following table summarizes changes in local currency net sales, active Customer counts, and average spend per active Customer for the markets primarily contributing to the decline in net sales within the Americas and Europe region:
| Market | Local currency net sales | Active Customers | Average spend per active Customer | |||||||||||||||||
|
United States
|
(10.0%) | (2.9%) | (7.3%) | |||||||||||||||||
|
Canada
|
(13.4%) | (11.1%) | (2.5%) | |||||||||||||||||
Hiya Net Sales
Net sales in the Hiya segment for the three-month period ended October 3, 2026 were $31.5 million, up 2.3% when compared to the corresponding period of 2025. Net sales through retail and amazon as well as an increase in new customers in the DTC channel supported the year-over-year increase.
Rise Net Sales
Net sales in the Rise segment for the three-month period ended October 3, 2026 were $3.6 million, down 44.8% when compared to the corresponding period of 2025. The decrease was primarily due to higher retail sales in the prior-year quarter.
Gross Profit
Consolidated gross profit decreased 90 basis points to 76.3% of net sales, down from 77.2% in the prior-year quarter. Gross profit margin in the Core Nutritional business declined 110 basis points from the prior year to 80.1% of segment net sales, reflecting production inefficiencies driven by lower production levels, and an increase in inventory scrap reserves, partially offset by a favorable change in market sales mix. Hiya gross margins increased 170 basis points from the prior year to 66.1% of segment net sales, largely reflecting savings in shipping costs and decreased inventory scrap costs. Rise gross margins of (10.4%) primarily reflected increased inventory scrap reserves, partially offset by a favorable change in sales mix with a higher concentration of retail sales in the prior-year quarter that carry a lower gross margin.
Brand Partner Incentives
Brand Partner incentives expense is incurred only in the Core Nutritional segment. Brand Partner incentives decreased 150 basis points to 34.9% of consolidated net sales, down from 36.4% in the prior-year quarter. Brand Partner incentives for the Core Nutritional business were down 200 basis points year-over-year at 42.1% of segment net sales. This decrease can be primarily attributed to higher incentives in the prior-year quarter related to the early introduction of new compensation plan bonuses, partially offset by an unfavorable change in market mix.
Selling, General and Administrative Expenses
Selling, general and administrative expenses increased slightly by $0.8 million in absolute terms during the current-year quarter, or 190 basis points relative to net sales. Selling, general and administrative expenses for the Core Nutritional business decreased 200 basis points from the prior year to 33.9% of segment net sales. The decrease is primarily attributable to lower employee compensation associated with the cost realignment initiatives that took place in the fourth quarter of 2025 and reduced convention costs compared to the prior-year period. Hiya, which operates with higher relative selling, general and administrative expenses compared to the Core Nutritional business, experienced a notable increase in relative expense from 66.5% to 86.2% of segment net sales that can primarily be attributed to higher advertising and marketing costs. Although small in absolute terms, Rise experienced a notable increase in relative expense from 32.5% to 46.0% of segment net sales, primarily as a result of lower net sales and continued investment to build its retail opportunity.
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Income Taxes
Income tax expense totaled $6.1 million during the third quarter of 2026 on losses before income taxes of $0.8 million, a decrease of $2.4 million from the prior-year quarter. The decrease in income tax expense is due to lower earnings in China and other non-U.S. markets. The variation from the Company's customary effective tax rate relationship is primarily attributable to an unfavorable shift in the jurisdictional mix of the Company's earnings, such that losses generated in certain markets are not producing a corresponding income tax benefit while income earned in other, generally higher-taxed, jurisdictions continues to generate income tax expense. See also Note L to the condensed consolidated financial statements.
Diluted (Loss) Earnings per Share Attributable to USANA
Diluted loss per share attributable to USANA improved to $(0.30) during the third quarter of 2026 compared to $(0.36) in the prior-year quarter primarily as a result of lower income tax expense.
