USNA - Earnings call transcript Q4 2024 | USANA Health Sciences, Inc.

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Operator

Greetings, and welcome to the USANA Health Sciences' Fourth Quarter Conference Call. [Operator Instructions] Please note this conference is being recorded.

I will now turn the conference over to your host, Andrew Masuda, Director of Investor Relations. Thank you.

begin. may You

Andrew Masuda

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

or statements the this of financial As differ a actual results regarding call, such statements. the will company. future make the results projected from events risks that forward-looking our reminder, of conference forward-looking involve and future management performance course to statements could materially in during Those perhaps uncertainties cause

We financial for recent including the that XXXX, considered related operations disclosures, Examples as should statements uncertainty with contained and results. fiscal our economic conjunction and data factors well of caution in the SEC. statements you financial and with the in risk year those these be as world, specific to include environment regarding these and operating filings around most our our outlook strategies

Operating I'm Commercial Walter joined President Jim Chief CEO, our Noot; Financial other by Officer, as our Hekking; our and Chief Chief well Neidig; Officer, Doug Brent Brown; as our Officer, executives.

market document the company's on the fourth quarter and commentary management and announced after closed, Yesterday, our results website. we our fiscal year posted XXXX

opening questions. the hear for before now from call Jim We'll brief remarks

Jim Brown

Thank I'd about USANA's future. call you, to excited Andrew, I'm good that by and morning, everyone. saying today's like open

of investment end solid business results sales the of year what tail consider direct reported I a an quarter Our just for USANA. at

focused that a income needed areas to position to USANA more from in few long-term Many opportunity XXXX and XXXX, a growth became product, historically. pivot meant to In branding USANA to attractive relevant standpoint. had our make are apparent and of we initiatives return it that we've key and

department R&D both is reorganization this And example and the commercial of the of team.

more we are year, in product and the efficiently. entirely put new teams place and they During faster working now

our sales, one also team. into We and marketing departments communications commercial reorganized comprehensive

We our is the also are market to and associates in opportunity new our best-in-class our income now simple focused faster a to differentiates marketplace. build team products superiority, make brand benefits better USANA looking the fundamental positioned highlights business. bring in products positions and on brand relevant products; of message customer income This that X to sales message simple us our are delivering to XXXX, structure with products; extra own sooner is for compelling an that innovation force: strategy differentiation better that and growth which execute centered more a or that rewarding and benefits their to

long-term positioned deliver With customer changes Asana place, sales in now these foundational is I to believe and growth. firmly

health more quarter, wellness health reach During wellness. ownership vision impact a simultaneously and our in fast-growing families, accelerating market, the we the magnifying that Hiya ability Hiya and creating XX.X% company and million. our and individuals acquisition family as the conscious children's also health to and strengthens acquired is is a positively Earth. healthiest and on expanding leader stake cash-generating, on children's fourth in focused USANA $XXX Health positions This for direct-to-consumer while of

their on that an sales and brand, is compelling continues team The over has strong the highly is subscription focused several the children's years. in sustainable to company, that position a market. Hiya and expanding management a delivering health experienced Hiya the engaged lead growth continue to and leadership team next positioned model wellness business

in late of acquisition the the Notably, very quarter. Hiya came fourth

of results XXXX business. focused Accordingly, minimal. consolidated today's was were most USANA's core to remarks on contribution the So our

sales results, Net sequentially. sequentially of quarter in fourth finished the driver activity the with quarter. our promotional key Turning XX%. result net a to fourth the year solid expectations. grew diluted a EPS and was particularly X% to that XX% grew United response Positive the adjusted increased USANA sales where now exceeded States,

Australia sales X% in year-over-year. strength in Zealand, New notable markets saw combined growing X net and these with also We

XXXX. Turning hard executing our new focus now towards work, delivering with of place. our the commercial initiatives After is and structure full XXXX, speed solidly ahead in strategy. growth customer for accelerating, through upon much collaboration our now team and We're

a planning we're product XXXX. launches cadence higher of in First, new

Officer, roll play global Scientific and as globally and Armstrong launches Chief existing role the and to development throughout she our have research, to markets. Dr. product reformulations We pivotal new We will over a both Kathryn year out product scientific leading and appointed XX planned recently in ventures.

