USNA - Earnings call transcript Q2 2021 | USANA Health Sciences, Inc.

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Operator

Good day, and welcome to the USANA Health Sciences Second Quarter Conference Call. Today's conference is being recorded. At this time, I would like to turn the conference over to Mr. Patrique Richards, Executive Director of Investor Relations and Business Development. Please go ahead sir.

Patrique Richards

morning. Good joining our you quarter to us appreciate second review results. We live call our and is conference via website being ir.usana.com. from Today's directly broadcast webcast accessed can at be our a be the replay following call, available Shortly on website. will

conjunction factors the Officer, the Financial our such you filings morning for Yesterday as considered the Guest; As perhaps include the be second a as including the for now and We'll uncertainty closed, We from before I'm this management forward-looking to joined of well Doug as performance projecting remarks of Kevin after commentary our CEO in that these or make regarding by those posted pandemic in questions. Jim President, business, could our contained other opening Kevin disclosures, data statements this results to quarter will COVID-XX and our duration our of call events risk statements and these most the actual statements. we course materially executives. our Examples results. announced the our financial and website. fiscal statements company's to SEC. Hekking; Chairman with caution market future specific Board, with results of should statements future operations management Brown; Chief cause recent on conference our document hear brief the and uncertainties our strategies involve regarding risks the financial impact magnitude, call, related well outlook forward-looking scope the during reminder, and XXXX, of the from of financial year differ company. results as Those that and

Kevin Guest

by to to of sales our good with record we program we appreciate that last propelled morning, year-over-year be report program a double-digit customers growth offered USANA. -- short-lived. you, review net surprisingly and sales growth pleased We're everyone. offered this quarter us of regions. in see We which Thank excellent Much also earnings We short-term sales, year expect active to contributed to embrace quarter of our sales Pat, and for program results another was third joining pleased force you again sales and this was were this year. that the meaningful successful not very quarter similar during we not our during the meaningfully to a each

of results half we run Although, will sales that the believe we of in back program not several initiatives customers. we have in year, this half the the the which curate to of contribute to another magnitude planned we other back year, expect will

and per experience yesterday, engagement and doing As business long-term with growth the noted and our outlook centered sales remain in on strategy. our that remains have of XXXX customer earnings USANA. and net growth confident earnings customers our in share reiterated strategy release our we This overall they for enhancing when

to In closing, With USANA. and year of I'll the performance with we ask we believe that, questions. half in now well-positioned record for deliver including are strategic we international As strategy we acquisitions. opportunities business and development focus markets, investments expansion growth this and launching and lines, opportunities, capitalizing technology, opportunities lines our the first pleased another open existing in to driving the are operator our the products will new for on improving continue pursuing product on year to execute please

Operator

Lane, comes Research. Lane you. Instructions] first Our from Thank Doug [Operator question

Doug Lane

morning, Yes. Hi. everybody. Good

week sharp is really on the why implies quarter start-off year a expected a outlook, sales if quarter dichotomy the just Just here? about deceleration your the which with could back in strong no want adjusting to to sharp half of you year. second growth for the mid-XXs over wondered year talking XX% single-digits in We're I to change deceleration the year. such of and mid even full last elaborate the between this going from such rest a extra

Doug Hekking

was what primary the last We here. referring short-term that's see is what QX was in this it quarter. back an Doug with kind really learn it really Doug, nature was have and to catalyst. there last go opportunity and customers. you're of engage other them and sales really sales and we We does program the talked the the lift to The that some as Yes. that's to the program in It it year. but end QX from new acquire process about just to of and primary the at catalyst

Doug Lane

QX year. in sales dropped fourth program count off customer I in after the noticed last year, your last the quarter

customers into the these in levels? going the here? this quarter are looking customers we second are somewhat reduction third And quarter your fluid from a So, fourth year and for

