Natural Health Trends (NASDAQ:NHTC) reported second-quarter revenue of $7.6 million, down 23% from $9.8 million in the prior-year quarter, as cautious consumer spending and regulatory uncertainty in China weighed on member activity and sales.
President Chris Sharng said consumers in China remained cautious about spending and investing during the quarter. Regulatory uncertainty also led some members to pause their activities, he said. In addition, the company identified conduct by certain members that violated its Hong Kong policies, procedures and professional code of conduct, which disrupted operations and adversely affected revenue and operating results.
Loss Widens Despite Margin Improvement
Senior Vice President and Chief Financial Officer Scott Davidson said the company’s restructuring program, implemented late last year, helped improve margins and reduce costs. Gross profit margin rose to 75.2% from 73.9% in the year-earlier period, which Davidson attributed to shifting much of product manufacturing from the U.S. to East Asia, closer to its principal markets.
Commissions expense represented 40.9% of revenue, unchanged from the second quarter of 2025. Selling, general and administrative expense declined by $323,000 year over year to $3.3 million.
Sharng said restructuring initiatives reduced operating expenses by approximately $300,000 during the quarter. The actions have generated more than $600,000 in savings so far this year, with further savings expected in the second half of 2026.
Product Launch and Field Engagement
During the quarter, the company introduced Super Nutri One, a tropical-flavored greens powder intended to support digestion, detoxification and immune health. Sharng said early customer response has been encouraging, with feedback citing the product’s taste, convenience and value proposition.
The company also hosted a group of field leaders at a primary manufacturing facility in Korea. According to Sharng, the visit was intended to give leaders direct exposure to Natural Health Trends’ manufacturing processes and quality standards.
Across its markets, the company continued to use product launches, promotional activities, recognition programs and incentives aimed at increasing engagement, strengthening customer loyalty and supporting long-term sales growth.
Cash Position and Share Repurchases
Net cash used in operating activities totaled $2.2 million during the first six months of 2026, compared with $5.2 million in the first half of 2025. Cash, cash equivalents and marketable securities were $18.6 million as of June 30, down from $28.9 million at the end of 2025.
Davidson said the decline was primarily driven by common-stock repurchases and dividend payments during the first half of the year.
The board authorized the resumption of repurchases under the company’s existing stock repurchase program on April 27. Natural Health Trends had $15.9 million remaining available under the authorization. Sharng said the decision reflects the board’s confidence in the business and its commitment to returning cash to shareholders.
Hong Kong Anniversary Event Ahead
Natural Health Trends plans to celebrate its 25th anniversary in Hong Kong next month, expecting to host more than 1,000 attendees from around the world. Customers will be able to qualify for prizes and rewards leading up to and during the event.
Management said the gathering will be used to reinforce the company’s long-term strategy, engage with global field leadership and highlight its plans for future growth. Looking ahead, Sharng said the company remains focused on financial discipline, investments supporting its competitive position, product innovation, enhanced digital capabilities and field engagement as it navigates challenging market conditions.
About Natural Health Trends (NASDAQ:NHTC)
Natural Health Trends Corp. is a U.S.-based holding company that develops, markets and distributes a range of plant-based health supplements, nutritional products and personal care items. The company’s product portfolio spans weight management, skin care, men’s health, nutritional supplements and wellness solutions designed to support overall health and beauty. Natural Health Trends focuses on delivering scientifically formulated products through modern e-commerce channels and direct selling platforms.
Through its principal subsidiaries in the People’s Republic of China—including Shanghai NHTC Health Products Co, Ltd.
