The earnings report, which the company filed late Tuesday, showed that the Salt Lake City-based network marketing company brought in $267 million in the period ending on Dec. 31, 2021, while still earned slightly more than $1 a share. But it was a bumpy ride.
“As the COVID-19 pandemic has evolved over the last two-plus years, we've learned that its impact to our business is not linear. This is evident in our fourth quarter results where lockdowns and disruptions to our operating environment pressured our financial performance,” said Kevin Guest, Usana CEO, during an earnings call with analysts. A transcript of the call was posted on the site seekingalpha.com.
Sales up modestly for full year
For the full year, Usana, which markets a wide variety of dietary supplements, foods and personal care products, recorded a 5% growth in sales. Full year sales hit $1.18 billion.
China’s zero tolerance policy for COVID-19 infections has hit Usana particularly hard. The company now derives close to 80% of its overall sales within the Asia Pacific region, with China being by far the largest market. Sales in China declined 10% in the quarter and totaled $125.8 million. On a constant currency basis, the picture was slightly worse with a 13% year over year decline.
Overall Asia Pacific region sales fell by 15% during the quarter compared to the teh same period a year previously. (Usana did add a small caveat that the 2020 fiscal year fourth quarter contained an extra week in the reporting period compared to this year.)
“Fourth quarter net sales came in below our expectations as our business was negatively impacted in several key Asia Pacific markets where COVID-19 restrictions persisted throughout the quarter,” Guest added.
Usana officials said they are bracing for cost increases, as inflationary pressures start to make their way down to the commodity level. Added to that are the well-documented supply chain problems that has made forecasting difficult.
Usana’s shares took a tumble after the earnings report. The company’s share price fell from almost $95 before the announcement less than $82 afterward.