Doug Hekking

Many of through could and Yes year of the those some purchase it's at what would customers, this last into type I things see hopefully little place this least put but engaging a out I and But not paradigm one to pattern of sometimes be similar year. repeat. expect social you would saw proactive that more last expect thing. of a means progress reaching in saw come bit a additional and yes, customers some similar year. and we a on We same you to what to year

Doug Lane

to in seeing mentioned if you guys now in Okay. world. you just I the your business on update impact could and your COVID wanted I various geographies That's from an your around how helpful. get COVID-XX And comments then you're

Jim Brown

reality about. maybe general, in to like look not in seeing of We've different even a by just because in And that the up different a and Doug make again that at work up is we as at higher we're convention have We we a area job our the maintaining Nanjing sure pivot we we've along. environment of inventory lockdowns or but great orders general that back orders you're than just that done is a Jim. going $XX little in about looking COVID operating limited measure the September. China is and a fact different having December we're COVID-XX a types challenging gone that environment When million. just but little would as inventory the we we bit We and departments that probably rates as chain. is talking to talked the in same good we've just done COVID. before general. plan and Yes, lockdown, sit to Pacific markets bit been try in at chain operations COVID decision But company move great have go supply to are where back supply Asia really job has have Supply a made planned. another we had this our environment the in having that's to about a this have look and And at a market-to-market back

Doug Lane

I here. same? an just Is of the it can it chains to to if where characterize I P&L or would understand more Jim, you mean most? demand impacts see the and supply about impact versus it how the in margins impact So is the

Doug Hekking

Doug Yes. is this Doug again.

is a good the So one. question

exposure are of of COVID really in worst dealing markets I into the job some done -- environment really that prolonged with. our seen some markets kind key a environment. in a group's We've leaning the they've think their shape some you've have we're historically demanding if really of prolonged seen a good been

those I -- level had of lean that things high the markets. real just their toll. activities those year, some of at back some take into think of and did half support there just like COVID we those the we We'll of So when

seeing to starting whispers year. is probably we're We're side. definitely of pressure hear And the Additionally, of on labor deal inflationary and on not great going what mean that's that some the material a to costs. indications this overall

gross see we've leaning and a do doubt do disruption business cost of I The been little of in bit at our it. least some back team that. you pressure work in managed pressure and we'll margin to there. But historically mean to fantastic and a on that see has into You'll markets each see continue go you some well probably without

Jim Brown

Yes.

to It's logistics get weeks water Asia taking example another of four the good a the across is to Just Pacific. to just it. six side products

and in increase that into too So goods more can changed market trying and run push to we've they some and finished into the of But we're so will our ERP end, react system their gone accordingly. inventory. the the parameters businesses

Kevin Guest

shipping and term air we've make Yes markets have ample stuff been the to they the in sure to short supply.

Doug Lane

Doug capital year? Okay. your you That just have be And this do an makes sense. what lastly expenditures on update will expected

Doug Hekking

low at back point this year. guess pretty had been definitely far of we've for my the the year-to-date. I plans the We so Yes half -- best

capital say range plan back win year the million for for about this my guess as I of chain thing. time. at and somewhere talk some of been between receive I million think the that the that would be supply due issue stuff $XX delayed and best would part go this $XX But to we to a has the lot of we

Doug Lane

Okay, great. Thanks guys.

Doug Hekking

Thanks Doug.

