USANA Health Sciences Inc.
) raised its outlook for the full year during its third-quarter
report, which also saw this nutrition and personal care products
company beat earnings estimates for the seventh straight quarter.
With a year-to-date return of roughly 36.3% and a long-term
expected earnings growth rate of 18.0%, this Zacks #1 Rank (Strong
Buy) looks like a solid growth pick.
Solid Third Quarter Results
On Oct 23, USANA Health Sciences announced that third-quarter
earnings of $1.18 per share topped the Zacks Consensus Estimate by
11.3% and last year's performance by 45.7%. The year-over-year
improvement was led by higher sales, lower associate incentive
expense and a lower effective tax rate.
Revenues increased 15.1% year over year to $165.2 million, driven
by strong performances in Asia Pacific, North America and Europe.
Based on the strong third quarter results, USANA Health Sciences
raised its outlook for 2012. Net sales are now expected to reach
$645 million, up from the previous range of $630 million to $640
The company also raised its 2012 earnings guidance to between $4.35
and $4.40 per share from the previous range of $4.10 to $4.20.
USANA Health Sciences expects the strong performance to continue
due to the Lifetime Matching Bonus and other initiatives.
Earnings Estimates on the Rise
The Zacks Consensus Estimate for 2012 rose 4.5% to $4.39 per share
in the last 60 days, as all 5 estimates were revised upward. This
represents a year-over-year increase of 34.6%.
The Zacks Consensus Estimate for 2013 grew 4.8% to $4.84 per share
over the same time frame as all 5 estimates again were raised. This
reflects a year-over-year increase of 10.4%.
USANA Health Sciences is currently trading at a forward
price-to-earnings (P/E) of 9.8x, a 23.4% discount to the peer group
average of 12.8x. Its P/S ratio of 1.0 is well below its peer group
average of 3.2. Moreover, the company's return on equity (ROE) is
32.8%, above the peer group average of 29.6%.
The year-to-date return for the stock is 36.3%. Volume is quite
strong, averaging roughly 228K daily.
USANA Health Sciences is focused on the development and
manufacturing of nutritionals and personal care products. The
company, which sells its products through a global network
marketing system, operates primarily in two geographic regions:
North America/Europe and Asia Pacific. Primary product lines at
USANA Health consist of USANA Nutritionals (Essentials and
Optimizers), USANA Foods, and Sensé. Founded in 1992, the company
has a market cap of $620.1 million and competes with Mannatech Inc.
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