Natural Health Trends Corp. NHTC reported earnings per share (EPS) of 2 cents in the second quarter of 2024 against the year-ago loss of 2 cents per share.

Revenues in Detail

Natural Health registered revenues of $10.5 million in the second quarter, down 0.3% year over year.

Lower revenues from the majority of the segments dampened the topline.

Segment Details

Natural Health derives revenues from three segments — Primary Reporting Segment, China and Russia and Kazakhstan.

For the quarter under review, Primary Reporting Segment revenues were $10 million, down 1.1% from the year-ago quarter.

Revenues in the China region totaled $0.3 million, up 36% year over year.

The Russia and Kazakhstan region generated revenues of $0.1 million, down 7.2% from the year-ago quarter.

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 Gross Margin

In the quarter under review, Natural Health’s gross profit declined 0.9% to $7.8 million. The gross margin contracted 40 basis points (bps) to 74.2%.

The decline in gross profit margin for the three-month period ended Jun 30, 2024, was primarily attributable to higher costs related to the company’s Premium Noni Juice product.

Adjusted Operating Expenses Analysis

Selling, general and administrative expenses declined 6.6% to $3.8 million.

Profitability

Adjusted operating profit totaled $3.9 million, which increased 5.3% from the prior-year quarter. The adjusted operating margin in the second quarter expanded 203 bps to 37.9%.

In the second quarter, Natural Health’s net income was $0.2 million against the year-ago quarter’s net loss of $0.2 million.

Liquidity & Debt Management

Natural Health exited second-quarter 2024 with cash and cash equivalents of $15.6 million compared with $25.8 million at the first-quarter end.

Cumulative net cash used in operating activities at the end of second-quarter 2024 was $3 million compared with $3.3 million a year ago.

Our Take

Natural Health exited the second quarter of 2024 with encouraging bottom-line results. The uptick in revenues in the China region is also promising. The adjusted operating margin expansion also bodes well.

However, dismal top-line results and lower revenues from the Primary Reporting Segment and Russia and Kazakhstan region were discouraging. During the reported quarter, the gross margin contracted, which did not bode well.

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