USANA Health Sciences, Inc.

Reported results included a preliminary noncash goodwill impairment charge of $29 million related to HYA and $9 million of income tax expense on a pretax loss of $19 million. Kevin Guest said USANA ended the quarter with $169 million in cash, zero debt, and generated $20 million of free cash flow, driven largely by working capital management. Management did not provide revenue or EPS figures in the prepared remarks read on this call. For fiscal 26, Doug Hekking said the company is lowering full-year outlook due to the more difficult and expensive direct-to-consumer digital marketing environment affecting HYA’s second-half net sales and lower near-term net sales from Rise Wellness; he also said the revised outlook implies about $30 million to $40 million of top-line pressure and roughly $4 million to $5 million of margin pressure from the Rise issue. He added the tax rate will remain elevated through the year.

Kevin Guest framed the quarter as evidence that USANA is evolving into a “diversified omnichannel health and wellness company,” with science, consumer loyalty, and multiple channels at the center of the strategy. He highlighted stability in core nutrition, improving momentum in Mainland China, the launch of Glow, and progress in HYA’s retail and international expansion. His tone was confident and forward-looking, while still acknowledging that some parts of the portfolio are facing near-term disruptions.

Doug Hekking focused on two main financial items: the $29 million preliminary goodwill impairment charge for HYA and the $9 million income tax expense on a pretax loss of $19 million. He said the impairment reflects lower-than-expected near-term performance and updated valuation assumptions, but not a change in commitment to the business. On guidance, he said the full-year outlook is being reduced because of HYA’s DTC marketing pressure and lower near-term Rise sales, while the core nutritional business remains largely in line with expectations. He also said the tax rate will be elevated through the year because of the near-term pressure in the venture businesses and the resulting mismatch between where revenue is generated and where costs are incurred.

Analysts pressed management on the sustainability of the China uptick, the weakness in North Asia, HYA’s direct subscription business, and whether the company is reducing reliance on Meta by shifting spend to TikTok and retail. Management said China’s improvement partly reflects momentum from earlier incentives and new product activity, plus stronger local leadership, and they expect continued progress. For HYA, management said Meta’s CAC and algorithm changes hurt customer acquisition, but recent months have improved and TikTok, retail, and international expansion are now key growth levers. On Rise Wellness, management said the packaging issue was cosmetic, not a safety issue, and noted that by year-end the brand should be in over 4,000 retail doors.