We use cookies to understand how you use our site and to improve your experience.
This includes personalizing content and advertising.
By pressing "Accept All" or closing out of this banner, you consent to the use of all cookies and similar technologies and the sharing of information they collect with third parties.
You can reject marketing cookies by pressing "Deny Optional," but we still use essential, performance, and functional cookies.
In addition, whether you "Accept All," Deny Optional," click the X or otherwise continue to use the site, you accept our Privacy Policy and Terms of Service, revised from time to time.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
NVFY Stock Gains Post Q1 Earnings With Higher Margins, Lower Loss
Read MoreHide Full Article
Shares of Nova LifeStyle, Inc. (NVFY - Free Report) have risen 13.9% since the company announced its financial results for the quarter ended March 31, 2025. This outpaced the S&P 500 Index, which rose 0.7% during the same period. Over the past month, NVFY’s stock has experienced a remarkable 76.5% gain, significantly exceeding the S&P 500’s 12.1% increase.
NVFY’s Revenue Growth and Profitability Trends
Nova LifeStyle reported net sales of $2.6 million for the first quarter of 2025, marking a 10.9% increase from $2.4 million in the prior-year period. The gain was driven by a 26% rise in the average selling price, which offset a 12% decline in sales volume. NVFY’s gross profit improved 18.5% to $1.2 million from $1 million a year earlier, with the gross margin expanding to 46% from 43%. This uptick was primarily due to a favorable shift in the product mix toward higher-margin offerings.
Despite these improvements, Nova LifeStyle recorded a net loss of $0.3 million, narrower than the $1.5 million loss reported in the same quarter last year. Loss per share shrank to $0.03 from $0.65 year over year. (Find the latest EPS estimates and surprises on Zacks Earnings Calendar.)
Nova LifeStyle’s Other Key Business Metrics
North America remained Nova LifeStyle’s dominant market, with sales to the region increasing 12.6% to $2.6 million from $2.3 million, accounting for nearly all of the quarter’s total revenues. Sales to other countries declined substantially, totaling just $17,871 compared to $50,663 a year earlier.
Operating expenses fell 44.2% year over year, reflecting improved cost control. Total operating expenses dropped to $1.4 million from $2.5 million, mainly due to a steep 41.4% reduction in selling expenses and a nearly flat general and administrative expense line. Research and development (R&D) costs, which had reached $751,216 in the prior year due to investment in AI-driven systems, were scaled back to just $390 in the first quarter of 2025.
Nova LifeStyle incurred a non-operating goodwill impairment charge of $218,606. When combined with a small amount of interest and financial expenses, total non-operating expenses amounted to $207,771. Still, NVFY’s loss from operations improved to $193,360 from a steep $1.5 million loss in the prior year.
Cash outflow from operations stood at $0.3 million, slightly worse than $0.2 million recorded in the prior-year quarter.
Nova Lifestyle, Inc Price, Consensus and EPS Surprise
Newly appointed CEO Xiaohua Lu characterized the period as an “exciting time” for the company and highlighted the positive reception of Nova LifeStyle’s high-margin product lines. He emphasized a strategic focus on product development aligned with emerging trends, with an eye toward maintaining strong gross margins amid industry uncertainty, particularly around tariffs.
Factors Influencing Nova LifeStyle’s Headline Numbers
The revenue increase was predominantly driven by North American markets, where sales benefited from the increase in the average selling price. Nova LifeStyle’s emphasis on scaling back low-margin product categories and shifting toward premium lines was central to the gross margin expansion.
On the expense side, reduced spending on R&D and selling activities helped trim losses. Shipping and advertising costs, in particular, declined significantly year over year. Advertising expense fell to $15,380 from $225,461, and shipping costs turned into a credit of $2,033 against an expense of $656 the previous year.
NVFY’s Guidance
Nova LifeStyle did not issue formal guidance for the remainder of 2025. However, management indicated a continued emphasis on new product development, enhanced margin structure and expanded customer engagement through key U.S. furniture trade fairs.
Nova LifeStyle’s Other Developments
During the quarter, Nova LifeStyle executed a series of equity transactions aimed at strengthening its capital position. The company raised $500,000 through private placements and repaid $217,000 of debt by issuing shares. It also issued 4.9 million shares to suppliers in exchange for inventory valued at approximately $3.2 million and another 434,000 shares to a creditor as part of a debt settlement agreement.
NVFY is also continuing to develop proprietary IT systems at its Malaysia-based subsidiary, although these systems are still in the early stages and are not yet operational. While the company has made material progress in restructuring its business, it still faces Nasdaq compliance challenges tied to minimum bid price and stockholders’ equity thresholds.
Nova LifeStyle disclosed that it had received a NASDAQ deficiency notice in April 2024 for failing to meet the $2.5 million minimum stockholders’ equity requirement. While it temporarily regained compliance following equity issuances and share-based transactions, it remains under scrutiny. A subsequent notification in December 2024 highlighted failure to meet the $1 minimum bid price, with a compliance deadline of June 25, 2025.
