USANA HEALTH SCIENCES INC
For the period ended Jul 4, 2026. Filed Aug 13, 2026.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Jul 4, 2026 · Filed Aug 13, 2026
USNA$13.63-1.7%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2026-04-04; filed 2026-05-12.
0000896264-26-000034
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2026-07-04; filed 2026-08-13.
0000896264-26-000056
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 81 previous paragraphs and 111 current paragraphs.
60 unchanged; 16 reworded; 30 added; 5 removed; 0 previous and 5 current paragraphs rearranged.
Tables are not compared: 9 previous and 12 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (30)
Current report
Asia Pacific: Net sales declined 3.7%, or 6.8% on a constant currency basis during the current-year quarter. Active Customers in this region declined 8.6% year-over-year. The net sales decline in this region reflects a continued challenging environment to attract new customers.
Current report
Consolidated gross profit decreased 40 basis points to 78.3% of net sales, down from 78.7% in the prior-year quarter. Gross profit margin in the Core Nutritional business declined 70 basis points from the prior year to 81.1% of segment net sales, reflecting lower production levels, partially offset by changes in currency and market sales mix. Hiya gross margins increased 410 basis points from the prior year to 67.9% of segment net sales, largely reflecting savings in shipping costs, favorable sales mix, and an acquisition related inventory basis step-up in the last year's second quarter. Rise gross margins of 10.8% primarily reflected a change in sales mix with the growth of Protein Pop.
Current report
Brand Partner incentives increased 50 basis points to 37.4% of consolidated net sales, up from 36.9% in the prior year quarter. The increase in relative Brand Partner incentives can be attributed to the sales mix between our Core Nutritional business and Hiya and Rise, because Hiya and Rise do not pay Brand Partner incentives. For the Core Nutritional business, Brand Partner incentives were flat year-over-year at 43.6% of segment net sales.
Current report
Selling, general and administrative expenses increased slightly by $0.4 million in absolute terms during the current-year quarter, or 220 basis points relative to net sales. Selling, general and administrative expense for the Core Nutritional business decreased 70 basis points from the prior year to 30.8% of segment net sales. The decrease is primarily attributable to lower employee compensation associated with the cost realignment initiatives that took place in the fourth quarter of 2025. Hiya, which operates with higher relative selling, general and administrative expense compared to the Core Nutritional business, experienced a notable increase in relative expense that can primarily be attributed to higher advertising and marketing costs. Although small in absolute terms, Rise invested higher relative costs to continue building its retail opportunity.
Current report
Goodwill Impairment
Current report
Due to current lower-than-expected performance and changes in the near-term forecast in the Hiya reporting unit, the Company took additional steps to perform an interim goodwill impairment test. As a result of this analysis, the Company recorded a non-cash goodwill impairment charge of $29.1 million during second quarter of 2026.
Current report
This non-cash charge primarily reflects the current performance and changes in near-term forecasts, as well as updated valuation assumptions under applicable accounting standards, including adjustments to market multiples and discount rates. The impairment does not reflect a change in management’s commitment to the business. The Company remains confident in the future of Hiya and recognizes the strategic importance as part of our consolidated long-term growth strategy as Hiya leverages their brand across additional channels and international markets. There was no comparable goodwill impairment charge in the three months ended June 28, 2025.
Current report
Income tax expense totaled $9.1 million during the second quarter of 2026 on losses before income taxes of $18.9 million. The disproportionate income tax expense reported for the quarter was driven by changes in current performance and the near-term forecasts for our Hiya and Rise segments, the non-cash goodwill impairment charge, and the updating of the annualized effective income tax rate due to lower consolidated earnings projections and China's increased relative share of taxable income. As a result, the Company recorded income tax expense in a period of pretax loss compared to an effective tax rate of 44.5% for the prior-year quarter (see Note L to the condensed consolidated financial statements).
Current report
Diluted (Loss) Earnings per Share Attributable to USANA
Current report
Net Sales
Current report
Core Nutritional Net Sales
Current report
Americas and Europe: Net sales declined 5.7%, or 8.3% on a constant currency basis during the current-year period, primarily due to a decline in active Customers of 7.2%. Year-over-year results in this region reflect a continued challenging environment to attract new customers.
