USANA Health Sciences: A High-Conviction Buy Amid Earnings Surprises and Strategic Reinvention

USANA Health Sciences (USNA) has emerged as a standout performer in the health and wellness sector, driven by a rare combination of earnings outperformance, strategic reinvention, and underappreciated growth catalysts. In Q2 2025, the company delivered a 37% earnings surprise, posting adjusted EPS of $0.74—well above the $0.54 analyst consensus—and net sales of $236 million, a 11% year-over-year increase. This performance, coupled with a strategic pivot in its direct-selling model and the explosive growth of its Hiya Health subsidiary, positions USANA as a high-conviction buy for investors seeking long-term value in a fragmented market.

Earnings Outperformance: A Validation of Resilience

USANA's Q2 results underscore its ability to adapt in a challenging macroeconomic environment. Despite a decline in active customers for its direct-selling business (418,000 vs. 468,000 in 2024), the company outperformed expectations by leveraging its Hiya Health division, which contributed $34 million in sales and maintained 200,400 active subscribers. This segment's growth—driven by its direct-to-consumer (DTC) model and personalized nutrition offerings—offset weaker performance in the core business.

The company's financial discipline further strengthens its case for investment. USANA ended Q2 with $151 million in cash, repurchased $15 million in shares, and repaid debt from the Hiya acquisition. Its adjusted EBITDA rose 13% to $30.5 million, reflecting operational efficiency and margin resilience. reveals a 14% surge in after-hours trading following the earnings report, signaling renewed investor confidence.

Strategic Reinvention: Simplification and Incentives

USANA's strategic pivot in Q2 2025 is arguably its most critical catalyst. The company has embarked on a two-year initiative to simplify its direct-selling model, rebranding participants as “Brand Partners” and overhauling compensation structures to boost retention and growth. CEO Jim Brown emphasized that these changes, including enhanced sales incentives and personalized support, are designed to create a “sustainable and scalable” direct-selling ecosystem.

The company plans to roll out these changes in August 2025 at its global convention, where further details on simplified commission structures and digital tools for Brand Partners will be unveiled. While short-term costs may rise due to promotional spending, the long-term goal is clear: to transform USANA's direct-selling model into a high-margin engine for growth. This reinvention mirrors successful strategies seen in companies like Amway and Herbalife, which have historically prioritized associate satisfaction and operational clarity.

Hiya Health: The Undervalued Engine of Growth

Hiya Health, USANA's $205 million acquisition in late 2024, is fast becoming the company's most underappreciated asset. With $37 million in Q1 2025 sales and a subscriber base of 224,000, Hiya is on track to meet its full-year target of $145–160 million in revenue—a 29% to 42% year-over-year increase. The division's personalized nutrition products, tailored to children's wellness, are a key differentiator in a market dominated by generic supplements.

Hiya's DTC model, which emphasizes subscription-based recurring revenue and data-driven personalization, is particularly compelling. By integrating Hiya's offerings into USANA's direct-selling network, the company can cross-sell to its 418,000 active Brand Partners, creating a dual revenue stream. This synergy is expected to drive margin expansion as Hiya's integration matures and economies of scale are realized.

highlights USANA's underperformance relative to the broader market, suggesting the stock is undervalued despite its strong fundamentals. At a forward P/E of 9.5x, USANA trades at a significant discount to peers like Nu Skin (NUS) and Amway (not publicly traded), offering a compelling margin of safety for long-term investors.

Investment Thesis: Balancing Risks and Rewards

While USANA faces near-term challenges—such as active customer attrition in its direct-selling segment and integration costs from Hiya—these are outweighed by its long-term growth levers. The company's strategic reinvention, coupled with Hiya's scalable DTC model and personalized nutrition innovations, creates a durable competitive advantage.

Key risks include regulatory pressures in key markets like China and potential margin compression from Hiya's lower gross margins. However, USANA's proactive approach to supply chain diversification and currency hedging mitigates these concerns. Additionally, the company's debt-free balance sheet and $34 million in remaining share repurchase authorization provide further downside protection.

Conclusion: A High-Conviction Buy

USANA Health Sciences is at an inflection point. Its Q2 outperformance, strategic pivot in direct selling, and Hiya's explosive growth position it as a rare compounder in the health and wellness space. For investors with a 3–5 year horizon, USANA offers a compelling mix of earnings upside, margin expansion, and brand-driven innovation.

While the Zacks Rank currently assigns a #3 (Hold), the company's execution of its strategic initiatives—particularly the August 2025 convention and Hiya's integration—could catalyze a multiple expansion. With a current valuation that discounts its growth potential, USANA represents a high-conviction buy for those willing to bet on its transformation into a next-generation wellness leader.

suggests that the division could become a $200 million+ business by 2026, further solidifying USANA's long-term investment appeal.