USANA’s Q4 Results Cap A Year of Significant Achievements


USANA Health Sciences, Inc. (NYSE:USNA) reported solid fourth quarter results with 2013 marking its 11th consecutive year of record sales.

USANA Health Sciences, Inc. (NYSE:USNA) manufactures, distributes and sells personal care products worldwide and reported a 10.5% increase in sales for the fourth quarter.

USANA Fourth quarter earnings increased by 11%

For the fourth quarter of 2013, USANA Health Sciences’ net sales increased by 10.5% to $186.3 million, against $168.5 million in the prior-year period.

Propelled by higher net sales, lower relative selling, general and administrative expense and a lower effective tax rate, the company’s net earnings for the fourth quarter jumped to $20.3 million, a 9.9% improvement, compared with the prior-year period. The effective tax rate of 29.8% for the fourth quarter was 470 basis points lower than the fourth quarter of 2012, largely due to benefits from a Utah state tax policy election change recognized in the fourth quarter of 2013.

However, these benefits were partially offset by lower gross margins and higher Associate Incentives expense, which are attributable to initiatives launched at the 2013 convention.

USANA Health Sciences, Inc. (NYSE:USNA) uses a multi-level marketing structure. The company uses a binary compensation plan, whereby the company pays its representatives based on the sales they generate, and representatives set the retail price on the company’s products they sell with the difference between the retail price and the ‘preferred price’ being what the representatives keep as pay.

Aided by higher net earnings, the company’s earnings per share for the fourth quarter increased by 11% to $1.41 compared with $1.27 reported in the fourth quarter of the prior year.

Analysts surveyed by Thomson Reuters expected a per-share profit of $1.23 on revenue of $176 million.

On the regional front, sales rose 13% in the Asia Pacific region, where the company derives a bulk of its top line, while in the Americas and Europe, the top line increased by 6.1%.

Rosy outlook for 2014

Enthused by the excellent fourth quarter results, USANA Health Sciences, Inc. (NYSE:USNA)’ chief executive officer Dave Wentz said the results marked the company’s 11th consecutive year of record sales.

For FY 2014, the company anticipates consolidated net sales to hover between $790 million and $810 million with earnings price share expected to be in the range of $5.80 to $5.95.

The company beats analysts’ estimates for 2014 as analysts expected $5.63 earnings per share and $751 million of sales for 2014.

About the Author

Mani is a Senior Financial Consultant. He has worked in Senior Management role in large banking, financial and information technology organizations. He has provided solutions for major banking and securities firms across the globe in the area of retail, corporate and investment banking. He holds MBA (Finance) and Professional Management Accounting Qualifications. His hobbies are tracking global financial developments and watching sports