USANA Health Sciences (USNA) Q4 2023 earnings summary

Executive summary

• Q4 net sales were $221.1M, down 3% YoY and up 4% sequentially; diluted EPS was $0.87, up 32% YoY.

• FY2023 net sales were $921.0M, down 8% reported and 5% constant currency; diluted EPS was $3.30, down 8%. Both exceeded guidance ranges.

• Q4 results exceeded expectations, supported by a global incentive offering that drove double-digit sequential Active Customer growth in Greater China.

Financial highlights

• Q4 operating income was $24.2M vs. $22.6M YoY; net earnings were $16.8M vs. $12.8M, and diluted EPS was $0.87 vs. $0.66.

• FY operating income was $93.1M vs. $107.6M YoY; net earnings were $63.8M vs. $69.4M, and diluted EPS was $3.30 vs. $3.59.

• Q4 gross profit was $178.8M vs. $181.5M YoY; FY gross profit was $744.3M vs. $804.7M.

Outlook and guidance

• FY2024 net sales guidance is $850M–$920M and diluted EPS guidance is $2.40–$3.00.

• Guidance implies net sales performance from flat to down 7% YoY on a constant-currency basis; 2023 included ~$25M of Q1 incremental sales not expected to recur.

• FY2024 assumptions include an 8%–9% operating margin, a 38%–40% effective tax rate, and ~19.3M diluted shares.

• Unfavorable FX is expected to have a modest negative impact on FY2024 net sales; investments in India and previously acquired businesses affect the margin outlook.