USANA Health Sciences (USNA) misled shareholders in their first quarter earnings on May 5, 2015 by cherry picking those markets with an increase in sales while neglecting to report any information on markets that decreased such as Hong Kong. For example, USANA stated “Net sales in Greater China increased 43.0% year-over-year due to growth in Mainland China. Specifically, local currency sales in Mainland China increased 121% year-over year” What USANA didn't tell you in their earnings release was the fact that Hong Kong sales declined by about $15 million or 63%!
USANA only compared year-over-year results. However, USANA is NOT a seasonal stock. If we look at the earnings result quarter-over-quarter, here is what it would look like: Net Sales in Greater China decreased 2.6% quarter-over-quarter due to a declining market in Hong Kong. Specifically, sales in Hong Kong declined $10.2 million or 54.5% quarter-over-quarter. This was slightly offset by growth in mainland China where sales increased by $7.5 million or 9.8% quarter-over-quarter.
In case you missed it - Hong Kong's decrease outweighs mainland China's increase quarter-over-quarter.
Putting this into perspective and why Hong Kong's numbers are significant:
Q1 2015 Hong Kong sales estimated around $8,529,000
Q1 2013 Hong Kong sales were $41,597,000