Ongoing pandemic issues in China hit Usana hard
Usana, a multi-level marketing company based in Salt Lake City, UT, is one of the largest MLMs in the world focused primarily on nutrition products. The company sells a wide variety of dietary supplements, functional foods and personal care items.
For several years, China has been the company’s biggest market. It now represents more than 50% of overall turnover. Asian markets as a whole now represent more than 80% of global turnover.
Sales fell in all markets
The company’s overall fiscal 2022 revenue fell from $336.8 million in the second quarter of 2021 to $264.5 million in the second quarter of this year, representing a decline of 22%.
Sales in China fell nearly 15% year-over-year, but fell even more sharply in Southeast Asia-Pacific (down 37%) and North Asia (down 37%). 23%). Sales in America and Europe fell 18.7%.
“We continue to experience COVID-related disruptions in several key markets, including mainland China. This has resulted in lower participation in sales programs, fewer active customers and weaker than expected financial performance,”said Kevin Guest, CEO and Chairman of the Board of Usana. “Although many of these disruptions were beyond our control. . . our second quarter results were not up to our standards.
New M&A activity?
Guest said the company has several plans to buck the sales trend, including improving the company’s digital sales platforms and its training for new active distributors, which are the backbone of any network marketing company. The guest also stated that Usana would be looking for “accretive business development opportunities”,Which seems to indicate that it will be in the market for acquisitions or new partnerships, something the company hasn’t been involved in recently.
Forecast down, share price crashes
The company’s stock price is down nearly 50% from its all-time high, which was recorded in 2019. Since then, the price per share has fallen from nearly $130 per share to less than $68 today. The highest price for 2022 was $102.94, recorded on January 3.
The company expects net sales for the full year to be between $1.02 billion and $1.07 billion. By comparison, Usana grossed $1.19 billion in 2021 and $1.35 billion in 2020.