NHTC Stock Up Despite Q3 Earnings Decline, Lower Gross Margin

Core Viewpoint - Natural Health Trends Corp. (NHTC) reported breakeven earnings per share (EPS) for Q3 2024, a decline from the previous year's EPS of 2 cents [1] Revenue Summary - NHTC's revenues for Q3 2024 were $10.7 million, reflecting a year-over-year increase of 0.7% [2] - The Primary Reporting Segment generated revenues of $9.9 million, down 2.9% from the same quarter last year [3] - Revenues from the China region reached $0.6 million, up 136.6% year over year [3] - The Russia and Kazakhstan region contributed $0.1 million, an increase of 24.1% from the prior year [3] Gross Margin Analysis - The gross profit margin for Q3 2024 was 74.1%, a slight decrease from 74.7% in the previous year, primarily due to higher costs associated with the Premium Noni Juice product [4] Operating Expenses - Selling, general and administrative expenses rose by 0.3% to $3.9 million [5] Profitability Insights - The operating loss for Q3 2024 was $0.28 million, an improvement from the operating loss of $0.29 million in the prior year [6] - Net income for the quarter was $0.04 million, down from $0.2 million in the same quarter last year, attributed to lower interest income and higher effective tax rates [6] Liquidity and Debt Management - NHTC ended Q3 2024 with cash and cash equivalents of $22.9 million, up from $15.6 million at the end of Q2 [7] - Cumulative net cash used in operating activities was $3.5 million, compared to $4.2 million a year ago [7] Market Outlook - The company showed encouraging top-line results, particularly in the China and Russia and Kazakhstan regions [8] - Plans to launch new products in Turkey, including Skindulgence revitalizing serum and eye cream, are expected to enhance market presence [8] - However, the decline in bottom-line results and lower revenues from the Primary Reporting Segment are concerning [9] - Management noted weak consumer spending in the main market, which poses challenges for future growth [9]