Nine months ended October 3, 2026 and September 27, 2025
Net Sales
The following table summarizes the changes in net sales by segment for the nine months ended as of the dates indicated:
|
Net Sales by Region (in thousands) |
Change from prior year |
Percent change |
Currency impact on sales |
Percent change excluding currency impact |
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| Nine months ended | |||||||||||||||||||||||||||||||||||||||||||||||
|
October 3, 2026 |
September 27, 2025 |
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| Core Nutritional: | |||||||||||||||||||||||||||||||||||||||||||||||
| Asia Pacific | |||||||||||||||||||||||||||||||||||||||||||||||
| Greater China | $ | 331,830 | 48.9 | % | $ | 324,488 | 46.4 | % | $ | 7,342 | 2.3 | % | $ | 14,325 | (2.2 | %) | |||||||||||||||||||||||||||||||
| Southeast Asia Pacific | 89,267 | 13.1 | % | 97,785 | 14.0 | % | (8,518) | (8.7 | %) | 2,856 | (11.6 | %) | |||||||||||||||||||||||||||||||||||
| North Asia | 43,387 | 6.4 | % | 53,797 | 7.7 | % | (10,410) | (19.4 | %) | (1,397) | (16.8 | %) | |||||||||||||||||||||||||||||||||||
| Asia Pacific total | 464,484 | 68.4 | % | 476,070 | 68.1 | % | (11,586) | (2.4 | %) | 15,784 | (5.7 | %) | |||||||||||||||||||||||||||||||||||
| Americas and Europe | 102,217 | 15.0 | % | 110,461 | 15.8 | % | (8,244) | (7.5 | %) | 2,158 | (9.4 | %) | |||||||||||||||||||||||||||||||||||
| Core Nutritional total | 566,701 | 83.4 | % | 586,531 | 83.9 | % | (19,830) | (3.4 | %) | 17,942 | (6.4 | %) | |||||||||||||||||||||||||||||||||||
| Hiya | 91,957 | 13.5 | % | 101,866 | 14.6 | % | (9,909) | (9.7 | %) | - | (9.7 | %) | |||||||||||||||||||||||||||||||||||
| Rise | 20,718 | 3.1 | % | 10,660 | 1.5 | % | 10,058 | 94.4 | % | - | 94.4 | % | |||||||||||||||||||||||||||||||||||
| Consolidated total | $ | 679,376 | 100.0 | % | $ | 699,057 | 100.0 | % | $ | (19,681) | (2.8 | %) | $ | 17,942 | (5.4 | %) | |||||||||||||||||||||||||||||||
Core Nutritional Net Sales
Net sales in the Core Nutritional business for the nine-month period ended October 3, 2026 were $566.7 million, down 3.4% when compared to the corresponding period of 2025. On a constant currency basis, net sales in the Core Nutritional business declined 6.4%. The decrease in Core Nutritional net sales was mainly due to a 9.6% decrease in active Customers, partially offset by an increase in average spend per active Customer of 3.2%.
Asia Pacific: Net sales declined 2.4%, or 5.7% on a constant currency basis during the current-year period. Active Customers declined 10.0% year-over-year, partially offset by 4.2% higher average spend per customer. The net sales decline in this region reflects a continued challenging environment to attract new customers.
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The following table summarizes changes in local currency net sales, active Customer counts, and average spend per active Customer for the markets primarily contributing to the decline in net sales within the Asia Pacific region:
| Market | Local currency net sales | Active Customers | Average spend per active Customer | |||||||||||||||||
| South Korea | (17.0%) | (21.6%) | 5.5% | |||||||||||||||||
| Malaysia | (18.9%) | (27.0%) | 10.7% | |||||||||||||||||
| China | (2.3%) | (7.4%) | 5.5% | |||||||||||||||||
Americas and Europe: Net sales declined 7.5%, or 9.4% on a constant currency basis during the current-year period, primarily due to a 7.7% decline in active Customers and a 0.9% decline in average spend per active Customer. Year-over-year results in this region reflect a continued challenging environment to attract new customers.
The following table summarizes changes in local currency net sales, active Customer counts, and average spend per active Customer for the markets primarily contributing to the decline in net sales within the Americas and Europe region:
| Market | Local currency net sales | Active Customers | Average spend per active Customer | |||||||||||||||||
| Canada | (12.2%) | (7.2%) | (5.5%) | |||||||||||||||||
|
United States
|
(5.4%) | (1.9%) | (3.5%) | |||||||||||||||||
Hiya Net Sales
Net sales in the Hiya segment for the nine-month period ended October 3, 2026 were $92.0 million, down 9.7% when compared to the corresponding period of 2025. The decrease was driven by a challenging digital marketing environment in the first half of 2026, which created pressure in both net sales and subscriber growth during this period, partially offset by improvements in the third quarter as discussed above.
