USNA

USANA's headline 8.3% revenue growth to $925M is a mirage: it comes entirely from a full year of the Hiya kids-vitamin acquisition (+$130M), while the core nutritional business shrank 6.9% (‑8.3% reported) to $775M. The MDA is unambiguous about why — active Customers fell 14.8%, with double-digit customer losses in nearly every major market (China ‑10.9%, US ‑14.9%, Malaysia ‑17.3%, Mexico ‑16.9%), only partly cushioned by higher spend per remaining customer. This is a secular direct-selling problem, not a one-quarter stumble: revenue has fallen from $1.13B (FY21) to $925M and net income has collapsed from $125M to $10.8M over the same span. FY2026 earnings cratered 74% (EPS $0.58 vs prior ~$2.19-equivalent) on a lower operating margin and a much higher effective tax rate, dragging ROE to 2% and net margin to 1.2%. Gross margin also slipped 280bp to 78.3% as lower-margin Hiya mixed in.

What keeps this from being a sell is the balance sheet and the price. Liabilities/equity is just 0.29x, there is $158M of cash (~40% of the $397M market cap), equity is $533M — meaning the stock at $21.51 trades below book value (~$28.8/share) and at only 0.4x sales. Management is leaning into that value: buybacks nearly tripled to $27.5M, shrinking the share count 2.4%, with $34M still authorized. The 37x P/E looks expensive but is meaningless on trough earnings; on assets and cash the stock is demonstrably cheap, and the market has already punished it brutally — USNA went from $100 to $25 (Dec 2020–2025) versus a Russell 2000 that rose to $127.