Salt also hosting event in an convention Lake our amazing are this have and product global planned launches. City with August several We

haven't the receive about We several to business associates of products and group we're our Convention have training success, calculate Global excited for U.S. the the excited learn a so come many world we're to held to together launch. in large a their years, to new around from

in designed incentive will sales of be modernize we the our to enhancement strategic a Second, the our rolling incentives incent for and year. improve half offering growth back These to and performance. customer out associated pay enhancements are

presence, and brand brand we USANA's more launches incentives stronger, brand deliver key proposition differentiation. Third, cohesive overall and enhancing to and value be story superiority will support our magnify product reputation, and message, a

marquee August. year, markets with Salt engage associates. across trainings Fourth, around continue to than Lake more incentive ever is upcoming to with City associate and and engagement throughout We to hold it modifications Convention activities many the launches the regions the to associate product in our world. we important offerings, our in plan our our key Global a will accelerate of event With in events recognition

country, It's Before parents opening the new, we're months our since of excited plans just very the growth about been culmination I'd an call marketing strategy. additional over for strategic with subscription better-for-you effective for deal, some since attractive like to an been provide a products model closing XXXX and the have on inception Hiya. questions, success acquisition that of Hiya's resonated Hiya's across thoughts X and children and beyond. has and

discipline, have combined in with revenue and resulted team expecting XX%. business. derive Hiya growth line In in is projected an of million strong factors, with growth cash-generative the fiscal These Top fast-growing, XXXX, adjusted a remain over highly profitable Hiya with the EBITDA generated in $XXX XXXX financial margin to strong, to year-over-year.

model, on laying this launches strategic channel partnerships include growth capitalizing drive to and product Key priorities direct-to-consumer the strategic its groundwork in expansion. year for further expanding recent

working Hiya and closely with also remain deliver opportunities. results short- Overall, to both synergy identify this year. will are long-term We strong confident we Hiya the the founder-led team team that

globe be In work their to to want our closing, is I with exciting partners vision proving much to and thank XXXX USANA's filling year of commitment across Earth. us. the the an ahead associates healthiest creating on unwavering for employees, family of

questions. now the line open please for I'll ask that, to the operator with And

Operator

Instructions] [Operator first question with Anthony Sidoti Our Lebiedzinski comes & Company. from

Anthony Lebiedzinski

Certainly as sales Zealand, increased maybe see to maybe to nice some just What's to you for the start so we the promotional us out the year-over-year if could that there. Australia, that gains New point activity? driving you're color could the in U.S., seeing? the primarily additional give increases that Or you reason Is sales that?

Jim Brown

think and and can here. the I think Americas something those saw think you I'll in. my us Brent box the forward. try then chime But they give and seen some color Brent I both haven't we've ability tried. markets But of And to back really I'll going in had think think they in to insights traction. approach and where some chime creative what -- stagnant different well. as And give Europe, shows try down, outside go let I leaders I in some I respective to to and Maybe cases, let start Yes. maybe really

story And and New about think was little really I the much different, though something and and that was box, the Zealand, listening even catering thinking to the field outside bit it group. Australia their program to a same

Brent Neidig

team We're is this better and trying I regions Associate this of our in offerings local We engagement, our for our those tailored to to create combination those a locations. our our continually customers things empower this to enhancement and Anthony, an commercial really restructure others. and markets and Brent. think was and reference distributors

and the August, region, Europe for with creative convention very introduced they a incentive our Americas at that last event. that our came and launch was that regional leadership up of So offering program

from Canada, it region, ANZ, that So Mexico, touched and really we and the tremendous year. retention through of well progression the end it a August customers our associated was and U.S., received acquisition saw in of new the really by

those markets. persist control in a of first hopeful the was I that really providing great we're But throughout that taking a that, offering think continues XXXX. tailored very for And and it combination of leadership to just market part

Anthony Lebiedzinski

in That's is is something think can great you other to Or hear. you done? that said And than easier that markets? this guys replicate

