USANA Health Sciences, Inc.
) has been enjoying positive earnings momentum following a strong
second quarter and an upbeat guidance for 2012. Shares for this
provider of nutritional and personal care products have climbed
significantly of late and are currently near the 52-week high.
Moreover, this Zacks #1 Rank (Strong Buy) has delivered positive
earnings surprises for six straight quarters with an average beat
With improving performance in the US and Asia Pacific, especially
Greater China, the stock should witness further momentum.
Impressive Second Quarter Results
On July 24, USANA Health Sciences announced that second quarter
earnings came in at $1.11 per share, or 20.7% above the Zacks
Consensus Estimate of 92 cents and 26.1% above last year's 88
cents. The year-over-year improvement was led by higher sales,
improved gross margins, share repurchases, lower Associate
incentive expense and a lower effective tax rate.
Revenues increased 8% year over year to $160.9 million, driven by
strong performances in Asia Pacific, as well as in North America
and Europe. The April 2012 introduction of the Lifetime Matching
Bonus and related promotion also helped sales growth.
Based on the strong second quarter results and business momentum,
USANA Health Sciences raised its outlook for 2012. Net sales are
now expected between $630 million and $640 million, up from the
previous range of $610 million - $625 million.
The company raised its 2012 earnings guidance to between $4.10 and
$4.20 per share from the previous range of $3.60 - $3.70. USANA
Health Sciences expects the strong performance to continue due to
the Lifetime Matching Bonus and initiatives planned for the second
half of 2012.
Earnings Momentum on the Rise
Earnings estimates moved up steadily over the last 60 days. The
Zacks Consensus Estimate for 2012 rose 14.4% to $4.20 per share,
implying year-over-year growth of 28.8%. For 2013, the Zacks
Consensus Estimate advanced 16.1% to $4.62 per share, reflecting
year-over-year growth of 10.0%.
USANA Health Sciences is currently trading at a forward
price-to-earnings (P/E) of 11.2x, a 30.4% discount to the peer
group average of 16.1x. Long-term earnings growth is expected to be
18.0%. Moreover, the company's return on equity (ROE) is 31.7%,
well above the peer group average of 21.5%. Its P/S ratio of 1.12
is well below its peer group average of 3.43.
A Look at the Chart
Shares have jumped 14.3% since announcing the solid second quarter
results. The chart below shows that the stock has been trading
above its 200-day moving average since May 8. Apart from a few
pullbacks, the stock has also been trading above its 50-day moving
average and the S&P 500 since early May.
USANA Health Sciences is currently above its 50 and 200 day moving
averages of $43.50 and $38.09, respectively. Volume is quite
strong, averaging roughly 109K daily.
Salt Lake City, Utah based 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 $678.72 million.
USANA HLTH SCI (USNA): Free Stock Analysis
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