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Natural Health Trends Corp (NASDAQ:NHTC) reported a slight decrease in revenue for the first quarter of 2025, with total revenue reaching $10.7 million, marking a 2% year-over-year decline. Despite this, the company managed a modest net income of $122,000, or $0.01 per diluted share. The stock price saw a minor decline of 0.66%, closing at $4.93. According to InvestingPro data, the company maintains an impressive dividend yield of 16.23%, making it one of the highest-yielding stocks in its sector.
Key Takeaways
- Revenue decreased by 2% year-over-year to $10.7 million.
- Gross profit margin improved slightly to 73.6%.
- Active member base declined by 5% year-over-year.
- Stock price fell by 0.66% following the earnings release.
Company Performance
Natural Health Trends experienced a mixed first quarter in 2025. While revenue saw a slight decline, the company improved its gross profit margin to 73.6% from 73.4% a year ago. The active member base decreased by 5%, reflecting challenges in maintaining engagement. However, the company noted a sequential increase in orders by 9% compared to the previous quarter, indicating some positive momentum.
Financial Highlights
- Revenue: $10.7 million (2% decrease YoY)
- Net Income: $122,000 ($0.01 per diluted share)
- Gross Profit Margin: 73.6% (up from 73.4% YoY)
- Operating Loss: $345,000 (improved from $365,000 in Q1 2024)
- Active Member Base: 30,180 (5% decrease YoY)
Outlook & Guidance
Natural Health Trends has forecasted its revenue for FY2025 and FY2026 to be $42.96 million, with an EPS forecast of $0.05 for FY2026. The company is focusing on strategic initiatives such as supply chain optimization and logistics streamlining, aiming to mitigate potential tariff impacts and enhance long-term efficiency.
Executive Commentary
Chris Sharne, President, highlighted the company’s ability to increase orders by 9% quarter-over-quarter, emphasizing ongoing efforts to strengthen market presence through product innovation and expansion. CFO Scott Davidson reiterated the company’s commitment to returning capital to shareholders, underscoring the importance of shareholder value.
Risks and Challenges
- Potential tariff impacts could affect cost structures and profitability.
- Declining active member base poses a challenge to sustaining revenue growth.
- Changes in the international trade environment may disrupt supply chain operations.
- Competition in the health and wellness sector remains intense, necessitating continuous innovation.
Natural Health Trends continues to navigate a challenging market environment with a focus on strategic growth initiatives and maintaining shareholder value through consistent dividends. With a P/E ratio of 99 and market capitalization of $56.25 million, InvestingPro data shows the company maintains strong financial health metrics despite current challenges. Access the complete Pro Research Report for comprehensive analysis of NHTC’s market position and growth potential among 1,400+ top stocks.
Full transcript - Natural Health Trend (NHTC) Q1 2025:
Conference Operator: Greetings, and welcome to the Natural Health Trends Corp. First Quarter twenty twenty five Earnings Conference Call. At this time, all participants are in a listen only mode. And as a reminder, this conference is being recorded. It is now my pleasure to introduce to you Michelle Godwell with Natural Health Trends Corp.
Thank you. You may begin.
Michelle Godwell, Corporate Representative, Natural Health Trends Corp: Thank you, and welcome to Natural Health Trends First Quarter twenty twenty five Earnings Call. During today’s call, there may be statements made relating to the future results of the company that are forward looking statements as defined in the Private Securities Litigation Reform Act of 1995. Actual results, performance or achievements could differ materially from those anticipated in such forward looking statements through the results of certain factors, including those set forth in the company’s filings with the Securities and Exchange Commission. It should also be noted that today’s call will be webcast live and can be found on the Investors section of the company’s corporate website at naturalhealthtrendscorp.com. Instructions for accessing the archived version of the conference call can be found in today’s financial results press release, which was issued at approximately nine A.
M. Eastern Time. At this time, I’d like to turn the call over to Chris Sharne, President of Natural Health Trends.
Chris Sharne, President, Natural Health Trends Corp: Thank you, Michelle, and thanks to everyone for joining us this morning to discuss our first quarter twenty twenty five financial results. With me today is Scott Davidson, our Senior Vice President and Chief Financial Officer. During the first quarter, revenue was $10,700,000 a 2% decrease compared to the first quarter of twenty twenty four, attributable to the timing of our incentive calendars between the two periods. However, we managed to sequentially increase our orders taken by 9% over the fourth quarter of twenty twenty four, demonstrating sustained interest for our products. The first quarter extended our positive progress in the second half of twenty twenty four.
In China and Hong Kong, we completed a Night City Roadshow, marketing our wellness products with expert insights from Doctor. Lyle Wilson. We also introduced new additions to our Twin Slim weight management line, Twin Slim Coffee and Twin Slim Tomato Soup, both of which received strong feedback from customers and field leaders. In April, we hosted nearly 200 qualifiers on an incentive trip to Paris where they enjoy cultural and culinary experiences that strengthen team camaraderie. In March, we opened our new office in Bogota, Colombia.
This facility will serve as the central hub for our newest market delivering customer services and showcasing our brands and products. As soon as the first quarter was behind us, the international trade environment changed significantly. While the impact is difficult to gauge with the support of our product partners, we are actively working to streamline our supply chain, bring manufacturing closer to our primary markets in Asia and simplify logistics to weather the uncertainty and improve our long term efficiency. With that, I’d like to turn the call over to our CFO, Scott Davidson to discuss our financial results in greater detail. Scott?
Scott Davidson, Senior Vice President and Chief Financial Officer, Natural Health Trends Corp: Thank you, Chris. Total revenue for the first quarter was $10,700,000 a modest decrease of 2% compared to $11,000,000 in the first quarter of twenty twenty four. Our active member base decreased slightly to 30,180 at March 31 from 30,870 at December 31 and was down 5% from thirty one thousand six hundred and twenty at March. Turning to our cost and operating expenses. Gross profit margin increased slightly to 73.6% from 73.4% in the first quarter last year.
Commissions expense as a percent of total revenue for the first quarter was 41.8 percent compared with 41% a year ago, primarily due to higher weekly commissions earned by our members during the first quarter of this year. Selling, general and administrative expenses for the quarter were $3,800,000 a decrease of $156,000 compared to a year ago. As a result, operating loss for the quarter was $345,000 compared to $365,000 in the first quarter last year. Net income for the first quarter was $122,000 or $01 per diluted share compared to $188,000 or $02 per diluted share in the first quarter of twenty twenty four. Now I’ll turn to our balance sheet and cash flow.
Net cash provided by operating activities was $484,000 during the first three months of twenty twenty five compared to $549,000 during the first quarter a year ago. Total cash, cash equivalents and marketable securities were $41,900,000 at March 31, down from $43,900,000 at 12/31/2024 due to our quarterly dividend payment. As returning capital to our stockholders remains a top priority, I am pleased to announce that on April 28, our Board of Directors declared another quarterly cash dividend of $0.20 per share, which will be payable on May 23 to stockholders of record as of May 13. Looking forward, our immediate priority is assessing the potential impact of tariffs on our operations and responding swiftly with strategic actions to optimize our supply chain and streamline logistics, ensuring we continue to meet the needs of our markets, while also remaining focused on the execution of our strategic initiatives and on providing exceptional support to our members every step of the way. That completes our prepared remarks.
I will now turn the call back over to the operator.
Conference Operator: Thank you. And ladies and gentlemen, that does conclude today’s teleconference. We thank you for your participation. You may disconnect your lines at this time.
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