Brent Neidig

during of product as that's Absolutely, -- that's need really of to something in the times terms well in or of in our this to the year. pivot that's our half the going couple Jim's our remarks, come We've as to fruition about structure. offering And call intention. talked incentive a about back

adjusted journey. last year the taking framework going August some of be journey we associates introduced convention our incentive in understand of objectives through early what them created are door, the of they and or of help at their Americas part the come that quickly to helping and the when with is that structure key was stages And that's the in they Europe that guide

will and half we something in should see that's globally that out year. of So roll that the back the

to excited us. takes we're see So where that

Anthony Lebiedzinski

Got you.

the you're us how region the should Can as then as progress you how we through for about year? right. additional regions XXXX? thinking as All color some performance And think Okay. business, sales about revenue give we about core to this different your guidance think we perform by will expected

G. Hekking

Yes.

kind a that forward think, moved of little trend seen, the I bit. kind think you've I of recent

from this we bit environment make done the is bit they've but in And of of a some the market. tough, We up there little bit see of performance challenge progress that some more last to and kind of the little think outside team hold moving and of we're equation. some China part such got think year, a But I expecting job more I the those a some areas running there, big serve, forward. in expect see fantastic ground maybe regions. where fantastic is of some a a a we'd there little

And other has the recently Brent these of the enthusiasm that think I think in provide thing I and think, some markets. I offerings, a tailored I to momentum some same get you're more articulated, in seeing more think just -- markets, the lens

forward so And to we're looking it.

Anthony Lebiedzinski

you. Got

announced that for business roughly growth Okay. December, this you initially when And XX% terms the about deal in guys Hiya, year. of in you then talked

guidance Your that. is higher than

any sales that include what's expansion? you're So just about with revenue if successful changed does Or additional And you would the channel that? also talk then? can since guidance be

G. Hekking

Yes.

the at communicated are the as what So I think the we going be think out. that, announced the stage and thoughtful we pretty models through when wanted we going go through we're to we acquisition, at and back acquisition I with evaluating and

forecast we're over within models, our which As up is I ending million XX% we their represents range we they XXXX. from and look $XXX think million communicated, which we'll the million, that to be the to $XXX did at comfortable growth XX% $XXX

so that team, they into I And pretty think it. encouraged with we're keep and leaning

narratives due we'll customer of as cost acquisition. have pockets see the that they'll customers, disruption few some profitability and where a heavier do We'll this to they those probably temporary in go experiences think year. on in with acquiring see throughout they and different months some the some individual I different

think me to great company forward with and it. this overall And your for so leadership, look remind good. question. the It's equation the of we that's second of part so exciting Anthony, part we

Andrew Masuda

Channel.

G. Hekking

Channel. little Yes, relative there there's is it's very There for de to channel. the little bit, but whole. in minimis a

Anthony Lebiedzinski

Got you.

to before give question Okay. on quick Can India you last And us a how it other. update my I on is doing? pass

Jim Brown

is This Sure, In opinion, Jim. my Anthony. really well. India doing is

been has You got to remember it that how long man, open opened? it's -- only been

G. Hekking

months. XX

Jim Brown

started we of base X. XX And from yes. Yes, months, a

be to good So it again, growth going starts runway have and just But itself we've we the market. on impactful of it's a until each that year. years few compounding seen in not building

very managed having So run was base strategic events. with They're results. plans itself is there there. being that went just we to their and the Happy have grow the and last the year country business, great plan happy a by but I how impressed and and is the leadership team small.

Operator

Your with next Christina Xue comes from question Davidson. D.A.

Song Xue

the on quarter. Congrats

fourth to follow-up quarter? you promotional the to and a the you maintain Like previous expect question. Just same the level Canada do in activity see U.S. that of

Brent Neidig

of year. that all region our anticipate first Brent. that we continued this it's that promotional markets cadence. structure Christina, promotions this year, that of somewhat the has continue last The incentive was implemented do will year a or Yes, with the in throughout we part into aggressive

adjustments for a of year. We the have made couple to program XXXX that

But offering at other promotions that will the we do leading the incentive half the And up coming new of the year. implementation continue. to anticipate forward of back

So too. as we as adopting well anticipate there markets programs, other continuing those

Song Xue

So to a quarter of year-over-year consolidated the drive that with going 'XX the for incentive is Associates' each on new program, basis? incentives for the

G. Hekking

shape line they of impact The proposition markets Yes, your a X both use affects price primary do Yes, both how of do. we and see we items on what those go offerings. mean, really -- more absolutely. time value to the bit line stuff -- incentive Others this have approach, definitely we categories. are type those Any little out. One, and back I you

