Natural Health Trends Corp. Reports 14% Decline in Q1 2026 Net Sales

Natural Health Trends Corp. reported a decline in financial performance for the first quarter of 2026, with net sales totaling $9.2 million, down 14% from $10.7 million in the same period last year. The decrease was primarily attributed to a 17% drop in sales from Hong Kong, which accounted for a significant portion of the company's revenue, largely due to negative consumer sentiment and economic uncertainty stemming from ongoing tariff issues between the U.S. and China. The company's gross profit margin improved to 75% of net sales, compared to 73.6% in the prior year, reflecting a strategic shift in product manufacturing from the U.S. to East Asia to mitigate tariff impacts.

The company's operating expenses decreased to $7.4 million from $8.3 million year-over-year, driven by lower commissions and selling, general, and administrative expenses. Despite this reduction, Natural Health Trends reported a loss from operations of $474,000, compared to a loss of $345,000 in the first quarter of 2025. The company also experienced a net loss of $154,000, or $(0.02) per share, compared to a net income of $122,000, or $0.01 per share, in the previous year.

As of March 31, 2026, Natural Health Trends had 26,400 active members, a slight decrease from 26,650 at the end of 2025 and a more significant drop from 30,180 a year earlier. The company continues to focus on its most promising markets, particularly Greater China and Southeast Asia, where it aims to enhance member recruitment and product sales. The company’s deferred revenue stood at $5 million, primarily from unshipped product orders and unredeemed product vouchers.

In terms of operational changes, Natural Health Trends has implemented a restructuring plan aimed at aligning its cost structure with current market conditions. This plan includes workforce optimization and relocating certain manufacturing activities to Asia, which is expected to yield approximately $1.5 million in annualized cost savings. The company also repurchased approximately 2.9 million shares of its common stock for $5.9 million during the quarter, as part of its ongoing stock repurchase program.

Looking ahead, Natural Health Trends remains cautious about the impact of geopolitical tensions and economic conditions on its business. The company is actively evaluating its options in response to trade policy changes and is focused on investing in its key markets to drive future growth. The board of directors has declared a quarterly cash dividend of $0.10 per share, payable on May 22, 2026, reflecting the company's commitment to returning value to shareholders despite recent financial challenges.