Current report
Hiya Net Sales
Current report
Net sales in the Hiya segment for the six-month period ended July 4, 2026 were $60.4 million, down 14.9% when compared to the corresponding period of 2025. The decrease was driven by a continued challenging digital marketing environment, which created pressure in both net sales and subscriber growth.
Current report
Rise Net Sales
Current report
Net sales in the Rise segment for the six-month period ended July 4, 2026 were $17.1 million, up $13.0, or 321.1%, when compared to the corresponding period of 2025. The increase was primarily the result of Protein Pop sales through large national retailers and club retailers not present in the prior-year period.
Current report
Gross Profit
Current report
Gross profit decreased 170 basis points to 77.2% of net sales, down from 78.9% for the six months ended June 28, 2025. Gross profit margin in the Core Nutritional business declined 40 basis points from the prior year to 81.6% of segment net sales, reflecting lower production levels, partially offset by changes in currency and market sales mix. Hiya gross margins increased 570 basis points from the prior year to 68.5% of segment net sales, largely reflecting savings in shipping costs, favorable sales mix, and an acquisition related inventory basis step-up in the prior year. Rise gross margins of 7.8% primarily reflected a change in sales mix with the growth of Protein Pop.
Current report
Brand Partner Incentives
Current report
Brand Partner incentives decreased 10 basis points to 36.4% of consolidated net sales, down from 36.5% in the prior-year period. The decrease in relative Brand Partner incentives can be attributed to the sale mix between our Core Nutritional business and Hiya and Rise, because Hiya and Rise do not pay Brand Partner incentives. Brand Partner incentives for the Core segment were up 40 basis points to 43.5% of segment net sales. This increase can be primarily attributed to an unfavorable change in market sales mix, and an increase in incentive promotions.
Current report
Selling, General and Administrative Expenses
Current report
Selling, general and administrative expenses decreased $2.8 million in absolute terms during the current-year period, but increased 20 basis points from a relative perspective. Selling, general and administrative expense for the Core Nutritional business decreased 120 basis points to 30.3% of segment net sales. The decrease is primarily attributable to lower employee compensation associated with the cost realignment initiatives that took place in the fourth quarter of 2025. Hiya, which operates with higher relative selling, general and administrative expense compared to the Core Nutritional business, experienced a notable increase in relative expense that can primarily be attributed to higher advertising and marketing costs. Although small in absolute terms, Rise invested higher relative costs to continue building its retail opportunity.
Current report
Goodwill Impairment
Current report
Due to current lower-than-expected performance and changes in the near-term forecast in the Hiya reporting unit, the Company took additional steps to perform an interim goodwill impairment test. As a result of this analysis, the Company recorded a non-cash goodwill impairment charge of $29.1 million during second quarter of 2026.
Current report
This non-cash charge primarily reflects the current performance and changes in near-term forecasts, as well as updated valuation assumptions under applicable accounting standards, including adjustments to market multiples and discount rates. The impairment does not reflect a change in management’s commitment to the business. The Company remains confident in the future of Hiya and recognizes the strategic importance as part of our consolidated long-term growth strategy as Hiya leverages their brand across additional channels and international markets. There was no comparable goodwill impairment charge in the six months ended June 28, 2025.
Current report
Income Taxes
Current report
Income tax expense totaled $17.6 million during six-month period ended July 4, 2026 on losses before income taxes of $3.4 million. The disproportionate income tax expense reported for the quarter was driven by changes in current performance and the near-term forecasts for our Hiya and Rise segments, the non-cash goodwill impairment charge, and the updating of the annualized effective income tax rate due to lower consolidated earnings projections and China's increased relative share of taxable income. As a result, the Company recorded income tax expense in a period of pretax loss for the year-to-date period compared to an effective tax rate of 44.5% for the prior-year period (see Note L to the condensed consolidated financial statements).
Current report
Diluted (Loss) Earnings per Share Attributable to USANA
Current report
Diluted (loss) earnings per share attributable to USANA decreased to $(0.75) during the six months ended July 4, 2026 as compared to $1.01 reported in the prior year primarily as a result of lower earnings from operations, higher income taxes, and the non-cash charge for goodwill impairment.