Jim Brown

Yes.

have it's the magnitude just I depending something not and that think if impact, year. out. I we we'll see think in. layered mean, scenario and every they -- material call on that's there's case we an It's And the notable

sure have proper perspective you to what's you happening. So and a insight make

Song Xue

in I last to sales question. SG&A the commercial a of quarter. this I higher came than And know it's reorganization. expected team as of noticed due of kind then Okay. like the impact the percentage

this opportunities to higher? ahead for of there ratio do kind expect improvements? and like next efficiency continue trend looking to So leverage Or you year, to are

G. Hekking

Yes.

leverage there's some think there. obviously I for opportunity benefit

note press for different things is at looks you SG&A there in don't little SG&A different you ours. there a some have to have as release think what our they $X.X spin stub is incentives. few for I roughly there even than There's of in in Hiya. in in look They pattern, million saw numbers a period. you the Their have that Hiya,

layered So sales is into activity a lot line. of that their

the X, there. the see of between the the so you'll just business because USANA And business, you'll mix and Hiya between dynamic some see

meaningful being we're And the little other is still the pretty bit rates, area exchange of overhead then our centralization the we these in U.S. a impact of where touched here a up negative have

as you'll some as impact just gets we sales. so currencies And against some to moving reported well how that that from see impact translation see relative us, net

Song Xue

for mean, in part But that's of SG&A in [indiscernible]. Hiya I to be for there Yes. then going as included -- the 'XX, was well. Hiya, is

order? saying recognized onetime you are of or kind like -- So a that's that's expense

G. Hekking

we'll Hiya Well, year. I think XXX% we X for was in of the have to look be at in there for there it where days, as next

-- And quite so bit. those that changes mix a and that dynamic

of on And definitely so so more influence results from overall you'll see 'XX. you'll Hiya the see -- more an in

Operator

question Feinseth from Financial Tigress with your And next Partners. Ivan comes

Ivan Feinseth

Congratulations on wrapping year. great a up

to your has far, over some acquisition their expectations? that think time the And you could your there been So and going onto can manufacturing compared how Hiya platform integrate there? expansion you do margin be

Walter Noot

advantage well. Hiya and Walter. love They've IT is this Definitely, advantage. their the they've really Ivan, run the business team. We really great Yes, Yes, operational is well. got management, and going advantage it's

well there manufacturing. chain, to things right things considering those far all we're know really We're some that Those last with helping with do that we're as supply mile things. on now. are are as working them So them how we that

those want but are margin down will taking them got at don't a one overload time than that great we're help -- all we a But that yes, trying So us up. business it's them. mess road. they've Because to with things rather piece the to

Jim Brown

is this Ivan, Jim.

said want plans a them put team. their what but we and we it to We on little for have extremely on and the XXXX. have overwhelm strategic it, add be careful to off Just don't push bit Walter them that, on

it's be that make but slower to see to going a sure don't we of out at pace a rolled business plan. So their we disrupt lot opportunities,

G. Hekking

byproduct term And in inventory, process, just 'XX, just Yes. costs acquisition months be to written you'll really in a some of first Ivan, have also that'll for And captured I'll we transition little optics. chime see there. the there reflected short We'll the bit a some some off in then a year. have the X integration, step-up over primarily in

in affect will upcoming things P&L those their all so the And year.

Ivan Feinseth

kind been into what to what Also, then good. new Sounds And products 'XX? you expect we see strong also and also product or can out have strong? surprisingly roll categories areas do of

Jim Brown

Jim. is the our We've in conversations excitement Part had our creating model these for this Associates around of and Ivan, the world. past. is distributors

usually we and move coming So don't or at out, to that get a an really about that's stuff convention excited unless talk it's forward. event

touch specifics. really any on won't I So

upgrades about that's going to important. happen and talk throughout did really we But the and year, that's

formulate Just quicker. with and more a lot much new a working become able team efficient adjust products and R&D has to commercial

So I let out want the about specifics, getting the to cat bag. don't we're of excited that. But just

G. Hekking

say little far you the see other I kind that about, the of one bit skincare maybe a being a this. we've steps getting as is Yes. key group a as of talked start would on jump Ivan, things few on the think teams product side, I that ahead of

that little I more real will a so kind and think and be products supplements, area. you well. And nutritional you'll flagship see attention so see a our in focus that heavy And bit a as of

Operator

And Tower Doug Lane your Water comes with question next from Research.

