USANA Q2 Revenue Flat At $ 257 Million
USANA Health Sciences, Inc. (NYSE: USNA) today announced financial results for its fiscal second quarter ended July 1, 2017.
Second quarter net sales were $257.1 million, a decrease of 0.6% year-over-year, but up 2.3% in constant currency.
Number of active Customers1 at quarter end increased 1.8% to 567,000.
Second quarter EPS of $0.93, or $0.98 excluding incremental expense related to the Company’s internal investigation of its China operations disclosed in February 2017.
Company revises 2017 Outlook.
Share repurchase authorization increased to $100 million.
For the second quarter of 2017, net sales were $257.1 million compared with $258.5 million in the prior-year period. On a constant currency basis, net sales increased by 2.3% for the second quarter of 2017.
A stronger U.S. dollar negatively impacted net sales by $7.4 million for the quarter with $5.7 million of this amount attributable to mainland China. The total number of active Customers increased by 1.8% year-over-year.
Net earnings for the second quarter were $23.3 million compared with $25.8 million during the prior-year period, a decrease of 9.7 percent. Higher SG&A and Associate Incentives expense negatively impacted net earnings during the quarter. These were partially offset by improved gross margins, which benefitted from changes in currency and annual price adjustments, as well as a lower effective tax rate.
Earnings per diluted share for the second quarter were $0.93 compared with $1.03 in the prior year period, a decrease of 9.7 percent. The expense related to the Company’s internal investigation into its China operations, which was disclosed in February 2017, negatively impacted earnings per diluted share by approximately $0.05.
Additionally, changes in currency negatively impacted earnings per diluted share by approximately $0.03. Weighted average diluted shares outstanding were 25.0 million for the second quarter of 2017, compared with 24.9 million in the prior-year period. The Company did not repurchase any shares during the quarter and finished the quarter with $229.4 million in cash and cash equivalents and no debt.
“Our second quarter revenue was essentially flat with the year-ago period, which represented the highest quarterly sales in the Company’s history,”
said Kevin Guest, Chief Executive Officer.
“In addition to the tough comparable, sales were softer than expected this quarter in several of our regions due to slower momentum and customer growth in the business. Supplier challenges with our MySmart foods line also negatively impacted our top-line results for the quarter. To counter these issues, we offered a successful short term promotion in China during the quarter and plan to offer additional promotions in several of our markets during the second half of the year. These promotions are designed to generate additional momentum and help grow the base of consumers using USANA’s best-in-class products.”
USANA develops and manufactures high-quality nutritional supplements, healthy foods and personal care products that are sold directly to Associates and Preferred Customers throughout the United States, Canada, Australia, New Zealand, Hong Kong, China, Japan, Taiwan, South Korea, Singapore, Mexico, Malaysia, the Philippines, the Netherlands, the United Kingdom, Thailand, France, Belgium, Colombia and Indonesia. More information on USANA can be found at www.usana.com.
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