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
NVFY Stock Gains Post Q1 Earnings With Higher Margins, Lower Loss
Shares of Nova LifeStyle, Inc. (NVFY - Free Report) have risen 13.9% since the company announced its financial results for the quarter ended March 31, 2025. This outpaced the S&P 500 Index, which rose 0.7% during the same period. Over the past month, NVFY’s stock has experienced a remarkable 76.5% gain, significantly exceeding the S&P 500’s 12.1% increase.
NVFY’s Revenue Growth and Profitability Trends
Nova LifeStyle reported net sales of $2.6 million for the first quarter of 2025, marking a 10.9% increase from $2.4 million in the prior-year period. The gain was driven by a 26% rise in the average selling price, which offset a 12% decline in sales volume. NVFY’s gross profit improved 18.5% to $1.2 million from $1 million a year earlier, with the gross margin expanding to 46% from 43%. This uptick was primarily due to a favorable shift in the product mix toward higher-margin offerings.
Despite these improvements, Nova LifeStyle recorded a net loss of $0.3 million, narrower than the $1.5 million loss reported in the same quarter last year. Loss per share shrank to $0.03 from $0.65 year over year. (Find the latest EPS estimates and surprises on Zacks Earnings Calendar.)
Nova LifeStyle’s Other Key Business Metrics
North America remained Nova LifeStyle’s dominant market, with sales to the region increasing 12.6% to $2.6 million from $2.3 million, accounting for nearly all of the quarter’s total revenues. Sales to other countries declined substantially, totaling just $17,871 compared to $50,663 a year earlier.
Operating expenses fell 44.2% year over year, reflecting improved cost control. Total operating expenses dropped to $1.4 million from $2.5 million, mainly due to a steep 41.4% reduction in selling expenses and a nearly flat general and administrative expense line. Research and development (R&D) costs, which had reached $751,216 in the prior year due to investment in AI-driven systems, were scaled back to just $390 in the first quarter of 2025.
Nova LifeStyle incurred a non-operating goodwill impairment charge of $218,606. When combined with a small amount of interest and financial expenses, total non-operating expenses amounted to $207,771. Still, NVFY’s loss from operations improved to $193,360 from a steep $1.5 million loss in the prior year.
Cash outflow from operations stood at $0.3 million, slightly worse than $0.2 million recorded in the prior-year quarter.
Nova Lifestyle, Inc Price, Consensus and EPS Surprise
Nova Lifestyle, Inc price-consensus-eps-surprise-chart | Nova Lifestyle, Inc Quote
NVFY’s Management Commentary
Newly appointed CEO Xiaohua Lu characterized the period as an “exciting time” for the company and highlighted the positive reception of Nova LifeStyle’s high-margin product lines. He emphasized a strategic focus on product development aligned with emerging trends, with an eye toward maintaining strong gross margins amid industry uncertainty, particularly around tariffs.
Factors Influencing Nova LifeStyle’s Headline Numbers
The revenue increase was predominantly driven by North American markets, where sales benefited from the increase in the average selling price. Nova LifeStyle’s emphasis on scaling back low-margin product categories and shifting toward premium lines was central to the gross margin expansion.
On the expense side, reduced spending on R&D and selling activities helped trim losses. Shipping and advertising costs, in particular, declined significantly year over year. Advertising expense fell to $15,380 from $225,461, and shipping costs turned into a credit of $2,033 against an expense of $656 the previous year.
NVFY’s Guidance
Nova LifeStyle did not issue formal guidance for the remainder of 2025. However, management indicated a continued emphasis on new product development, enhanced margin structure and expanded customer engagement through key U.S. furniture trade fairs.
Nova LifeStyle’s Other Developments
During the quarter, Nova LifeStyle executed a series of equity transactions aimed at strengthening its capital position. The company raised $500,000 through private placements and repaid $217,000 of debt by issuing shares. It also issued 4.9 million shares to suppliers in exchange for inventory valued at approximately $3.2 million and another 434,000 shares to a creditor as part of a debt settlement agreement.
NVFY is also continuing to develop proprietary IT systems at its Malaysia-based subsidiary, although these systems are still in the early stages and are not yet operational. While the company has made material progress in restructuring its business, it still faces Nasdaq compliance challenges tied to minimum bid price and stockholders’ equity thresholds.
Nova LifeStyle disclosed that it had received a NASDAQ deficiency notice in April 2024 for failing to meet the $2.5 million minimum stockholders’ equity requirement. While it temporarily regained compliance following equity issuances and share-based transactions, it remains under scrutiny. A subsequent notification in December 2024 highlighted failure to meet the $1 minimum bid price, with a compliance deadline of June 25, 2025.