Natural Health Trends (NASDAQ:NHTC) reported third-quarter revenue of $7.6 million, unchanged from the preceding quarter but down 20% from $9.5 million a year earlier, as consumer caution and ongoing challenges in China continued to weigh on sales.
President Chris Sharng said consumer pessimism in the company’s largest market has made customers more cautious about spending and investing. He also cited lingering effects from regulatory uncertainty in China and previously reported member misconduct.
The company introduced additional incentives and lower-priced packages during the quarter. Sharng said those efforts accounted for much of the year-over-year revenue decline but helped raise member counts and stabilize sales relative to the second quarter.
Losses Narrow as Expenses Decline
Natural Health Trends reported an operating loss of $277,000 for the third quarter, improving from an operating loss of $643,000 in the second quarter and $495,000 in the prior-year period. Net loss was $232,000, or $0.03 per diluted share, compared with losses of $451,000, or $0.05 per share, in the second quarter and $431,000, or $0.04 per share, a year earlier.
Senior Vice President and Chief Financial Officer Scott Davidson said the company continued to benefit from its previously announced restructuring program. Selling, general and administrative expenses totaled $3.2 million, down $80,000 sequentially and $433,000 from the prior-year quarter.
Sharng said operating expenses declined by nearly $500,000 during the quarter, bringing year-to-date savings to $1.1 million. The company attributed the lower costs, along with improved gross margin, to its reduced operating loss.
Gross profit margin was 74.2%, down from 75.2% in the second quarter because of the promotional mix offered to support teams and members. However, the margin improved from 73.7% in the third quarter of 2025, which Davidson said was largely due to the company’s shift to manufacturing in East Asia.
Commissions expense represented 35.9% of revenue, compared with 40.9% in both the preceding quarter and the year-earlier period. Davidson said the decrease primarily reflected lower weekly commissions earned after disciplinary action against certain members connected to the previously disclosed code-of-conduct matter.
China Remains a Key Focus
The operating environment in China remained difficult during the quarter, according to management. Still, Sharng said half of Natural Health Trends’ markets outside Hong Kong and China increased sales in the third quarter.
The company held a 25th anniversary event in Hong Kong that brought together approximately 1,000 members and guests from its international teams. Sharng said the event reinforced the company’s community and member engagement efforts.
Natural Health Trends also introduced an artificial intelligence-powered marketing and communication application for Chinese members. The mobile tool is intended to facilitate direct communications, with planned additions including AI-enabled search and product training features.
Management said it expects to introduce Move Prime, a citrus-flavored powder drink mix designed to support joint comfort and mobility, in the coming weeks. The company is also preparing a traditional Chinese medicine product for launch in China in the coming months.
Cash Position and Share Repurchases
Net cash used in operating activities totaled $3.3 million during the first nine months of 2026, compared with $5 million in the corresponding period of 2025.
Cash, cash equivalents and marketable securities stood at $17.6 million as of Sept. 30, down from $28.9 million at Dec. 31, 2025. Davidson said the reduction primarily reflected common-stock repurchases, dividends and cash used in operations during the first nine months of the year.
During the third quarter through early October, Natural Health Trends repurchased 85,291 shares for an aggregate $84,000. The board subsequently authorized further buybacks under the existing program, which had $15.8 million remaining available.
Looking ahead, Sharng said the company’s priorities are to maintain financial discipline, invest in areas that strengthen its competitive position, and provide its field organization with new products, digital tools and engagement opportunities. He said management believes those actions will position the company to benefit if market conditions improve.
About Natural Health Trends (NASDAQ:NHTC)
Natural Health Trends Corp. is a direct-selling company that develops and distributes health, wellness and beauty products under the NHT Global brand. Its product portfolio includes nutritional supplements, personal-care products, skin-care items and lifestyle goods.
The company markets its products through a network of independent distributors and customers rather than primarily through traditional retail channels. Its direct-selling model supports product distribution, customer enrollment and sales across several international markets.
Natural Health Trends has historically focused much of its business in Asia, including Hong Kong and mainland China, while also serving customers and distributors in other regions.
