August 08, 2017
NHT Global Sees Revenue Drop 36% in Q2 2017
Natural Health Trends Corp., the Rolling Hills Estates, California-based direct selling and e-commerce company that markets premium quality personal-care, wellness and “quality of life” products under the NHT Global brand, recently announced its financial results for the quarter ended June 30, 2017.
Total revenue decreased 36 percent to $51.5 million, compared to $80.4 million in the second quarter of 2016. Revenue from the company’s Hong Kong operations, which represented 89 percent of total revenue, decreased 38 percent to $45.7 million, compared to $73.3 million in the second quarter of 2016.
Revenue outside of Hong Kong decreased 18 percent to $5.8 million, compared to $7.1 million in the second quarter of 2016, and was partly mitigated by an increase in Europe of 256 percent year-over-year.
Operating income decreased 14 percent to $12.9 million, compared to $14.9 million in the second quarter of 2016. As a percent of total revenue, operating income was 25 percent, compared to 19 percent in the second quarter of 2016.
Net income was $10.3 million, or 91 centsper diluted share, compared to $12.2 million, or $1.07 per diluted share, in the second quarter of 2016. The number of Active Members decreased 6 percent to 107,290 at June 30, 2017, compared to 113,710 at March 31, 2017, and decreased 15 percent compared to 126,440 at June 30, 2016.
“Our revenue for the second quarter declined by 14 percent from the prior quarter primarily due to the slowdown we have been experiencing in our Asian markets since the third quarter of 2016,” said Chris Sharng, President of Natural Health Trends Corp. “Further, the second quarter of 2016 presented a challenging year-over-year comparison due to record product orders in anticipation of a significant product price increase effective last June. Partially offsetting the year-over-year decrease in net sales was strength in Europe, our market opening in Peru and a positive response to our most recent product introductions.”
Year-to-date, NHT’s total revenue decreased 28 percent to $111.3 million, compared to $154.7 million in the first six months of 2016. Operating income decreased 11 percent to $25.9 million, compared to $28.9 million in the first six months of 2016. As a percent of total revenue, operating income was 23 percent, compared to 19 percent in the first six months of 2016.
Mr. Sharng further commented, “We are pleased to announce we received preliminary approval for a direct selling license in Malaysia, which correlates perfectly with our summer Ambassador Academy event we have been actively preparing for in Kuala Lumpur. We also recently celebrated our grand opening in Peru and received registration approval for key products, enabling us to generate nearly $500,000 in product orders during the quarter.
“In addition, we are working to reinvigorate momentum in Asia by enhancing our incentive programs and adjusting our bonus and reward programs to provide more resources to the most productive and up-and-coming members. While it will take time to restore our Asian markets to growth and to train our leaders to navigate the challenges involved with operating through a slowdown, we believe the measures we have taken to enhance our matching bonus and ease rank advancement will help attract, motivate and retain a strong member base.”
To read the full Q2 2017 report, click here.