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NATURAL HEALTH TRENDS CORP (NHTC)·Q1 2025 Earnings Summary

Executive Summary

  • Q1 2025 revenue was $10.7M, down 2% year-over-year, with diluted EPS of $0.01; sequential order intake rose 9%, highlighting underlying demand despite promotional timing differences .
  • Gross margin held strong at 73.6% (vs. 73.4% in Q1 2024), while commissions ticked up to 41.8% of revenue and SG&A fell modestly; operating loss improved slightly to $(0.345)M year-over-year .
  • Management emphasized supply chain realignment toward Asia to mitigate tariff uncertainty and shorten logistics, and declared a $0.20 quarterly dividend (payable May 23, 2025) .
  • No formal revenue or EPS guidance provided; Street consensus coverage for Q1 2025 was unavailable, limiting beat/miss analysis and likely focusing investor attention on macro/tariff risk and sequential order momentum [GetEstimates: Q1 2025 data unavailable].

What Went Well and What Went Wrong

What Went Well

  • Sequential demand improved: “we managed to sequentially increase orders taken by 9% over the fourth quarter of 2024” .
  • Margin resilience: gross margin increased slightly to 73.6% vs. 73.4% in Q1 2024, supported by cost control and SG&A reductions .
  • Strategic execution: expanded product portfolio (Twin Slim Coffee & Twin Slim Tomato Soup), nine-city wellness roadshow, and new Bogotá office opening to support Latin America scaling .

What Went Wrong

  • Top-line pressure: revenue declined 2% YoY due to promotional calendar timing; active members fell 5% YoY to 30,180, reflecting persistent demand softness in core markets .
  • Higher payout intensity: commissions expense rose to 41.8% of revenue vs. 41.0% a year ago, reflecting richer weekly commissions; net income fell to $0.122M from $0.188M .
  • Tariff uncertainty: management flagged evolving trade tensions and potential consumer sentiment headwinds as a key risk to near-term sales trajectory .

Financial Results

Core P&L and Margins (oldest → newest)

MetricQ1 2024Q4 2024Q1 2025
Revenue ($USD Millions)$10.951 $10.846 $10.737
Diluted EPS ($)$0.02 $0.02 $0.01
Operating Income (Loss) ($USD Millions)$(0.365) $(0.421) $(0.345)
Net Income ($USD Millions)$0.188 $0.176 $0.122
Gross Profit ($USD Millions)$8.039 $8.044 $7.905
Gross Margin (%)73.4% (8.039/10.951) 74.2% (8.044/10.846) 73.6%

Notes:

  • Q1 2025 gross margin cited by management; Q1 2024 and Q4 2024 margins computed from reported gross profit and net sales .

KPIs and Membership

KPIQ3 2024Q4 2024Q1 2025
Active Members (period-end)30,880 30,870 30,180
Sequential Order Intake Growth (%)——+9% vs. Q4 2024
Cash + Marketable Securities ($USD Millions)$46.3 $43.9 $41.9
Operating Cash Flow ($USD Millions)(9M) $(3.455) Q4 $0.088 Q1 $0.484

Estimates vs. Actuals (Q1 2025)

MetricConsensus (S&P Global)Actual
Revenue ($USD Millions)NA — consensus unavailable$10.737
Primary EPS ($)NA — consensus unavailable$0.01

Consensus data from S&P Global was unavailable for NHTC in Q1 2025, limiting beat/miss analysis.

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Dividend per shareQuarterly (Q2 pay date)$0.20 declared Feb 3, 2025 $0.20 declared Apr 28, 2025; payable May 23, 2025 Maintained
Revenue/EPSFY/Q2None providedNone providedMaintained (no formal guidance)
Supply Chain Strategy2025Ongoing regional optimizationAccelerating realignment to Asia to mitigate tariffs/logistics Raised strategic priority
Tax Act Liability2025$20.2M total; $15.1M paid as of Q3 2024 Fully settled in Q2 2025 (post-Q1) Completed (post-Q1 disclosure)

Earnings Call Themes & Trends

TopicPrevious Mentions (Q3 2024, Q4 2024)Current Period (Q1 2025)Trend
Tariffs/MacroWeak consumer sentiment in main market; cautious planning Heightened tariff uncertainty; active supply chain mitigation Intensifying risk, proactive response
Supply ChainCost control, inventory optimization Relocating manufacturing closer to Asia; simplify logistics Execution progressing
Product PerformanceNew launches (Skindulgence, collagen, Root Revive) Twin Slim Coffee/Tomato Soup added; strong feedback Continued innovation
Digital/TechnologyDigital enhancement project to improve CX, rollout early next year Ongoing enhancements referenced Steady development
Regional TrendsGreater China sequential and YoY strength (Q4) Nine-city roadshow in China/HK; Paris incentive trip Active field engagement
Market ExpansionColombia pre-launch and opening (Q3/Q4) New Bogotá office opened in March; LATAM hub Scaling infrastructure
Capital ReturnsQuarterly $0.20 dividend maintained $0.20 declared April 28 Stable policy

Management Commentary

  • “The 2% year-over-year revenue decrease was attributable to the timing of our incentive and promotional calendar… we managed to sequentially increase orders taken by 9% over the fourth quarter of 2024” — Chris Sharng, President .
  • “We are actively working to align manufacturing closer to our key markets, shorten supply chains, and simplify logistics to weather the uncertainty and improve our long-term efficiency” — Chris Sharng .
  • “Gross profit margin increased slightly to 73.6%… Commissions expense… 41.8%… SG&A… $3.8M, a decrease of $156,000… Operating loss… $(345,000)” — Scott (Timothy) Davidson, CFO .
  • “Total cash, cash equivalents and marketable securities were $41.9 million… quarterly cash dividend of $0.20 per share” — CFO .

Q&A Highlights

  • The call consisted of prepared remarks and concluded without a Q&A session; no additional guidance clarifications beyond prepared commentary .

Estimates Context

  • S&P Global consensus estimates for Q1 2025 revenue and EPS were unavailable for NHTC, limiting direct beat/miss analysis relative to Street expectations [GetEstimates: Q1 2025 data unavailable].
  • In absence of coverage, buyside should focus on sequential order momentum (+9%), margin stability (73.6%), and membership trends (active members −5% YoY), alongside tariff exposure and supply chain mitigation .

Key Takeaways for Investors

  • Resilient margins and lower SG&A offset a modest revenue decline; focus shifts to sustaining demand while managing payout intensity (commissions at 41.8%) .
  • Sequential order growth (+9%) suggests underlying engagement; monitor if tariff-driven sentiment dampens conversion in Q2/Q3 .
  • Active Members declined 5% YoY; watch recruitment/retention initiatives and impact of new products/roadshows on member base recovery .
  • Supply chain localization to Asia is the primary lever to mitigate tariff/logistics risk; successful execution is a near-term catalyst for margin durability .
  • Dividend continuity ($0.20) underscores strong liquidity ($41.9M cash/securities), but cash flow sensitivity to tax settlements (post-Q1) warrants attention to operating cash conversion trends .
  • With limited Street coverage, narrative and qualitative execution (events, product launches, digital upgrades, regional expansion) will drive stock reaction; traders should watch for tariff headlines and Q2 sales cadence .
  • No non-GAAP adjustments disclosed; reported metrics are GAAP. Absence of guidance increases reliance on quarterly updates and management tone.

Citations: Q1 2025 press release ; Q1 2025 8-K (Item 2.02, Exhibit 99.1) ; Q1 2025 earnings call transcript ; Q4 2024 press release ; Q3 2024 press release ; Q3 2024 call .