Yahoo Finance USANA Health Sciences, Inc. (NYSE:USNA) Q1 2024 Earnings Call Transcript
USANA Health Sciences, Inc. (NYSE:USNA) Q1 2024 Earnings Call Transcript May 1, 2024
USANA Health Sciences, Inc. isn't one of the 30 most popular stocks among hedge funds at the end of the third quarter (see the details here).
Operator: Hello and welcome to USANA Health Sciences First Quarter Earnings Call. My name is George. I'll be your coordinator for today's event. Please note, this conference is being recorded. [Operator Instructions] I'd now like to hand the call over to your host today, Andrew Masuda. Please go ahead, sir.
Andrew Masuda: Thank you, George, and good morning, everyone. We appreciate you joining us to review our first quarter 2024 results. Today's conference call is being broadcast live via webcast and can be accessed directly from our website at ir.usana.com. Shortly following the call, a replay will be available on our website. As a reminder, during the course of this conference call, management will make forward-looking statements regarding future events or the future financial performance of our company. Those statements involve risks and uncertainties that could cause our actual results to differ perhaps materially from the results projected in such forward-looking statements. Examples of these statements include those regarding our strategies and outlook for fiscal year 2024 as well as uncertainty related to the economic and operating environment around the world our operations and financial results.
We caution you that these statements should be considered in conjunction with disclosures, including specific risk factors and financial data contained in our most recent filings with the SEC. I'm joined by our President and CEO, Jim Brown; our Chief Financial Officer, Doug Hekking; our Chief Commercial Officer, Brent Neidig as well as other executives. Yesterday after market closed, we announced our first quarter results and posted our management commentary document on the company's website. We'll now hear brief remarks from Jim before opening the call for questions.
Jim Brown: Thank you, Andrew, and good morning, everyone. Solid first quarter results were driven by strength in our Mainland China market. Consolidated net sales totaled $228 million, down 5% year-over-year in constant currency, but up 2% sequentially in constant currency. We also delivered diluted EPS of $0.86 and generated $18 million of operating cash flow. Our performance in Mainland China was strong and benefited from a successful sales promotion designed to reward associates for growth in their business. This incentive helped to generate 10% year-over-year growth in local currency net sales and 15% growth in active customers. Our regional sales performance outside of Mainland China in the first quarter was softer than anticipated as we continue to battle a difficult operating environment highlighted by inflationary pressures.
To combat this, we plan to offer market-specific incentives throughout the remainder of the year to motivate our associate leaders and ultimately to help stimulate sales and customer growth. We will provide the opportunity to attend events and training as we continue to focus on supporting and actively engaging with our associates to ensure that they have the necessary products, training, resources and digital tools to be successful in growing their business. We plan to deliver a more robust product strategy. This is aligned with a more supportive of our local markets. We have already made measured progress on several of our key initiatives for 2024. I'll briefly expand upon our progress on a few of these initiatives. As part of our continued efforts to actively engage with our associates, we hosted both our China national sales meeting in Xiamen, China and our Asia Pacific Convention in Kuala Lumpur, Malaysia early in the second quarter.
Both events served as a platform to celebrate our associate success, engage with our associate leaders from around the world and to provide additional training to leaders. Attendance at both events was robust. For instance, we had approximately 17,000 attendees at our China event, a 70% increase compared to last year and approximately 80% of the people at our event in Malaysia were first-time attendees, which is an encouraging indication that there is excitement in the region. Additionally, the demographic of attendees was diverse and included an increased mix of Gen Z and millennials, a positive sign that you saw on this brand is resonating with customers across many ages. We also utilize both events to launch several new products. For instance, at our China National Sales Meeting, we introduced HealthPak into the market.
This product, which contains our patented intelligence technology, is the ultimate solution for health and convenience, and contains our premium core supplements and convenient daily AM and PM packets to support optimal health. We're extremely excited to introduce this product into our Mainland, China market. Overall, both attendees and our executive team came away from each event energized and motivated. Separately, we continue to build our India operations and we made progress on introducing the USANA brand throughout the country to help generate customer acquisition. For instance, we have attracted several strong distributor leaders to join USANA and we are optimistic that they can help us accelerate sales momentum in the existing market.
We are also committed to delivering a great customer experience and high satisfaction levels in this promising new market. Thus far, our team has done a fantastic job on these deliverables. Personally, I'm planning to visit India in early July. I'm excited to spend time with our associate leaders and the management team. I'll close by saying that I'm confident in the future of USANA. Our team is focused on executing our strategic growth initiatives throughout the remainder of the year, and believe that the successful execution of these strategies will expand our business, drive sustainable growth in net sales and earnings and create value for our stakeholders. With that, I'll now ask the operator to please open the lines for questions.
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