Shares of Natural Health Trends Corp. (NHTC Quick QuoteNHTC - Free Report) have risen 1.6% since the company reported its earnings for the quarter ended March 31, 2025. However, this gain lags the S&P 500 Index’s 2.3% rise over the same period. Over the past month, NHTC stock has gained 6.5%, significantly underperforming the S&P 500’s 12.3% surge.

Revenue and Earnings Snapshot

Natural Health reported revenues of $10.7 million for the first quarter of 2025, a 1.9% decline from $10.9 million in the same period last year. The dip was attributed primarily to changes in the company’s incentive and promotional calendar. Despite this, sequential order volume grew 9% from the fourth quarter of 2024, signaling healthy ongoing demand for the company’s wellness products.

Net income declined 35.1% to $122,000 from $188,000 in the prior-year quarter. Earnings per diluted share fell a penny to $0.01 from $0.02 over the same period. (Find the latest EPS estimates and surprises on Zacks Earnings Calendar.)

Operating loss narrowed to $0.3 million from $0.4 million a year earlier, while selling, general, and administrative expenses declined 3.9% year over year to $3.8 million from $3.9 million. Gross margin saw an increase to 73.6% from 73.4%, reflecting stable cost management.

Other Key Business Metrics

NHTC ended the quarter with 30,180 active members, down 4.6% year over year and down 2.2% from 30,870 at the end of December 2024. Commissions expense as a percentage of revenues edged up to 41.8% from 41%, due to increased weekly commission payouts. Cash provided by operating activities was $484,000, down from $549,000 in the prior-year quarter.

Natural Health held $41.9 million in cash, cash equivalents, and marketable securities as of March 31, 2025, compared with $43.9 million at the end of 2024. The decline primarily reflected the company's quarterly dividend payout. Maintaining its shareholder returns strategy, the company declared another quarterly cash dividend of $0.20 per share, payable on May 23 to shareholders of record as of May 13.

Management Commentary

President Chris Sharng described the first quarter as an extension of the company’s positive momentum from the second half of 2024. Sharng highlighted robust engagement from a nine-city product roadshow in China and Hong Kong, which included wellness education sessions and the launch of new Twin Slim Coffee and Tomato Soup products—both of which were well-received.

He also emphasized the strategic significance of opening a new office in Bogotá, Colombia, to serve as a regional hub for the Latin American market. The company hosted an incentive trip to Paris in April for nearly 200 qualifiers, further reinforcing its relationship-building efforts with sales leaders.

Factors Influencing the Results

Revenue softness was largely attributed to timing differences in incentive campaigns rather than weakening demand. Management pointed to a sequential uptick in order intake and reiterated ongoing field enthusiasm for the brand's wellness portfolio. However, the post-quarter onset of trade-related uncertainties has introduced new challenges. Sharng noted that the company is actively working with product partners to regionalize manufacturing closer to Asian markets, aiming to improve cost efficiency and reduce exposure to global logistics volatility.

Guidance and Strategic Outlook

While no explicit financial guidance was provided, management made it clear that navigating evolving trade barriers will be a key priority. NHTC aims to streamline its supply chain and adjust logistics to mitigate any adverse impacts, while continuing to execute on product innovation and member support.

Other Developments

During the quarter, Natural Health expanded its geographical footprint with the launch of a new regional office in Bogotá. This strategic move positions the company to better serve customers in Latin America, underscoring its commitment to long-term international expansion. No acquisitions, divestitures, or major restructuring efforts were disclosed.