Natural Health Trends (NHTC) Q2 2026 earnings summary

Executive summary

• Q2 2026 net sales were $7.6 million, a 23% year-over-year decline, mainly due to cautious consumer spending and regulatory uncertainty in China and Hong Kong, with Hong Kong (mainly sales to China) accounting for 83% of revenue.

• Gross profit margin improved to 75.2% from 73.9% year-over-year, attributed to shifting manufacturing to East Asia to reduce tariff exposure and logistics costs.

• Operating loss was $643,000 in Q2 2026, compared to $333,000 in Q2 2025; net loss was $451,000 or $0.05 per diluted share, versus net income of $15,000 last year.

• Restructuring initiatives led to $300,000 in quarterly cost savings and over $600,000 year-to-date, with further savings expected in the second half of 2026.

• The board authorized resumption of share repurchases, with $15.9 million remaining under the program; $10.3 million was used for repurchases and dividends in the first half of 2026.

Financial highlights

• Q2 2026 net sales were $7.6 million (down 23% YoY); H1 2026 net sales were $16.8 million (down 18% YoY).

• Gross profit for Q2 2026 was $5.7 million (75.2% margin); H1 2026 gross profit was $12.6 million (75.1% margin).

• Operating expenses for Q2 2026 were $6.4 million, down from $7.6 million in Q2 2025.

• Net cash used in operating activities was $2.2 million for the first six months, down from $5.2 million in the prior year period.

• Cash, cash equivalents, and marketable securities totaled $18.6 million at June 30, 2026, down from $28.9 million at year-end 2025.

Outlook and guidance

• Management expects continued uncertainty in China due to regulatory changes and negative consumer sentiment, with further restructuring or compliance actions possible.

• Additional cost savings from restructuring are expected in the second half of 2026.

• Focus remains on financial discipline, innovation, digital enhancements, and global field engagement, with ongoing investment in China-based manufacturing and infrastructure.

• 25th anniversary celebration in Hong Kong planned for Q3 2026, expected to boost engagement.