Current report
During the six months ended July 4, 2026, our China subsidiary remitted profits through an annual dividend of$62.3 million to the United States, net of a loss from a dividend hedge and applicable taxes.
Removed paragraphs (5)
Previous report
Consolidated gross profit decreased 280 basis points to 76.2% of net sales, down from 79.0% in the prior-year quarter. The decrease in gross profit is largely attributed to an approximate 370 basis point unfavorable impact on consolidated results from incremental net sales for Rise, which carry lower gross margins relative to the Core Nutritional segment. Gross margins were also down for the Core Nutritional segment by 100 basis points due to production inefficiencies driven by lower production levels, as well as an increase in material costs. The overall decrease was partially offset by a positive contribution to the consolidated gross margin of 190 basis points from our Hiya segment, resulting primarily from a favorable shift in sales mix, and higher costs in the prior-year quarter related to the recognition of a step-up in basis of acquired inventory.
Previous report
Brand Partner incentives expense is incurred only in the Core Nutritional segment. Brand Partner incentives on a consolidated basis decreased 70 basis points to 35.4% of consolidated net sales, down from 36.1% in the prior-year quarter. This decrease can be attributed to the increase in net sales within our Rise segment where no Brand Partner incentives are incurred. For our Core Nutritional segment, Brand Partner incentives increased 70 basis points to 43.4% of segment net sales, up from 42.7% in the prior-year quarter. The relative increase was primarily driven by an unfavorable shift in market mix to a higher payout, an increase in incentive promotions, partially offset by lower accruals for incentive trips and events, and benefits from price increases.
Previous report
Selling, general and administrative expenses decreased $3.2 million in absolute terms during the current-year quarter, or 130 basis points relative to net sales. The overall decrease reflects an approximate 165 basis point favorable impact on consolidated results from the Core Nutritional segment attributed to cost realignment strategies implemented in the fourth quarter of fiscal year 2025, which were primarily related to employee costs and facility lease expense. Rise impacted consolidated selling, general and administrative favorably by 115 basis points as a result of leverage gained on higher net sales. However, Hiya negatively impacted consolidated selling, general and administrative expenses by 150 basis points due to higher spending on lower sales.
Previous report
The year-to-date effective tax rate increased to 55.0% from the 44.5% reported in the comparable period of fiscal 2025. The higher effective tax rate is due to lower consolidated earnings projections and an unfavorable change in mix of taxable income by market. Earnings before income taxes for the current-year quarter totaled$15.5 million with income tax expense of$8.5 million, or 55% of pretax income.
Previous report
Diluted Earnings per Share Attributable to USANA
Reworded paragraphs (16)
Previous wording
Core Nutritional: Core Nutritional is our primary business with approximately 82% of consolidated net sales during the three months ended April 4, 2026. Our Core Nutritional customer base is primarily comprised of two types of customers: “Brand Partners” and “Preferred Customers,” referred to together as “active Customers.” Our Brand Partners also sell our products to retail customers. Brand Partners share in our company vision by acting as independent distributors of our products in addition to purchasing our products for their personal use. In 2023, we launched our Affiliate program in the United States, Canada, and Mexico, which offers another sales and compensation opportunity to individuals who are interested in selling USANA products. Affiliates are discussed and reported in the report as part of our Brand Partners. Preferred Customers purchase our products strictly for personal use and are not permitted to resell or to distribute the products. We only count as active Customers those Brand Partners and Preferred Customers who have purchased from us at any time during the most recent three-month period. As of April 4, 2026, we had approximately 404,000 active Customers worldwide in the Core Nutritional segment.
