Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.
What: Shares of USANA Health Sciences (NYSE:USNA) were looking stronger today, gaining as much as 10% after the company beat earnings estimates in its quarterly report.
So what: The nutritional and personal-care products maker said earnings per share jumped 42% to $1.28, ahead of the analyst consensus at $1.12. Management reported a 9.7% increase in sales to $169.1 million and a decrease in associate incentive payouts -- which came from a change in the employee matching program -- helped drive the strong earnings growth. An aggressive share buyback program also helped lift per-share profits as the number of shares outstanding decreased by nearly 10% from a year ago.
Now what: Revenue actually missed analyst estimates, but the market seemed to be ignoring that as USANA also raised its EPS guidance for the year to $5.25-$5.40 from $5.10-$5.25, roughly the amount of its earnings beat this quarter. Its new EPS guidance is ahead of analyst estimates at $5.18, but the midpoint of revenue guidance, which was kept at $700 million to $720 million is slightly below the Street's view at $714 million. Considering, the bulk of today's EPS growth came from buybacks and the change in the matching program, I see little reason to change your investing thesis, or in the company's prospects. Shares seem fairly priced after today's jump.
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