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Shares of Natural Health Trends Corp. NHTC have lost 1.1% since the company reported its earnings for the quarter ended Dec. 31, 2024. This compares to the S&P 500 Index’s 0.4% gain over the same time frame. Over the past month, the stock gained 12.3%, significantly outperforming the S&P 500’s 2.8% rise.
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Key Performance Metrics
For the fourth quarter of 2024, Natural Health reported revenues of $10.8 million, which was nearly flat compared with $10.9 million in the same quarter of 2023. Notably, sales in its primary market, Greater China, increased 7% year over year and 9% sequentially, driven by targeted programs and promotions. The company recorded an operating loss of $421,000, widening from a loss of $292,000 in the prior year. Net income for the quarter was $176,000, or $0.02 per diluted share, down 50.8% from $358,000, or $0.03 per diluted share, a year ago.
For the full year, revenue declined 2.2% to $42.9 million from $43.9 million in 2023. Operating loss narrowed to $1.3 million from $1.7 million, reflecting cost control measures. Net income for the year was $572,000, which was consistent with the prior year. Gross profit for the year totaled $31.8 million, with a gross margin of 73.9%, down 2.9% from a gross profit of $32.7 million with a gross margin of 74.6% in 2023 due to higher freight costs.
Natural Health Trends Corp. Price, Consensus and EPS Surprise
Natural Health Trends Corp. price-consensus-eps-surprise-chart | Natural Health Trends Corp. Quote
Other Key Business Metrics
Natural Health’s active member count stood at 30,870 as of Dec. 31, 2024, relatively unchanged from 30,880 on Sept. 30, 2024, but decreased 4.8% compared with 32,410 at the end of 2023. Commissions expense, as a percentage of sales, increased marginally to 41.9% in fourth-quarter 2024 from 41.6% in the prior-year quarter. Selling, general, and administrative expenses rose 2.1% to $3.9 million in fourth-quarter 2024 from $3.8 million in the previous year, attributed to the timing of professional services expenses.
Factors Influencing Results
The gross margin of 74.2% in fourth-quarter 2024 was slightly lower than 74.5% in the prior-year quarter, largely due to higher freight costs. Supplemental incentive programs contributed to the increase in commissions expense as a percentage of net sales. Meanwhile, the company continued to face challenges from reduced product promotions and strategic pricing changes, which impacted performance in secondary markets.