USANA Health Sciences Inc. (USNA—NYSE) reported financial results for its fiscal second quarter 2014 after the markets closed on Tuesday. While missing earnings estimates by 14 cents at $1.36 per share (according to Briefing.com the Capital IQ Consensus Estimate was $1.50), the company reaffirmed net sales and earnings guidance for 2014.
For the second quarter ended June 28, 2014, net sales decreased to $188.3 million, down 0.4 percent compared with $189.1 million in the prior-year period. Net sales, on a comparative basis, were negatively impacted by: $7.0 million of incremental sales in the second quarter of 2013 that occurred ahead of policy changes, which included restricting Associate purchases to their country of residence; $3.3 million from unfavorable changes in currency exchange rates; and price discounts that the company implemented in 2013. The number of active Associates for the second quarter increased 11.4 percent year-over-year, and 6.8 percent sequentially, largely as a result of the initiatives implemented by the company in 2013.
Net earnings for the second quarter were $19.3 million, compared with $24.2 million during the prior-year period. Earnings per share for the quarter were $1.36, compared with $1.72 in the second quarter of the prior year. Weighted average diluted shares outstanding were 14.2 million in the second quarter of 2014, compared with 14.1 million in the prior-year period.
During the quarter, the company accelerated its share repurchase activity by repurchasing approximately 682,000 shares under its authorized repurchase program for a total investment of $49.1 million. Additionally, as of July 25, 2014, the company has spent $21.4 million during the month of July to repurchase approximately 285,000 shares.
“USANA generated solid results during the second quarter, notwithstanding several factors that created a challenging year-over-year comparable,” said Dave Wentz, USANA’s CEO. “As we execute our 2014 strategies, we are confident that our performance will continue to accelerate during the second half of the year and we will deliver another year of record results in 2014.”
The company reaffirmed guidance for fiscal year 2014 with earnings per share between $5.50 and $5.65 (versus $5.66 Capital IQ Consensus Estimate) and consolidated net sales between $770 million and $790 million (versus $784.99 Capital IQ Consensus Estimate).