USANA: Hiya Turns, Core Burns, and the Market Stops Waiting

Hiya is growing and the balance sheet is clean, but a shrinking core and another Rise cut are testing patience.

USNA · Earnings Call · 2026-11-04

USANA: Hiya Turns, Core Burns, and the Market Stops Waiting

A Mixed Quarter, and a Stock That Has Already Voted

USANA's third quarter was not a disaster, but it was not the turn management has been promising either. Total revenue fell 5% year over year to $223 million, operating income swung to -$20 million, and net income was -$28 million. Management cut adjusted EBITDA guidance to roughly $77 million from $80.5 million and now expects net sales approaching $900 million. The stock has already rendered its verdict: down 32.9% in 90 days and 38.3% below its July peak, with the long-term drawdown from the 2018 high still near 90%.

Overall, this was a mixed quarter, but one where I'm encouraged by the progress we're seeing with our strategy.
Kevin Guest, Unknown, likely Executive or Senior Management · 2026-11-04

That is the tension. Kevin Guest and his team are asking investors to look through a shrinking core to a future built on Hiya, Rise Wellness and a more diversified omnichannel model. The market is looking at the current quarter and seeing a company still paying for that transition.

Hiya Is Working — but It Is Buying Customers at Half Price

Hiya is the clearest evidence the strategy can produce growth. Management raised Hiya's net sales outlook to $130 million. Active monthly subscribers grew 18% sequentially, adding about 29,500 net subscribers, and net sales returned to year-over-year growth. Target and Amazon combined more than doubled from the second quarter, albeit from a small base. The team has also been diversifying away from a single advertising platform, building creator and affiliate programs and launching TikTok Shop. The catch is the economics. Hiya's first order is half price and comes in expensive packaging, so new customer acquisition is a deliberate near-term drag on margins. “When the customer first buys from Hiya, first order is half price. ... Hiya invests in that new customer. And we have a really high LTV and it's very predictable.” — Walter Noot, Unknown · 2026-11-04 That is a reasonable trade if retention holds. It also explains why customer acquisition is now the swing variable for the whole company. A year ago, the problem was the opposite: Meta's algorithm changes were making acquisition harder and costlier. Walter Noot described it plainly on a prior call: “Meta has changed algorithms and so we're trying to figure that out.” — Walter Noot · 2025-10-23 The current quarter suggests that particular headwind has eased. The half price model means the next two quarters should show whether the new subscribers convert into the lifetime value management keeps promising.

The Core Is Still the Problem

Core Nutrition remains the cash engine, but it is shrinking. Guidance implies roughly $740 million for the year, about $10 million below the prior outlook. The clearest pressure point is active customers, down 8% year over year. Greater China, USANA's largest market, accounted for most of the sequential decline in net sales and customers, and management cited lighter incentive and promotional activity during the quarter. The one bright spot is Southeast Asia Pacific, where net sales grew 2% year over year after declining 13% last quarter and active customers rose 3% sequentially. Management pointed to new leadership, reengagement from top brand partners and a successful incentive program. But Brent Neidig was careful not to overcall it:

I wouldn't necessarily call it a new trend line, but we're very optimistic to see those results continue to build in some of those core markets.
Brent Neidig, Chief Commercial Officer · 2026-11-04

That caution is warranted. Outside Southeast Asia, every region declined in constant currency. The bigger strategic response is a pivot toward consumer loyalty: USANA plans to adjust qualification criteria and payout timing in its brand partner incentive plan, phased through 2027, to improve retention and lifetime value. That is a subtler change than the front-end compensation overhaul of 2025, and it will take time to show up in the customer count.

Rise and the Club Channel Trap

Rise Wellness remains the most frustrating piece. Management lowered the outlook again. Last year's third quarter included a large club order for Rise Bar that did not repeat, and club orders again came in below expectations. The Club channel is inherently lumpy, with order timing that management does not control. Kevin Guest did not soften it: “we're not satisfied with Rise Wellness' results, and we're lowering our outlook again.” — Kevin Guest, Unknown, likely Executive or Senior Management · 2026-11-04 The offset is retail expansion. Protein Pop Balance launched in Target in September, and management expects about 4,100 grocery and retail stores by year-end. Protein Pop is already the #1 clear protein product in the U.S. by units and dollars per store, according to Walter Noot, but the brand is young and the base is small. The retail space carries better margins than club, which is why the mix shift matters. Still, another guidance cut in the same segment is a credibility test, not just a timing issue.

What the Balance Sheet Buys

USANA ended the quarter with $179 million in cash and no debt. Effective net cash stood at $172 million, and year-to-date free cash flow more than doubled to $36 million as inventory fell 13% from year-end. That gives management room to keep funding Hiya and Rise without dilution. The valuation already reflects the doubt. At roughly 0.4x revenue, the stock is priced as a declining direct seller rather than an omnichannel growth story. The tax rate remains an overhang too, as Doug Hekking warned on the prior call: “It's definitely going to be an elevated tax rate through the year.” — Doug Hekking, Chief Financial Officer · 2026-08-05 The current call did not offer a quick fix. Management pointed to venture-company losses, intangible amortization at Hiya and the slow work of shifting spend closer to consumers. That is another reason the earnings recovery may lag the revenue recovery. The bottom line: USANA has a genuine growth asset in Hiya and a clean balance sheet, but the core is still contracting, Rise has cut guidance again, and the loyalty pivot will not show up in the customer count for several quarters. The stock is no longer debating whether the transition is expensive; it is debating whether it works.