Natural Health Stock Gains Post Q4 Earnings, Gross Margin Slips

Shares of Natural Health Trends Corp. NHTC have gained 2.1% since the company reported its earnings for the quarter ended Dec. 31, 2025. This compares to the S&P 500 Index’s 0.2% decline over the same time frame. Over the past month, the stock gained 8.5% against the S&P 500’s 0.9% decline.

Natural Health’s Earnings Snapshot

For the fourth quarter of 2025, revenue declined 10.1% year over year to $9.7 million from $10.8 million, though sales rose 3% sequentially from the third quarter. Operating loss widened to $0.6 million from $0.4 million in the prior-year period. NHTC reported a net loss of $0.6 million, or $0.05 per diluted share, against net income of $0.2 million, or $0.02 per diluted share, in the fourth quarter of 2024.

For the full year, revenue decreased 7.4% to $39.8 million from $42.9 million in 2024, while operating loss expanded to $1.8 million from $1.3 million. Net loss for 2025 was $0.9 million, or $0.08 per diluted share, against net income of $0.6 million, or $0.05 per diluted share in 2024.

Natural Health did not provide detailed revenue breakdowns by segment in its release, but management cited sequential growth in Greater China and improving trends in markets such as Taiwan and Peru.

NHTC’s Other Key Business Metrics

Gross profit for the quarter was $7.1 million, down 11.7% from $8 million a year ago, reflecting lower sales volume. Gross margin was 73.9%, slightly below 74.2% in the prior-year period, primarily due to inventory write-offs tied to discontinued products and production transitions. Excluding these write-offs, the margin would have been comparable year over year.

Commissions expense declined 13.7% to $3.9 million from $4.5 million in the fourth quarter of 2024, and as a percentage of net sales improved to 40.3% from 41.9%, indicating tighter cost control within the compensation structure. Selling, general and administrative (SG&A) expenses declined 2.6% year over year to $3.8 million from $3.9 million, though they included $208,000 in restructuring-related charges.

Active Members, defined as those placing at least one order in the preceding 12 months, declined 13.7% year over year to 26,650 as of Dec. 31, 2025, from 30,870 a year earlier, underscoring ongoing challenges in distributor engagement.

On the balance sheet, total cash, cash equivalents and marketable securities stood at $28.9 million at year-end, down from $32 million as of Sept. 30, 2025. For the full year, net cash used in operating activities was $5.9 million compared with $3.4 million in 2024. The company paid $9.2 million in dividends during 2025.

Natural Health Trends Corp. Price, Consensus and EPS Surprise

Natural Health Trends Corp. price-consensus-eps-surprise-chart | Natural Health Trends Corp. Quote

Natural Health’s Management Commentary

President Chris Sharng characterized fourth-quarter 2025 results as showing early signs of stabilization despite a difficult macroeconomic backdrop. Sharng highlighted a 3% sequential revenue increase and noted that reorders as a percentage of total orders improved versus 2024, while curated product bundle sales rose 10% for the full year. Management also pointed to encouraging growth in Taiwan and Peru during the quarter, with Japan and Colombia posting strong increases throughout the year.

Sharng emphasized that 2026 marks the company’s 25th anniversary, with plans for a major celebration event in Hong Kong expected to draw 1,500 attendees and the launch of signature products tied to the milestone.

Factors Influencing NHTC’s Results

Restructuring initiatives played a significant role in quarterly results. Natural Health substantially completed measures announced in the prior quarter, including relocating about 40% of product sourcing from America to East Asia to reduce tariff uncertainty and streamline logistics. Workforce optimization and office downsizing were also part of the plan.

Restructuring-related charges totaled $283,000 in the fourth quarter across cost of sales and SG&A. Excluding these charges, operating loss would have been $352,000, suggesting some underlying improvement in cost structure.

Additionally, despite a pre-tax loss, the company recorded $175,000 in tax expense due to higher foreign tax obligations, which contributed to the net loss.

Natural Health’s Guidance

Management expects to realize a significant portion of approximately $1.5 million in annualized cost savings from restructuring during 2026. While no formal revenue or earnings guidance was provided, executives expressed confidence that cost reductions and anniversary-driven initiatives could help position the company on a path toward improved performance.

NHTC’s Other Developments

On Feb. 2, 2026, the board declared a quarterly cash dividend of $0.10 per share, payable on Feb. 27 to shareholders of record as of Feb. 17, 2026. The continued dividend underscores management’s stated priority of returning capital to shareholders even as NHTC navigates operational headwinds and restructuring efforts.

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