USANA Health Sciences, Inc. (NYSE:USNA), a health supplements company with a market capitalization of $481 million, announced preliminary third quarter results on Thursday, with expected net sales of approximately $214 million compared to $200 million in the same period last year, while earnings from operations are anticipated to drop to $1.2 million from $15.6 million a year ago.
The health supplements company reported that third quarter operating results fell below expectations primarily due to slower-than-expected sales and Brand Partner productivity during the rollout of an enhanced compensation plan. The company also cited softer sales from its direct-to-consumer business, Hiya, which experienced lower than anticipated customer acquisition rates.
USANA expects to report a net loss of $6.5 million for the quarter, compared with net earnings of $10.6 million in the third quarter of 2024. Diluted loss per share is anticipated at $0.36, versus earnings per share of $0.56 in the year-ago period. The company’s enterprise value to EBITDA ratio stands at 4.55x, suggesting potential value opportunity despite current headwinds.
The company’s effective income tax rate for the quarter rose dramatically to 471%, compared to 43% in the same period last year. USANA explained that lower than expected earnings combined with concentrated operating expenses in the United States resulted in a significant increase in the annual effective tax rate from 45% to 65%.
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