Operator

comes question from Jefferies. Stephanie Wissink, next Our

Stephanie Wissink

you. day if Thank we everyone. Good could. Two questions

some just your shopping share a you The first give more -- time native wanted China. bit to to in about is little a app

is the how the deployment China wondering you demand? in digital led Just versus the seeing tool come numbers much just by recovery strongly of underlying that back think pretty

Kevin Guest

Yes to let the with. that. Noot respond that in We'll Walter we have him who oversees room

Walter Noot

take our got main they're it's reasons We've growth probably lot had of -- very initial But So China app downloads. been approach our the We've by software usage. been it. shopping development. a China. about we've -- we a accepted to very lot excited It's of -- our is of China not MVP one for in our it's an market,

going a phase to more up of function, reorder in first auto allows our other was add the We're next going months. on to few and tools people and to add the it product schedule. set order which So, shopping. notifications We're continue to kind

it's say, a there's And a But It's for a more of that's so, us. that. with play would for long-term kind us. play just lot a short-term not I strategy coming

Doug Hekking

say feedback than to also to maybe the them had shopping the Yes, Walter have a what from indication on initial very in It's more the the Stephanie market we've is I customers past. far in what experience would the little said, positive. been add bit familiar

there's, So, grow what from Right I it catalyst growth. experience. a on that fits shopping and more more building pushing room a consumers we'll future revenue functionality Kevin think I that and and satisfaction progress, be our we're could think there's experience, now, customer layering keep but with into about in and keep And lot there. making talked the to additional to things keep that

Kevin Guest

shopping more Chinese shopping. We'll native. web other and that There's more shopping Yes. things experience with coming add for are China more

Stephanie Wissink

the And that that thought word native. used interesting was Yes. you I

consumer something engagement that the that has deployed is something this So, this is world there platform or for the around justify is designed find a if you China be that is in to that China, it? could

Kevin Guest

It's different different. The experience. is non-Chinese shopping than shopping experience Chinese

Just user the is way works their experience different.

So we've applications. designed these

being which quarter, but It's of that to markets. this we changing done are It's over deployed being it's and done done But, very them, our people and in shop. the a China. this for for start Chinese we've we're it's quarter around learning native. It's work It's All we adding of China. experience and next the going localized their experiences way that, being X.X done to the some going being all are more shopping out. last different years, world, for -- just coming from quarter of is next the

Stephanie Wissink

strongly. out jump of I great. comments active nutrition, to the your because that coming over to suggest That's want pretty it's gate just

wanted that's So, board? your to your relative you're is is or And the new ask this coming cohort it two preferred would for that different cohort seeing question unique is or business? customers, similar business you to core that associates of questions. that a in to drive core or on business cohort of One the see same associates similar

Doug Hekking

Kevin my Yes. after on thoughts on you I'll let Jim it. Stephanie or here give add I

introduction kind of consuming think part, lean the supplements the health folks have of is kind same management out see products, folks, the of the the there. and a it's see its you who maybe of some to you it's that adoption kind more far, on roll we way Maybe can to been year. most for with more nutrition of our and digestive so Jim and but towards an was continue energy; in I our but that activity rollout. plans touch lean weight unique a pretty introduce are product throughout do there's hydration a who category, some and what of That the of limited

Jim Brown

really rolling into in that's out have line. when we've markets, out. the quarter, to then right in And then, have this XXXX we products America the and plans will start out is Yes, to rolled third the go working mostly on limited North at a time. we're now point to And of going second second we phase enhance quarter all this

there's products, PCs. our this even associates coming strategy to more the can more a support the as very sticky to different out line. introduction of a continue get It's be be each in -- going at So, rolling in we're long-term it very more out, a to it offerings is markets bars great product. so We as line for look to

You roadmap experience with of stay Nutrition make Active we hopefully and to then get come with the get then an with is signing kind and that you people our it, to them the have. nutritional will decision that on

Kevin Guest

is Stephanie, And this Kevin.

offering through a appealing product we've year our to base where and like other the advantages you plant a speak and had is from that perspective, manufacturing about competitive outside things what strategically also strategy call manufacturing we're and seeing as nutrition. USANA product we strategically looking calls comments, that to active other digital pill of areas lines. new skills. products vitamins And but in that expanding nutritional proceed by so all moving creating the and just talked from we're according mentioned from We're a the in past and we our according forward plan it's product this One lifestyle North accumulating to that we're planned is of about think to my I perspective, plan. notion

more it of to that a lead things desire will release the having in and as to a more being globally. a approach that health other ready people to concern, future of into becomes company USANA need we're a overall and for getting consumers holistic relates see more lifestyle health and more You'll as a

is forward. perspective more move Nutrition product in to our you a can contributing products move as lifestyle and Active strategic and to USANA a lines step So first look from we

