USANA Earnings Release for Q1 2014 - Analysts Must Demand USANA Disclose Number of Active Babycare Distributors in China.

USANA Health Sciences releases their first quarter 2014 earnings after the markets close today. I beleive it will be as usual, revenues up and active associate numbers up in select areas (I predict they will recruit 400,000 new associates this year alone). What USANA has refused to do for several years now is disclose the number of Babycare distributors. Babycare is a company USANA purchased that already had a direct selling license in mainland China. Multilevel Marketing (MLM) is banned in China so Babycare uses a single-level structure and no recruiting into downlines.

For several years USANA had allowed Chinese Nationals to be recruited into USANA distributor downlines in markets outside mainland China, such as Hong Kong. These illegally recruited distributors were given a phoney address and even phoney phone number. In fact, they were using the same address and USANA distributor genealogy reports show it by the thousands. This caused the Hong Kong active associate numbers to grow to levels that were suspicious: 1 in 100 in Hong Kong were USANA distributors?! Over the past several quarters now, Hong Kong active associates and revenues have declined greatly. USANA claims people from mainland China are no longer joining in Hong Kong. Yeah right...

I suspect USANA is simply fudging their numbers and the auditors have no way to check it. Since USANA allowed phoney addresses to be used thousands of times by Chinese Nationals, I would not put it passed them to simply report the number of Hong Kong USANA distributors minus those that had resided in mainland China. In other words, those from mainland China are still signed up as USANA distributors and in a downline structure, but are simply not being counted in Hong Kong anymore. Nobody can audit the genealogy structure, except the feds.I believe the revenues from Hong Kong are also simply being reported as Babycare revenue.

The main reason for my suspicion has been the fact USANA stopped reporting the number of Babycare associates. Analysts have repeatedly asked USANA to disclose the numbers of Babycare associates during several quarterly conference calls and every time USANA refused to disclose the figures.

My list of USANA disclosures are quite simple this time: DISCLOSE THE NUMBER OF BABYCARE ACTIVE ASSOCIATES.

While you're at it, disclose the number of United States associates, the number of Professional Startup Packages sold, the percent of net revenues that came from USANA associate's initial product purchase used to "activate" their first business center(s), the number of newly recruited associates, and the number of active associates that have been with USANA for more than 2 years.

(I have no stock position with USANA, never have and never will. I have no financial position whatsoever. I gain nothing from my blog. I have never been a USANA associate or an associate from any MLM company.)