Current wording
Core Nutritional: Core Nutritional is our primary business with approximately 84% of consolidated net sales during the six months ended July 4, 2026. Our Core Nutritional customer base is primarily comprised of two types of customers: “Brand Partners” and “Preferred Customers,” referred to together as “active Customers.” Our Brand Partners also sell our products to retail customers. Brand Partners share in our company vision by acting as independent distributors of our products in addition to purchasing our products for their personal use. In 2023, we launched our Affiliate program in the United States, Canada, and Mexico, which offers another sales and compensation opportunity to individuals who are interested in selling USANA products. Affiliates are discussed and reported in the report as part of our Brand Partners. Preferred Customers purchase our products strictly for personal use and are not permitted to resell or to distribute the products. We only count as active Customers those Brand Partners and Preferred Customers who have purchased from us at any time during the most recent three-month period. As of July 4, 2026, we had approximately 384,000 active Customers worldwide in the Core Nutritional business.
Previous wording
We have Core Nutritional operations in multiple markets, with sales and expenses being generated and incurred in multiple currencies. Our reported U.S. dollar sales and earnings can be significantly affected by fluctuations in currency exchange rates. In general, our operating results are affected positively by a weakening of the U.S. dollar and negatively by a strengthening of the U.S. dollar. During the three months ended April 4, 2026, net sales outside of the United States represented 91.3% of Core Nutritional net sales. In our net sales discussions that follow, we approximate the impact of currency fluctuations on net sales by translating current year sales at the average exchange rates in effect during the comparable periods of the prior year.
Current wording
We have Core Nutritional operations in multiple markets, with sales and expenses being generated and incurred in multiple currencies. Our reported U.S. dollar sales and earnings can be significantly affected by fluctuations in currency exchange rates. In general, our operating results are affected positively by a weakening of the U.S. dollar and negatively by a strengthening of the U.S. dollar. During the six months ended July 4, 2026, net sales outside of the United States represented 91.1% of Core Nutritional net sales. In our net sales discussions that follow, we approximate the impact of currency fluctuations on net sales by translating current year sales at the average exchange rates in effect during the comparable periods of the prior year.
Previous wording
The following table summarizes the approximate percentage of total product revenue for the Core Nutritional segment that has been contributed by major product lines and our top-selling products for the current and prior-year periods, as indicated:
Current wording
The following table summarizes the approximate percentage of total product revenue for the Core Nutritional business that has been contributed by major product lines and our top-selling products for the current and prior-year periods, as indicated:
Previous wording
Sales to Brand Partners accounted for approximately 50% of Core Nutritional segment sales during the three months ended April 4, 2026, with the remainder of our sales generated from Preferred Customers. As of April 4, 2026, Brand Partners and Preferred Customers represented approximately 41% and 59%, respectively, of the total active Customer base for the quarter in the Core Nutritional segment. The table below summarizes the changes in our active Customer base for the Core Nutritional segment by geographic region, rounded to the nearest thousand as of the dates indicated:
Current wording
Sales to Brand Partners accounted for approximately 51% of Core Nutritional business sales during the six months ended July 4, 2026, with the remainder of our sales generated from Preferred Customers. As of July 4, 2026, Brand Partners and Preferred Customers represented approximately 43% and 57%, respectively, of the total active Customer base for the quarter in the Core Nutritional business. The table below summarizes the changes in our active Customer base for the Core Nutritional business by geographic region, rounded to the nearest thousand as of the dates indicated:
Previous wording
Hiya's active Monthly Subscribers are comprised of two types: first-time customers and recurring customers. First-time customers are viewed as an investment as the customer is provided a discount, and shipping costs are higher due to the inclusion of a refillable glass bottle. Additionally, as a direct-to-consumer company, customer acquisition is heavily influenced by the level of marketing spend. Recurring customers are not provided the same discount, and shipping costs are lower on refill orders. Both gross margins as well as operating margins improve with recurring customer orders, therefore, profitability margins are affected by sales mix between these two types of customers. As of April 4, 2026 and March 29, 2025, Hiya had approximately 186,000 and 224,000 active Monthly Subscribers, respectively.
Current wording
Hiya's active Monthly Subscribers are comprised of two types: first-time customers and recurring customers. First-time customers are viewed as an investment as the customer is provided a discount, and shipping costs are higher due to the inclusion of a refillable glass bottle. Additionally, as a direct-to-consumer company, customer acquisition is heavily influenced by the level of marketing spend. Recurring customers are not provided the same discount, and shipping costs are lower on refill orders. Both gross margins as well as operating margins improve with recurring customer orders, therefore, profitability margins are affected by sales mix between these two types of customers. As of July 4, 2026 and June 28, 2025, Hiya had approximately 166,000 and 200,400 active Monthly Subscribers, respectively.
