10-Q · April 29, 2026
Natural Health Trends Corp. (NHTC) reported a disappointing Q1 2026, with revenue dropping to $9.2 million, down 14% year-over-year, and an EPS of -$0.02, missing expectations. Despite higher gross profit margins,…
Earnings analysis · 10-Q
NHTC earnings analysis
Filed July 29, 2026 · Our reading of the company's report
The latest report
NHTC's Q2 revenue was $7.603 million, down 23% year over year and roughly 17% sequentially, while diluted EPS was a loss of $0.05 and the operating margin deteriorated to negative 8.4% from negative 3.4% a year earlier.…
Read full summary
NHTC's Q2 revenue was $7.603 million, down 23% year over year and roughly 17% sequentially, while diluted EPS was a loss of $0.05 and the operating margin deteriorated to negative 8.4% from negative 3.4% a year earlier. A 130-basis-point gross-margin improvement to 75.2% and $323,000 of SG&A reduction did not offset the sharp Hong Kong/China-linked sales contraction. Liquidity remains adequate at $18.6 million, but it declined $10.3 million during the first half amid $2.2 million of operating cash use, share repurchases, and dividends; China regulatory and trade-policy uncertainty remain the central downside risks.
Gross and operating margin
How much of each revenue dollar the business keeps.
One point per quarterly or annual filing. Both margins are shares of that report's revenue.
From revenue to operating profit
Where each $100 of revenue went in this report.
Cost of sales, operating expenses, and what remained. Figures are rounded to whole dollars.
Where revenue came from
The business segments reported by the company.
Shares of the segments disclosed in this filing, largest first.
How we read each report
Our analysis across the last few reports.
Our model's reading of each filing, not the share price or the market's reaction. Annual and quarterly reports each occupy one position.
Reported figures
- Earnings per share
- $-0.05
What stood out
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Gross margin expanded despite sales decline
Gross margin expanded 130 basis points year over year to 75.2% from 73.9%, and improved from 75.0% in Q1 2026. Management attributed the improvement to moving product manufacturing from the United States to East Asia, closer to core markets.
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Cost actions reduced absolute SG&A
SG&A fell $323,000 year over year to $3.3 million in Q2, reflecting lower employee-related costs, professional fees, and card fees. The restructuring program is expected to produce approximately $1.5 million in annualized savings.
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Liquidity remains positive
Cash, cash equivalents and marketable securities remained $18.6 million at June 30, 2026, including $14.4 million of available-for-sale investments. The company reported a 2.0-to-1.0 current ratio and $11.8 million of working capital.
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Reported operating cash use improved YoY
First-half operating cash use was $2.2 million versus $5.2 million in the prior-year period. The prior-year figure included a $5.1 million repatriation-tax payment; excluding that payment, prior-year operating cash use was only $97,000.
What to watch
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Revenue decline drove wider operating loss
Q2 revenue fell $2.2 million, or 23%, year over year to $7.603 million and declined approximately 17% sequentially from an implied $9.206 million in Q1 (first-half revenue of $16.809 million less Q2 revenue). The operating loss widened to $643,000, or 8.4% of sales, from a 3.4% operating loss a year earlier and 5.2% in Q1.
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China-linked sales concentration and member attrition
Hong Kong generated $6.298 million, or 82.8%, of Q2 sales and declined 21% year over year. Active members fell to 26,000 at June 30, 2026 from 29,260 a year earlier; management cited China consumer sentiment, tariff uncertainty, regulatory uncertainty, and disruptive independent-member conduct.
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China regulatory scrutiny has intensified
The updated China risk factor follows the May 29, 2026 draft revision to anti-pyramid-selling rules, whose public-comment period closed June 28, 2026. Management says the proposal could increase scrutiny of online/network distribution, compliance costs, penalties, and personal liability; the Hong Kong platform generated approximately 83% of first-half revenue.
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Capital returns reduced liquidity cushion
Liquidity declined as cash, equivalents and marketable securities fell $10.3 million in the first half to $18.6 million, while working capital decreased $8.7 million to $11.8 million. Financing outflows were $7.6 million, including a $5.9 million repurchase of 2,935,227 shares and $1.7 million of dividends.
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Tariffs may pressure demand and restocking
Potential tariff exposure remains material: U.S. general tariffs on Chinese goods were described as reduced to 47% after prior rates reached 125%. Management may impose a China product surcharge and said higher duties could affect restocking in 2026.
Management's outlook
No quantitative revenue or EPS guidance was provided in the 10-Q. Management expects the 2025 restructuring actions to generate approximately $1.5 million of annualized savings, although not all savings are expected in 2026 and timing/amount may differ from expectations.
Earlier filings 4
10-K · February 20, 2026
Natural Health Trends (NHTC) described a direct-selling/e‑commerce model concentrated in Greater China and the Americas, and completed a 2025 restructuring with expected annualized cost savings of $1.5 million. Reported…
10-Q · November 5, 2025
Natural Health Trends reported Q3 net sales of $9,477,000 and GAAP diluted loss per share of $(0.04). Revenue and operating results deteriorated year-over-year (Q3 2025 vs Q3 2024) while the company maintains a strong…
10-Q · July 30, 2025
Natural Health Trends reported Q2 net sales of $9.813 million, down from $10.475 million in Q2 2024, with diluted EPS of $0.00 (Q2 2024: $0.02). Gross margin remained healthy at 73.9% but operating margin deteriorated…
This is our reading of a public filing, not the filing itself. Analysis can contain errors; check the source document for full context.