Health and wellness products company USANA Health Sciences (NYSE: USNA) missed Wall Street’s revenue expectations in Q3 2026, with sales falling 3.6% year on year to $205.9 million. The company’s full-year revenue guidance of $900 million at the midpoint came in 1% below analysts’ estimates. Its non-GAAP loss of $0.11 per share was significantly below analysts’ consensus estimates.

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StockStory’s take

USANA’s latest quarter drew a negative market reaction as the company missed both revenue and profit expectations. Management identified declining active customer counts, particularly in Greater China, and persistent softness outside Southeast Asia Pacific as key headwinds. CEO Kevin Guest described the quarter as “mixed,” noting that while operational improvements and cost controls yielded some benefit, the company is still contending with ongoing challenges in customer acquisition and retention. Guest acknowledged, “It isn’t where we want to be,” referencing the continued decline in active customers and the need to revamp core strategies.

Looking ahead, management’s revised full-year guidance is underpinned by a cautious outlook for core nutrition, a measured approach to expanding emerging brands like Hiya and Rise Wellness, and ongoing investments in customer-centric initiatives. CFO Doug Hekking emphasized that Hiya’s sequential subscriber growth and retail expansion should contribute to margin recovery, but also cautioned that gains may be uneven due to upfront marketing costs. Chief Commercial Officer Brent Neidig stated that upcoming refinements to incentive programs and the rollout of new products in 2027 are expected to drive gradual gains in customer loyalty and retention.

Key insights from management’s remarks

Management attributed the quarter’s results to mixed performance across regions and brands, with Southeast Asia Pacific showing improvement and profitability supported by cost controls, while persistent weakness in Greater China and the Rise Wellness business weighed on overall growth.

• Southeast Asia Pacific recovery: Net sales in Southeast Asia Pacific grew 2% year-over-year, reversing prior declines, driven by improved leadership engagement and a targeted incentive program. Management sees this as a template for recovery in other regions but cautions that broader trends remain soft.

• Hiya’s subscriber growth: The Hiya brand saw an 18% sequential increase in active monthly subscribers, following investment in diversified digital marketing and the launch of TikTok Shop. While net sales returned to growth, higher marketing spend pressured near-term margins.

• Greater China headwinds: The company experienced continued declines in Greater China, its largest market, with both net sales and active customers falling. Lighter promotional activity contributed to the weakness, and management underscored the need for more effective incentive programs and brand building.

• Retail expansion for new brands: Hiya and Rise Wellness expanded distribution through major retail channels, including Target and Amazon. Protein Pop Balance, a new product in the Rise portfolio, was introduced at Target, as part of efforts to reduce reliance on volatile club channel orders.

• Cost control and margin dynamics: Operational efficiencies and lower event and compensation expenses in the core nutritional segment helped offset some of the margin pressure from investments in Hiya and underperformance at Rise Wellness. Management indicated that cost discipline remains a priority as they invest in growth initiatives.

Drivers of future performance

USANA’s future performance will depend on stabilizing its core nutrition business, scaling Hiya and Rise Wellness profitably, and refining customer acquisition strategies across channels.

• Brand partner incentive adjustments: Management plans to implement phased changes to its Brand Partner incentive program, aiming to improve consumer loyalty and retention. While prior plan changes drove increased engagement, upcoming adjustments are expected to have a delayed impact, with benefits building through 2027.

• Hiya retail and digital expansion: Hiya’s growth is projected to continue as the brand expands into new retail channels and leverages digital platforms for customer acquisition. However, management noted that margin recovery will be gradual, as initial customer investments and marketing spend weigh on profitability before higher lifetime value is realized.

• Rise Wellness channel diversification: The Rise Wellness brand is diversifying away from lumpy club orders by expanding into grocery and traditional retail. Management expects that broadening the base to 4,100 retail stores and launching new products like Protein Pop Balance will contribute to steadier revenue streams and improved gross margins over time.

Catalysts in upcoming quarters

Going forward, the StockStory team will monitor (1) active customer trends and efficacy of incentive plan refinements in core nutrition, (2) Hiya’s ability to sustain subscriber growth while improving margins through retail and digital expansion, and (3) stabilization of Rise Wellness revenue as new distribution and product launches take hold. Execution on product innovation and expansion in key markets will also be critical to track.

USANA currently trades at $13.95, down from $14.87 just before the earnings. At this price, is it a buy or sell? The answer lies in our full research report (it’s free).

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