Previous wording
Net sales for the first quarter of 2026 increased 0.3% to $250.2 million, an increase of $0.7 million, compared with the prior-year quarter. The modest increase in sales is the result of incremental net sales of $12.0 million for Rise, partially offset by a decline in both the Core Nutritional and Hiya segments of $6.4 million and $4.9 million, respectively. Additionally, favorable changes in currency exchange rates positively impacted net sales by an estimated $8.1 million in the current-year quarter.
Current wording
Net sales for the second quarter of 2026 decreased 5.3% to $223.3 million, a decrease of $12.6 million, compared with the prior-year quarter. The decrease in sales is primarily the result of a decline in both the Core Nutritional and Hiya segments of $7.9 million and $5.7 million, respectively, partially offset by a $1.0 million increase in net sales for Rise. Additionally, favorable changes in currency exchange rates positively impacted Core Nutritional net sales by an estimated $5.6 million in the current-year quarter.
Previous wording
Net earnings attributable to USANA for the first quarter of 2026 were $7.5 million, a decrease of 20.1% compared with $9.4 million during the prior-year quarter. The change is primarily attributable to a lower operating margin and a higher effective tax rate in the current-year quarter.
Current wording
Net loss attributable to USANA for the second quarter of 2026 was $21.4 million, a decrease compared with net earnings of $9.7 million during the prior-year quarter. The change is primarily attributable to lower net sales, operating margins, a higher effective tax rate, and a goodwill impairment for our Hiya segment in the current-year quarter.
Previous wording
Americas and Europe: Net sales declined 6.3%, or 9.9% on a constant currency basis, in this region during the current-year quarter. Active Customers in this region declined 8.2% year-over-year and average spend per active Customer decreased 1.1% year-over-year. Year-over-year results in this region reflect a continued challenging environment to attract new customers.
Current wording
Americas and Europe: Net sales declined 5.0%, or 6.7% on a constant currency basis during the current-year quarter. Active Customers in this region declined 6.1% year-over-year, partially offset by a slight increase in average spend per active Customer. Year-over-year results in this region reflect a continued challenging environment to attract new customers.
Previous wording
Net sales in the Hiya segment for the three-month period ended April 4, 2026 were $32.2 million, down 13.3% when compared to the corresponding period of 2025. The decrease was primarily the result of a lower customer base and a decrease in customer acquisitions.
Current wording
Net sales in the Hiya segment for the three-month period ended July 4, 2026 were $28.3 million, down 16.7% when compared to the corresponding period of 2025. The decrease was driven by a challenging digital marketing environment, which created pressure in both net sales and subscriber growth.
Previous wording
Net sales in the Rise segment for the three-month period ended April 4, 2026 were $13.7 million, up 740.7% when compared to the corresponding period of 2025. The increase was primarily the result of the launch of Protein Pop in large national retailers and club retailers.
Current wording
Net sales in the Rise segment for the three-month period ended July 4, 2026 were $3.4 million, up 40.3% when compared to the corresponding period of 2025. The increase was primarily the result of sales of Protein Pop through large national retailers and club retailers not present in the prior-year period.
Previous wording
Diluted earnings per share attributable to USANA decreased to $0.41 as compared to $0.49 reported in the prior-year quarter primarily as a result of the substantially higher income tax provision as well as lower earnings from operations in the current-year quarter.
Current wording
Diluted (loss) earnings per share attributable to USANA decreased to $(1.16) during the second quarter of 2026 as compared to $0.52 reported in the prior-year quarter primarily as a result of lower earnings from operations, higher income taxes, and the non-cash charge for goodwill impairment.
Previous wording
Net sales in the Core Nutritional segment for the three-month period ended April 4, 2026 were $204.4 million, down 3.0% when compared to the corresponding period of 2025. On a constant currency basis, net sales in the Core Nutritional segment declined 6.9%. The decrease in Core Nutritional net sales was mainly due to a 12.0% decrease in active Customers, partially offset by a 5.6% increase in average spend per active Customer.
