Mark Luo
Long/short equity, deep value, contrarian, long-term horizon

Usana Sugarcoats Its Weak Results And Downplays A Huge Buyback Authorization

(click to enlarge)

Source: Google Finance

Outlook: Sell/Short

*Please note that all quotes come from the Q1'14 conference call unless stated otherwise.

After USANA (NYSE:USNA) released their disappointing Q1'14 results, a 15% drop was the initial reaction from the street. At first glance on a YoY basis, USANA's results looked palatable; revenues were up and so were distributors over Q1'13. However, many problems were left unanswered from China's regulatory environment to eye-brow raising EPS results. In addition, had we heard USANA comment from a QoQ perspective, growth would have looked bleaker as MLMs like USANA depend on the momentum of recruiting participants.

    Q1'14 results reveal flat distributors growth over Q4'13, the state of associate confidence and heightened regulatory...
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