Douglas Lane

maybe it a made coming acquisition just your out than little balance normally have your debt would a the a be. sheet little of bit. stock you bit buybacks, and are of Doug, lower you and large No cash they year, disrupted balances and

where outlook by the you see the of we'll So think sheet XXXX? year? balance what's for end do And the the

G. Hekking

at about to probably end to year. a million still that million we're $XXX cash line, in position, of sitting the ballpark. We'll really $XX $XX solid Yes. add Listen, million the in

the direction. forward. We'll great continue as we're so And think heavily a to in move I we in business moving invest

good. I so it And looks think

some how some of obviously, year-end inventory inventory see kind balance sheet, as is carrying well. Hiya in -- changes the with see their you'll with You'll

So a will the little competition bit. change

part are, probably think estimate now, in that this point. pretty to would Plans the over, we'll the I at $XX talk it's easy right be carried We have midyear to. million of as of debt. and plan kind transaction, retired

Douglas Lane

this we repurchase some put the for share year? should models And in

G. Hekking

Yes.

far the we've allocation, dilution what the take in of communicated at as as as at it's the after there, is equity conversation a generally and think we'd and -- capital standard program of I be manage that the out Outside market least to a there. with in comp go ongoing that's spent. where Board an effect

so give a sure we'll more on up as of heads make we have we visibility kind there, And that.

Douglas Lane

makes No, capital anything needs Hiya, unusual that sense. then for And there?

G. Hekking

No. have Like as I a going go additive that intentional we and back things to integrate, they've things for They go and a that we on. and do proven several team. moving said, place. so sense there's things we term think short long But some pieces I the they're still want the lot in fact back to great term. confident of are be very make collectively have

in we're prioritizing And of so still process the that.

indicated, Walter evaluating. we're process things forward as already and other moving of got on, things, in we've on, a start Some jump the

there's look you if do. at cash pretty their generative capital what don't they intensity -- they're model, So have lot to a not whole much they and

a the So and intuitive it pretty generates. business it's what relationship between

Douglas Lane

should specifically an be we for I line for a levels don't percent of capital year, at sales? And it as see assume least outlook with past, in will the spending in but this

G. Hekking

X.X%, range. in X%, Yes, that

Douglas Lane

model this seller trying these all Not brand shifting the are model. -- I the word there sort -- payout, with what's you're all of here. don't about get what but with lot product modifications, that Just making -- time any thinking model? model? bigger direct lower-priced the associate changes was people of affiliate that A in maybe affiliate doing, And to the media that going be lot going messaging. products? You sense. That got a model. into sell you're picture the going immediate social is tweaks makes 'XX. incentives, just the on you're the see But in to modifications to to affiliate Is the just read your your doing Okay. major you've behind

Jim Brown

economy away And to definitely is we're have selling have to people be the there, trying Yes, been not talk a to ways that been the money just describe and good We're to companies that and more model some our where we group. that. way channel, earn want make out have intent easy news a We it. to that there's That's coming lot model to at moved committed direct the tweaks from large appealing business. to more into attractive our all. the to about in gig there the

has term the our sales program and very incentive And term long model over just been direct years. I the think -- our

the we that's away the we're and bonuses going So want more business get just just drive the to to years. at into in stay longer some with people kept to XX.X reiterate, for enhancements from and us business But not upfront business. looking model

G. Hekking

the these I several And things are for side, the testing Yes. direction, Brent's sell in with Jim's in at different on markets years say, would now. leadership degrees various we've been that

what And so kind as understand informed we've to the of and whole. business used I that influence get and behavior from kind of in expect we'd a think

And it so think well. fairly it's we've a as approached I -- process how intentional in it's

Operator

questions closing no the there to And back management further this for remarks. time. I'll floor at hand are

Andrew Masuda

questions and on call. conference today's Thanks participation for your

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

Operator

conclude good Thank Have with All we may today's call. you. And disconnect. a parties day. that,

USANA Health Sciences (USNA) 26 Feb 252024 Q4 Earnings call transcript