Natural Health Trends Corp. Reports Decline in Q2 2025 Financial Performance

Natural Health Trends Corp. reported a decline in financial performance for the second quarter of 2025, with net sales of $9.8 million, down 6% from $10.5 million in the same period last year. For the first half of 2025, total net sales reached $20.6 million, a decrease of 4% compared to $21.4 million in the first half of 2024. The company's gross profit margin slightly decreased to 73.9% for the second quarter, down from 74.2% a year earlier. The company recorded a net income of $15,000 for the second quarter, a significant drop from $173,000 in the same quarter of 2024, while the net income for the first half of 2025 was $137,000, down from $361,000 in the prior year.

The decline in revenue was attributed primarily to negative consumer sentiment and economic uncertainty, particularly in Hong Kong, which accounts for a substantial portion of the company's sales to members in China. The company noted that heightened economic conditions, including the threat of reciprocal tariffs between the U.S. and China, have adversely affected sales. The number of active members also decreased to 29,260 as of June 30, 2025, down from 30,870 at the end of 2024 and 31,110 a year earlier.

In terms of operational developments, Natural Health Trends Corp. has been focusing on its most promising markets, particularly Greater China and Southeast Asia. The company has relocated its corporate headquarters from Hong Kong to California in February 2025, a strategic move aimed at mitigating risks associated with the changing political and economic landscape in Hong Kong. The company continues to evaluate its compliance with applicable laws and regulations, particularly in China, where it operates an e-commerce platform.

Financially, the company reported total current assets of $40.9 million as of June 30, 2025, down from $51.0 million at the end of 2024. Current liabilities also decreased to $14.9 million from $20.8 million, resulting in a current ratio of 2.7 to 1.0. The company experienced negative operating cash flows of $5.2 million for the first half of 2025, compared to $3.0 million in the same period of 2024. Despite these challenges, the company declared a quarterly cash dividend of $0.20 per share, consistent with previous periods, indicating a commitment to returning value to shareholders.

Looking ahead, Natural Health Trends Corp. plans to continue investing in its key markets and is actively evaluating options to mitigate the impact of trade policy changes. The company remains cautious about the potential effects of ongoing geopolitical tensions and economic conditions on its operations and financial performance. The management expressed uncertainty regarding future sales growth, particularly in China, where the company is considering reapplying for a direct selling license when conditions are favorable.