Rise Net Sales
Net sales in the Rise segment for the nine-month period ended October 3, 2026 were $20.7 million, up $10.1 million, or 94.4%, when compared to the corresponding period of 2025. The increase was primarily the result of timing of the Protein Pop launch in large national retailers and club retailers late in the third quarter of 2025.
Gross Profit
Gross profit decreased 130 basis points to 77.0% of net sales, down from 78.3% for the nine months ended September 27, 2025. Gross profit margin in the Core Nutritional business declined 70 basis points from the prior year to 81.1% of segment net sales, reflecting production inefficiencies driven by lower production levels, partially offset by favorable changes in currency and market sales mix. Hiya gross margins increased 440 basis points from the prior year to 67.7% of segment net sales, largely reflecting savings in shipping costs, favorable sales mix, and an acquisition related inventory basis step-up in the prior year. Rise gross margins of 4.6% primarily reflected an unfavorable change in sales mix with a higher concentration of retail sales in the current year-to-date period that carry a lower gross margin and increased inventory scrap reserves.
Brand Partner Incentives
Brand Partner incentives expense is incurred only in the Core Nutritional segment. Brand Partner incentives decreased 50 basis points to 35.9% of consolidated net sales, down from 36.4% in the prior-year period. Brand Partner incentives for the Core Nutritional segment were down 30 basis points year-over-year at 43.1% of segment net sales. This decrease can be primarily attributed to incremental bonuses in the prior-year period resulting from the early introduction of the new compensation plan and price changes, partially offset by an increase in incentive promotions and an unfavorable change in market mix.
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Selling, General and Administrative Expenses
Selling, general and administrative expenses decreased $2.0 million in absolute terms during the current-year period, but increased 80 basis points from a relative perspective. Selling, general and administrative expenses for the Core Nutritional business decreased 150 basis points to 31.4% of segment net sales. The decrease is primarily attributable to lower employee compensation associated with the cost realignment initiatives that took place in the fourth quarter of 2025. Hiya, which operates with higher relative selling, general and administrative expenses compared to the Core Nutritional business, experienced a notable increase in relative expense from 60.8% to 79.5% of segment net sales that can primarily be attributed to higher advertising and marketing costs. Although small in absolute terms, Rise experienced an increase in absolute terms of $1.8 million during the current-year period, but decreased from 43.9% to 31.4% of segment net sales, as a result of leverage gained on higher net sales.
Goodwill Impairment
During the second quarter of 2026, due to lower-than-expected performance and changes in the near-term forecast in the Hiya reporting unit, the Company took additional steps to perform an interim goodwill impairment test. As a result of this analysis, the Company recorded a non-cash goodwill impairment charge of $29.1 million. This non-cash charge primarily reflects the current performance and changes in near-term forecasts, as well as updated valuation assumptions under applicable accounting standards, including adjustments to market multiples and discount rates. The impairment does not reflect a change in management's commitment to the business. The Company remains confident in the future of Hiya and recognizes its strategic importance as part of the Company's consolidated long-term growth strategy as Hiya leverages its brand across additional channels and international markets. There was no comparable goodwill impairment charge in the nine months ended September 27, 2025.
Income Taxes
Income tax expense totaled $23.6 million during the nine-month period ended October 3, 2026 on losses before income taxes of $4.2 million, a decrease of $0.6 million from the prior-year period. The decline in income tax expense is due to the lower earnings in China and other non-U.S. markets. The variation from the Company's customary effective tax rate relationship is primarily attributable to an unfavorable shift in the jurisdictional mix of the Company's earnings, such that losses generated in certain markets are not producing a corresponding income tax benefit while income earned in other, generally higher-taxed, jurisdictions continues to generate income tax expense. See also Note L to the condensed consolidated financial statements.
Diluted (Loss) Earnings per Share Attributable to USANA
Diluted (loss) earnings per share attributable to USANA decreased to $(1.05) during the nine months ended October 3, 2026 as compared to $0.67 reported in the prior year primarily as a result of lower earnings from operations and the non-cash charge for goodwill impairment.