Stephanie Wissink

you much. very Thank helpful. Very

Operator

Ivan Feinseth, Partners. next comes Our from question Tigress Financial

Ivan Feinseth

on Thank you and have launch that on and morning. positively line. results the And areas you question, surprised great for launch and you the in maybe congratulations of see where in the taking disappointed? congratulations line? quarter -- my Good of new Nutrition do another Active What the opportunities

Kevin Guest

Yeah.

some initially the the XX products issues do very general. we supply were at areas think from the which the well. accepted it's three of again I on beginning, down was just of of us, field expecting beaten in of we But But kind surprised been weeks pivot few I promising. had guess, even a had was we is times slowed on We the to launch line the with forecasting that our chain some some what we did had really and to for it it. that two

seeing it into metabolism went a we're it just and is markets product Nutrition those of other and product, One for just about really excited getting and well really do XXXX. what the into could Active

Ivan Feinseth

kind to what in that? And apps do that? follow engagement you out what other Nutrition see your have on Active app, coming And of seen then you

Kevin Guest

the Yeah. out gone people -- I survey kind the well. filling filling in think think mean, and stuff coming and pretty I it's online I of

far site -- As they the people are taking who as and those actually fall who questions hitting in follow as started. the through

encouraged So there. in response early but it's by I really the think least at the initial still game,

Ivan Feinseth

they associates from as far of? are to clients kind for, getting then what what more you want feedback And see like, what their they're looking of what they as

Kevin Guest

Yeah. Jim Well, ahead. go

Jim Brown

one comes and well just having releasing be the looking at this is and to it at areas of lot we're more in bar future. bar bars another couple works a potentially options getting when feedback next with We're us the our think that get. I we and it year USANA end feedback into Yeah, of a North early that going we of and of flavors type a more year. the to have line That's

before of we'll of powdered really manufacture work Of different where our feedback having bars flavors North really our course types we drinks pivot and these customers solve We order other really tied have in level when a to different and an dealing the hands USANA and things internally our quantities don't a because let as is But satisfy Ivan well. other going few with we manufacturing issues. are minimum about you it some bringing by third-party at taste your that wanting needs and you're to opportunity with that. get of

Ivan Feinseth

Are And develop Brands, what then you launching on there? for you the your from bar be or seeing subject your them Built helping to going you acquisition own some happening your investment -- bars brand? co-branded in like are

Doug Hekking

that's that into with XXXX food Built Brands, that the pilot to done into end intent co-branded by be bars bar ourselves. process were a new really speed of R&D we're of Yeah, we is was really But products speed real Built the us the And the quicker year than and bars. what at potentially down flavors we're ago move in it the over help with a building if more Bar collaboration to when or launches already collaboration but next got just year expertise driven the bar doing up Built we're not ourselves. that launch started. and next it talked R&D the bar up there'll a us to I Long-term we much have And just that a when doing minute we've into into and lab; bars probably similar out investment really process get about that bar. Built helped with the it's was allowing to going of batches a we formulate the

Ivan Feinseth

question. my taking for thanks and again, congratulation good, Very

Doug Hekking

Thanks Ivan.

Operator

at have we the no And in further time. queue this questions

Patrique Richards

for call. conference for questions today's and all in your you your Thank participation

at any Investor feel have questions, to free Relations remaining please you contact XXX-XXX-XXXX. If

Operator

today's and ladies This teleconference. concludes you, gentlemen. Thank

disconnect. now may You

USANA Health Sciences (USNA) 28 Jul 212021 Q2 Earnings call transcript