USANA (USNA)

Health and wellness products company USANA Health Sciences (NYSE:USNA) met Wall Street’s revenue expectations in Q3 CY2025, with sales up 6.7% year on year to $213.7 million. The company’s outlook for the full year was close to analysts’ estimates with revenue guided to $920 million at the midpoint. Its non-GAAP loss of $0.15 per share was in line with analysts’ consensus estimates.

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.

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.

Competitors offering health and wellness supplements and products include Herbalife (NYSE:HLF), Bellring Brands (NYSE:BRBR), and The Simply Good Foods Company (NASDAQ:SMPL).

A company’s long-term sales performance is one signal of its overall quality. Even a bad business can shine for one or two quarters, but a top-tier one grows for years.

With $912.7 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 4.2% annually, a tough starting point for our analysis.

This quarter, USANA grew its revenue by 6.7% year on year, and its $213.7 million of revenue was in line with Wall Street’s estimates.

Looking ahead, sell-side analysts expect revenue to grow 2.3% over the next 12 months. Although this projection implies its newer products will catalyze better top-line performance, it is still below average for the sector.

All else equal, we prefer higher gross margins because they usually indicate that a company sells more differentiated products, has a stronger brand, and commands pricing power.

USANA has best-in-class unit economics for a consumer staples company, enabling it to invest in areas such as marketing and talent to grow its brand. As you can see below, it averaged an elite 80% gross margin over the last two years. That means for every $100 in revenue, only $20.00 went towards paying for raw materials, production of goods, transportation, and distribution.

USANA’s gross profit margin came in at 77.2% this quarter, marking a 3.2 percentage point decrease from 80.4% in the same quarter last year. USANA’s full-year margin has also been trending down over the past 12 months, decreasing by 1.7 percentage points. If this move continues, it could suggest a more competitive environment with some pressure to lower prices and higher input costs (such as raw materials and manufacturing expenses).

USANA was profitable over the last two years but held back by its large cost base. Its average operating margin of 7% was weak for a consumer staples business. This result is surprising given its high gross margin as a starting point.

Analyzing the trend in its profitability, USANA’s operating margin decreased by 5 percentage points over the last year. USANA’s performance was poor no matter how you look at it - it shows that costs were rising and it couldn’t pass them onto its customers.

This quarter, USANA’s breakeven margin was down 7.2 percentage points year on year. Since USANA’s operating margin decreased more than its gross margin, we can assume it was less efficient because expenses such as marketing, and administrative overhead increased.

Revenue trends explain a company’s historical growth, but the change in earnings per share (EPS) points to the profitability of that growth – for example, a company could inflate its sales through excessive spending on advertising and promotions.

In Q3, USANA reported adjusted EPS of negative $0.15, down from $0.56 in the same quarter last year. This print was close to analysts’ estimates. Over the next 12 months, Wall Street expects USANA’s full-year EPS of $1.96 to grow 14.8%.

If you’ve followed StockStory for a while, you know we emphasize free cash flow. Why, you ask? We believe that in the end, cash is king, and 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 5.7% over the last two years, slightly better than the broader consumer staples sector.

EPS and free cash flow tell us whether a company was profitable while growing its revenue. But was it capital-efficient? A company’s ROIC explains this by showing how much operating profit it makes compared to the money it has raised (debt and equity).

Although USANA hasn’t been the highest-quality company lately because of its poor revenue and EPS performance, it found a few growth initiatives in the past that worked out wonderfully. Its five-year average ROIC was 40.1%, splendid for a consumer staples business.

One of the best ways to mitigate bankruptcy risk is to hold more cash than debt.

USANA is a profitable, well-capitalized company with $148.2 million of cash and no debt. This position is 41.8% of its market cap and gives it the freedom to borrow money, return capital to shareholders, or invest in growth initiatives. Leverage is not an issue here.

Revenue and EPS met Wall Street's expectations. However, the company lowered full-year revenue and EPS guidance, which is usually a big negative. The stock traded down 10.2% to $18.80 immediately after reporting.

Updated: December 4, 2025 at 9:47 PM EST

Are you wondering whether to buy USANA or pass? We urge investors to not only consider the latest earnings results but also longer-term business quality and valuation as well.

USANA isn’t a terrible business, but it doesn’t pass our bar. First off, its revenue has declined over the last three years. And while its admirable gross margins are a wonderful starting point for the overall profitability of the business, the downside is its declining EPS over the last three years makes it a less attractive asset to the public markets. On top of that, its brand caters to a niche market.

USANA’s P/E ratio based on the next 12 months is 10.7x. While this valuation is reasonable, we don’t really see a big opportunity at the moment. We're fairly confident there are better stocks to buy right now.

Wall Street analysts have a consensus one-year price target of $39 on the company (compared to the current share price of $19.55).

Although the price target is bullish, readers should exercise caution because analysts tend to be overly optimistic. The firms they work for, often big banks, have relationships with companies that extend into fundraising, M&A advisory, and other rewarding business lines. As a result, they typically hesitate to say bad things for fear they will lose out. We at StockStory do not suffer from such conflicts of interest, so we’ll always tell it like it is.