USANA Health Sciences — Third Quarter 2026 Earnings Summary

Financial Performance

• Net sales for Q3 2026 were $206 million, a 4% decrease year-over-year (excluding a 2% favorable foreign exchange impact) and an 8% decrease sequentially.
• Net loss was $(5.6) million, an improvement from $(6.5) million in Q3 2025.
• Diluted EPS was $(0.30), compared to $(0.36) in the prior year period.
• Adjusted diluted EPS was $(0.11), compared to $(0.15) in the prior year period.
• Adjusted EBITDA was $12.1 million, a 13% decrease year-over-year and a 44% decrease sequentially.
• Free cash flow for the quarter was $8 million, with $36 million generated year-to-date.
• The company ended the quarter with $179 million in cash and cash equivalents and zero debt.
• Inventory totaled $93 million, a 13% decrease compared to year-end 2025.
• No shares were repurchased during the quarter; approximately $34 million remains under the current share repurchase authorization.

Guidance and Future Outlook

• Fiscal 2026 net sales guidance updated to approaching $900 million (previously $910 million).
• Fiscal 2026 Adjusted EBITDA guidance updated to $77 million (previously $80.5 million).
• Fiscal 2026 Net loss guidance updated to $(16) million (previously $(11) million).
• Fiscal 2026 Diluted EPS guidance updated to $(0.90) (previously $(0.61)).
• Fiscal 2026 Adjusted Diluted EPS guidance updated to $0.55 (previously $0.76).
• Segment-specific 2026 net sales guidance updated: Core Nutritional to $740 million (previously $750 million), Hiya to $130 million (previously $125 million), and Rise Wellness to $30 million (previously $35 million).
• Management expects continued sequential progress from Hiya in the fourth quarter regarding both net sales and Adjusted EBITDA.
• The company plans to enter 2027 with a strong balance sheet and clear priorities to deliver growth.

Business Segments and Product Lines

• Core Nutritional: Net sales were $171 million, down 3% year-over-year. Active customers totaled 356,000, down 8% year-over-year. Operating margin expanded year-over-year due to a leaner cost structure.
  • Asia Pacific Region: Net sales were $138 million, down 1% year-over-year. Active customers were 283,000, down 8% year-over-year.
    • Greater China: Net sales were $94 million, up 1% year-over-year. Active customers were 192,000, down 9% year-over-year.
    • North Asia: Net sales were $14 million, down 20% year-over-year. Active customers were 30,000, down 19% year-over-year.
    • Southeast Asia Pacific: Net sales were $30 million, up 2% year-over-year. Active customers were 61,000, flat year-over-year, with a 3% sequential increase.
  • Americas and Europe Region: Net sales were $33 million, down 11% year-over-year. Active customers were 73,000, down 9% year-over-year.
  • Initiatives include evolving the Brand Partner incentive plan to reward active customer growth, investing in digital marketing, and introducing product innovation in 2027.
• Hiya Health: Net sales were $32 million, up 2% year-over-year and up 12% sequentially. Active monthly subscribers were 195,500, up 1% year-over-year and up 18% sequentially.
  • Hiya added approximately 29,500 net active monthly subscribers sequentially.
  • Customer acquisition costs declined noticeably from the first half of the year.
  • Net sales through Target and Amazon more than doubled from the second quarter.
  • Marketing spend was increased to build on subscriber traction, which pressured margins.
• Rise Wellness: Net sales were $4 million, down 45% year-over-year but up 7% sequentially.
  • Launched Protein Pop Balance nationally at Target and online in September.
  • Target sales grew strongly from the second quarter.

Market and Competitive Landscape

• The company is executing a transformation to an omnichannel health and wellness company.
• Hiya continues to broaden its reach beyond direct-to-consumer, with updates expected in early 2027.
• Rise Wellness is building on a strengthening retail foundation.

Risks and Challenges

• Global economic conditions, inflationary pressure, and negative impacts on consumer demand and discretionary spending.
• Reliance on the network of independent Brand Partners and risks associated with compensation plan changes.
• Risks related to new product launches or reformulations.
• Hiya's ability to adapt to digital marketing environment changes, including social media advertising algorithms.
• Hiya's ability to perform in expanding distribution channels and new international markets.
• Rise Wellness' dependence on product orders from key retailers and the risk of retailers discontinuing purchases.
• Governmental regulation of products and the direct selling business model in the U.S., China, and other markets.
• Deteriorating foreign and trade relations, including tariffs and trade policies involving the U.S., China, and other markets.
• Geopolitical conflicts, including Russia-Ukraine and U.S.-Iran.
• Data privacy and security compliance, potential IT system breaches, and material failures.
• Risks associated with operations in India and future international expansion.
• Currency fluctuation risks.
• Potential resurgence of pandemics impacting consumer health and economies.
• Risks that Hiya and Rise Wellness could disrupt overall strategic plans or that management attention may be diverted.
• Challenges in retaining key personnel and realizing benefits from the Hiya acquisition, including integration costs.

Management Commentary and Tone

• CEO Kevin Guest described results as "mixed," noting meaningful improvement in some areas while others fell short of expectations.
• Management emphasized investing to strengthen long-term competitive positions.
• CFO Doug Hekking highlighted financial strength with $179 million in cash, zero debt, and reduced inventory, providing flexibility to invest in growth initiatives while maintaining discipline.
• Management stated that investments in Hiya constrain near-term results but set the stage for renewed growth.
• The tone indicates a focus on rebuilding the Core Nutritional active customer base as the top priority and largest growth lever.

Analyst Questions and Answers

• No specific analyst questions and answers are included in the provided press release text.

Other Key Points

• The company corrected a previously reported omission in the reconciliation of Adjusted EBITDA attributable to USANA for the second quarter of 2026 and the fiscal 2026 outlook.
• The correction involved adding back the full $29.1 million Hiya goodwill impairment rather than net of the $6.2 million noncontrolling interest share.
• The corrected Adjusted EBITDA for Q2 2026 is $21.7 million (previously reported as $27.8 million).
• The corrected Adjusted EBITDA outlook for fiscal 2026 is $80.5 million (previously reported as $87 million).
• The correction affected non-GAAP measures and had no effect on reported GAAP results.
• A conference call and webcast were scheduled for November 4, 2026, at 11:00 AM Eastern Time.
• USANA owns a 78.8% controlling ownership stake in Hiya Health Products and a 100% interest in Rise Wellness.