USANA HEALTH SCIENCES INC Q4 FY2024 earnings call

• 2024 was an investment year with pivots like reorganizing R&D and commercial team. New product teams and commercial team reorganization were implemented. - In 2025, plans include a higher cadence of new product launches (over 20 product launches/reformulations globally), appointed Dr. Katherine Armstrong as Chief Scientific Officer, hosting global convention in Salt Lake City in August, rolling out strategic enhancement to associate incentive offering in the back half of the year, enhancing brand message/story/value proposition, and continuing to accelerate associate engagement activities.

For USANA's direct sales business, net sales grew 7% sequentially in the fourth quarter, and adjusted diluted EPS increased 14%. Positive response to promotional activity was a key driver, with net sales in the United States growing 16% sequentially and combined net sales in Australia and New Zealand growing 9% year over year. Hyatt had $112 million in revenue in fiscal 2024 with an adjusted EBITDA margin over 20%, and 2025 guidance is $145 million to $160 million, representing growth from 29% to 42% over the 2024 revenue.

• USANA's direct sales had net sales growth of 7% sequentially in Q4. - Hyatt 2025 guidance is $145 million to $160 million, representing growth from 29% to 42% over 2024's $112 million revenue. - 2025 plans include product launches, convention, incentive enhancements, brand message improvement, and associate engagement activities.

• Forward-looking statements involve risks and uncertainties that could cause actual results to differ materially from projections. - Hyatt may experience temporary disruption and profitability due to the cost of acquiring customers in a few pockets throughout 2025.

Q: What's driving the sales increases in the US, Australia, and New Zealand?

A: Jim and Brent mention the commercial team restructure, associate engagement enhancement, leaders in respective markets thinking outside the box and creating tailored offerings.

Q: Regarding Hyatt, what's changed since the December announcement and does guidance include channel expansion?

A: Doug Hekking says Hyatt's forecast and models show they'll be within the communicated range of $145 million to $160 million, and channel expansion is de minimis.

Q: How is India doing?

A: Jim and Brent state India is doing well but has a small base as it's only been open thirteen months.

Q: Expectations for SG&A as a percentage of sales moving forward?

A: Doug Hekking says there's opportunity for leverage benefit, noting mix with Hyatt's SG&A and exchange rate impacts.

Q: How has the Hyatt acquisition been going and plans for integration?

A: Walter Noot says integration is going well but done at a slow pace to not disrupt Hyatt's 2025 plans. Doug Hekking mentions short-term integration costs and inventory write-offs.

Q: Outlook for balance sheet, share repurchase, and capital spending?

A: Doug Hekking says cash balance is solid, plans to retire Hyatt's $23 million debt midyear, share repurchase is an ongoing conversation, and capital spending is expected to be around 1.5% of sales.