In its first quarter 2022 financial report, USANA announced an 11% decrease in net sales and a 21% decrease in diluted EPS over the same quarter last year. Net sales for the quarter reached $272.9 million, while diluted EPS was $1.15. Active customer numbers were also down 11% in comparison to the first quarter of 2021 and down 1% sequentially.
“While the first quarter was a respectable start to the year for USANA, net sales were softer than anticipated, particularly around the Lunar New Year holiday in a few key Asia Pacific markets,” said Kevin Guest, Chief Executive Officer and Chairman of the Board. “That said, we made progress in executing our customer experience strategy by rolling out more Active Nutrition products in key markets and by enhancing onboarding programs and training tools.”
Asia Pacific continues to be the company’s highest performing market region, with $218.4 million in net sales for the quarter and 422,000 active customers, though it too saw a decline of 13% in net sales and 11% in active customers during the quarter when compared to the same period of 2021.
“The operating environment in Asia Pacific has become more challenging, particularly in China, where the escalation of COVID-19 has resulted in mass lockdowns, restrictions, and other disruptions,” Guest said. “As we look ahead, we are adjusting our strategy to support our teams and associates in these markets, and we remain optimistic about delivering results in the face of these challenges. We remain focused on executing our strategic initiatives, which we believe will deliver long-term, sustainable growth for all stakeholders.”
The company ended the quarter with a strong balance sheet of $238 million in cash and cash equivalents. This includes a repurchase of 288,000 shares during the quarter for a total of $25 million. The fiscal year 2022 outlook has now been revised to include a consolidated net sales between $1.1-$1.2 billion and diluted EPS between $5-$5.70.
“Despite some sales softness across a few key markets and ongoing inflationary pressures, our first quarter operating results were within the range reflected in our internal forecast,” said Doug Hekking, USANA Chief Financial Officer. “We are, however, reducing our net sales and diluted EPS outlook for fiscal 2022 due to the elevated uncertainty surrounding the COVID-19 environment in China.”