USNAHIGH SIGNALFINANCIAL10-K

USNA experienced a substantial deterioration in profitability with net income declining meaningfully while expanding its business model beyond direct selling into omni-channel distribution.

The company's strategic pivot to an omni-channel platform including retail and marketplace sales appears to be pressuring margins significantly, with SG&A expenses rising 28% while revenue declined. The substantial reduction in the active customer base from 454,000 to 387,000 suggests execution challenges during this business model transition that investors should monitor closely.

Comparing 2026-03-16 vs 2025-03-12View on EDGAR →
FINANCIAL ANALYSIS

USNA's financial performance deteriorated substantially in fiscal 2025, with revenue declining 11% to $1.1B while operating income fell 44% to $37.4M as SG&A expenses surged 28%. The company's profitability took a significant hit with net income and operating cash flow both declining substantially, while inventory levels increased 47% suggesting potential demand or supply chain challenges. The overall picture indicates meaningful execution difficulties as the company transitions from a direct-selling model to a broader omni-channel approach.

FINANCIAL STATEMENT CHANGES
Net Income
P&L
-74.4%
$42.0M→$10.8M

Net income declined 74.4% — review whether driven by operations, interest costs, or non-recurring items.

Operating Cash Flow
Cash Flow
-63.4%
$61.0M→$22.3M

Operating cash flow fell 63.4% — earnings quality concerns; investigate working capital changes and non-cash items.

Inventory
Balance Sheet
+47.1%
$69.7M→$102.6M

Inventory surged 47.1% — growing faster than typical sales pace; potential demand softening or supply chain overcorrection.

Operating Income
P&L
-43.6%
$66.3M→$37.4M

Operating income deteriorated sharply — investigate whether driven by one-time charges or structural cost issues.

Capital Expenditure
Cash Flow
+37.2%
$10.1M→$13.8M

Capital expenditure jumped 37.2% — major investment cycle underway; assess returns on deployment.

Interest Expense
P&L
+36.5%
$192K→$262K

Interest expense surged 36.5% — significant debt increase or rising rates materially impacting earnings.

SG&A Expense
P&L
+28.1%
$263.3M→$337.4M

SG&A increased modestly — likely reflects growth-related hiring or sales expansion investment.

Cash & Equivalents
Balance Sheet
-12.9%
$181.8M→$158.4M

Cash decreased 12.9% — monitor burn rate and upcoming capital needs.

Revenue
P&L
-10.8%
$1.2B→$1.1B

Revenue softened 10.8% — monitor whether this is cyclical or structural.

LANGUAGE CHANGES
NEW — 2026-03-16
PRIOR — 2025-03-12
ADDED
There were 18,456,935 shares of the registrant s common stock outstanding as of March 13, 2026.
develops and manufactures high-quality nutritional supplements, functional foods and personal care products that are sold throughout the world.
In 2025, we generated $925 million in net sales and finished the year with approximately 387,000 active Customers in our core nutritional business.
Mainland China ( China ) is our largest market and single largest source of revenue, representing approximately 41.3% of net sales and approximately 49.9% of core nutritional active Customers.
In 2022, we acquired Rise and have expanded Rise's product offering, distribution channel, and customer base over the last three years.
Consequently, through our core nutritional business, Hiya and Rise, we now operate and sell products through an omni-channel platform, which includes direct selling, direct-to-consumer, third-party marketplace (i.e., Amazon), and retail channels.
Unless otherwise specified, current information reported in this Annual Report on Form 10-K for the fiscal year ended January 3, 2026 (this report or Annual Report ) is as of or for the fiscal year ended January 3, 2026.
For the year ended January 3, 2026, there were no material changes to our corporate structure or our method of conducting business.
Our Business We organize our business into two reportable segments: Core nutritional and Hiya direct-to-consumer.
Core nutritional: The customer base for our core nutritional segment is primarily comprised of two types of customers" "Brand Partners" and "Preferred Customers" referred to collectively as "active Customers." Our Brand Partners also sell our products to retail customers.
REMOVED
There were 18,904,526 shares of the registrant s common stock outstanding as of March 7, 2025.
is a global direct selling and direct-to-consumer nutrition, personal health and wellness company.
In 2024, we generated $855 million in net sales and finished the year with approximately 454,000 direct selling active Customers.
Consequently, we now operate and sell products through both direct selling and direct-to-consumer channels.
Mainland China ( China ) is our largest direct selling market and single largest source of revenue, representing approximately 48.4% of net sales and approximately 50.2% of direct selling active Customers.
Unless otherwise specified, current information reported in this Annual Report on Form 10-K for the fiscal year ended December 28, 2024 (this report or Annual Report ) is as of or for the fiscal year ended December 28, 2024.
For the year ended December 28, 2024, other than the Hiya Acquisition, there were no material changes to our corporate structure or our method of conducting business.
Our Business We organize our business into two reportable segments: Direct selling and Hiya direct-to-consumer.
Direct selling : The customer base for our direct selling segment is primarily comprised of two types of customers" "Associates" and "Preferred Customers" referred to collectively as "active Customers." Our Associates also sell our products to retail customers.
In 2023, we launched our Affiliate program in the United States, Canada, and Mexico and are evaluating introducing the program in other markets.
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