Liquidity and Capital Resources
We have historically met our working capital and capital expenditure requirements by using net cash flow from operations and by drawing on our line of credit. Our principal source of liquidity is our operating cash flow. Although we are required to maintain cash deposits with banks in certain of our markets, there are currently no material restrictions on our ability to transfer and remit funds among our international markets. In China, however, our compliance with Chinese accounting and tax regulations promulgated by the State Administration of Foreign Exchange ("SAFE") results in transfer and remittance of our profits and dividends from China to the United States on a delayed basis. If SAFE or other Chinese regulators introduce new regulations or change existing regulations which allow foreign investors to remit profits and dividends earned in China to other countries, our ability to remit profits or pay dividends from China to the United States may be limited in the future.
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We believe our current liquidity, through cash flow from operations along with our line of credit, is adequate to meet our cash requirements and sustain our operations. Maintaining a capital structure that emphasizes sufficient liquidity and adaptability in the prevailing economic climate is our top priority. We actively assess potential acquisition opportunities and investments in complementary ventures. While we continuously aim to preserve ample liquidity and ensure business continuity amid uncertainties, we also explore initiatives such as stock repurchases. These strategic decisions have the potential to impact our liquidity and the ability to navigate these challenging times effectively.
Cash and Cash Equivalents
Cash and cash equivalents increased to $178.9 million as of October 3, 2026, from $158.4 million as of January 3, 2026. Cash flow provided by operating activities was $45.0 million, offset by cash used in financing activities of $17.8 million, and cash used in investing activities of $10.2 million. Additionally, favorable changes in currency exchange rates have impacted cash and cash equivalents, and restricted cash by $3.5 million.
The table below presents concentrations of cash and cash equivalents by market for the periods indicated:
|
Cash and cash equivalents (in millions) |
|||||||||||
|
As of October 3, 2026 |
As of January 3, 2026 |
||||||||||
| United States | $ | 58.0 | $ | 28.5 | |||||||
| China | 79.7 | 89.3 | |||||||||
| All other markets | 41.2 | 40.6 | |||||||||
| Total cash and cash equivalents | $ | 178.9 | $ | 158.4 | |||||||
During the nine months ended October 3, 2026, our China subsidiary remitted profits through an annual dividend of $62.3 million to the United States, net of a loss from a dividend hedge and applicable taxes.
Cash Flows Provided by Operations
As discussed above, our principal source of liquidity comes from our net cash flow from operations.
Net cash flow provided by operating activities was $45.0 million for the first nine months of 2026. Net loss combined with adjustments of non-cash items and a decrease in inventory purchases contributed positively to our net cash flow provided by operating activities, partially offset by cash used to pay the 2025 annual employee bonus and accrued Brand Partner incentives.
Net cash flow provided by operating activities was $25.7 million for the first nine months of 2025. Net earnings combined with adjustments of non-cash items and an increase in accounts payable contributed positively to our net cash flow provided by operating activities, partially offset by purchases of inventories, cash used to pay the 2024 annual employee bonus, and accrued Brand Partner incentives.
Line of Credit
Information with respect to our line of credit may be found in Note G to the condensed consolidated financial statements included in Item 1 of Part I of this report.
Share Repurchases
Information with respect to share repurchases may be found in Note J to the condensed consolidated financial statements included in Item 1 of Part I of this report.
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Summary
We believe our current cash balances, future cash provided by operations, and amounts available under our line of credit will be sufficient to cover our operating and capital needs in the ordinary course of business for the foreseeable future. If we experience an adverse operating environment or unanticipated and unusual capital expenditure requirements, additional financing may be required. No assurance can be given, however, that additional financing, if required, would be available to us at all or on favorable terms. We might also require or seek additional financing for the purpose of expanding into new markets, growing our existing markets, mergers and acquisitions, or for other reasons. Such financing may include the use of debt or the sale of additional equity securities. Any financing which involves the sale of equity securities or instruments that are convertible into equity securities could result in immediate and possibly significant dilution to our existing shareholders.
Critical Accounting Policies
There were no changes during the quarter to our critical accounting policies as disclosed in our 2025 Form 10-K. Our significant accounting policies are disclosed in Note A to our Consolidated Financial Statements filed with our 2025 Form 10-K.
USANA Health Sciences Inc. published this content on November 12, 2026, and is solely responsible for the information contained herein. Distributed via EDGAR on November 12, 2026 at 18:57 UTC. If you believe the information included in the content is inaccurate or outdated and requires editing or removal, please contact us at [email protected]