Current wording
Net sales in the Core Nutritional business for the six-month period ended July 4, 2026 were $396.0 million, down 3.5% when compared to the corresponding period of 2025. On a constant currency basis, net sales in the Core Nutritional business declined 6.8%. The decrease in Core Nutritional net sales was mainly due to a 10.1% decrease in active Customers, partially offset by an increase in average spend per active Customer of 2.9%.
Previous wording
Asia Pacific: Net sales declined 2.3%, or 6.2% on a constant currency basis, in this region during the current-year quarter. Active Customers in this region declined 12.8% year-over-year, partially offset by an increase in average spend per active Customer. The net sales decline reflects a challenging economic and operating environment.
Current wording
Asia Pacific: Net sales declined 3.0%, or 6.5% on a constant currency basis during the current-year period. Active Customers declined 10.8% year-over-year, partially offset by 3.5% higher average spend per customer. The net sales decline in this region reflects a continued challenging environment to attract new customers.
Previous wording
Cash and cash equivalents incre ased to $162.8 million as of April 4, 2026, from $158.4 million as of January 3, 2026. Cash flow provided by operating activities was$9.8 million, offset by cash used in financing activities of $3.6 million, and cash used in investing activities of $2.6 million. Additionally, favorable changes in currency exchange rates have impacted cash and cash equivalents, and restricted cash by $0.9 million.
Current wording
Cash and cash equivalents incre ased to $168.6 million as of July 4, 2026, from $158.4 million as of January 3, 2026. Cash flow provided by operating activities was$33.1 million, offset by cash used in financing activities of $17.7 million, and cash used in investing activities of $6.7 million. Additionally, favorable changes in currency exchange rates have impacted cash and cash equivalents, and restricted cash by $1.5 million.
Previous wording
Net cash flow provided by operating activities was$9.8 million for the first three months of 2026. Net earnings combined with adjustments of non-cash items and a decrease in inventory purchases contributed positively to our net cash flow provided by operating activities, partially offset by an increase in trade accounts receivable, reflecting higher sales to retail customers in the Rise segment, as well as cash used to pay the 2025 annual employee bonus and accrued Brand Partner incentives.
Current wording
Net cash flow provided by operating activities was$33.1 million for the firstsix months of 2026. Net earnings combined with adjustments of non-cash items and a decrease in inventory purchases contributed positively to our net cash flow provided by operating activities, partially offset by cash used to pay the 2025 annual employee bonus and accrued Brand Partner incentives.
Previous wording
Net cash flow provided by operating activities was $15.5 million for the first three months of 2025. Net earnings combined with adjustments of non-cash items contributed positively to our net cash flow provided by operating activities, partially offset by cash used to pay the 2024 annual employee bonus and accrued Brand Partner incentives and the purchase of inventories.
Current wording
Net cash flow provided by operating activities was $27.7 million for the first six months of 2025. Net earnings combined with adjustments of non-cash items and an increase in accounts payable contributed positively to our net cash flow provided by operating activities, partially offset by cash used to pay the 2024 annual employee bonus, accrued Brand Partner incentives, and the purchase of inventories.
Rearranged current paragraphs (5)
Current report — wording carried from elsewhere
Net sales in the Core Nutritional business for the three-month period ended July 4, 2026 were $191.6 million, down 4.0% when compared to the corresponding period of 2025. On a constant currency basis, net sales in the Core Nutritional business declined 6.8%. The decrease in Core Nutritional net sales was mainly due to the decrease in active Customers.
Current report — wording carried from elsewhere
Six months ended July 4, 2026 and June 28, 2025
Current report — wording carried from elsewhere
The following table summarizes the changes in net sales by segment for the six months ended as of the dates indicated:
Current report — wording carried from elsewhere
The following table summarizes changes in local currency net sales, active Customer counts, and average spend per active Customer for the markets primarily contributing to the decline in net sales within the Asia Pacific region:
Current report — wording carried from elsewhere
The following table summarizes changes in local currency net sales, active Customer counts, and average spend per active Customer for the markets primarily contributing to the decline in net sales within the Americas and Europe region: