Natural Health Trends Corp. (NASDAQ: NHTC) reported a net loss of $154,000, or $0.02 per share, on revenue of $9.206 million for the first quarter of 2026, a 14% decline from the $10.700 million earned in the same period last year. The loss reflects continued pressure from high commission expenses and a shrinking member base, while the company’s top line has stabilized after a year of negative operating cash flow.
The company’s earnings per share fell to $0.02 from $0.01 in Q1 2025, and active members dropped to 26,400 as of March 31, 2026, down from 30,180 a year earlier. The decline in the member base is a key driver of the revenue shortfall, as the business relies heavily on recurring member fees for a significant portion of its income.
Gross profit margin improved to 75.0% in Q1 2026 from 73.6% in Q1 2025, driven by a shift in manufacturing from the United States to East Asia that reduced tariff exposure and lowered production costs. The margin expansion offsets some of the revenue decline and signals that the company’s cost‑control initiatives are beginning to pay off.
Management highlighted that restructuring efforts begun in Q4 2025 are generating cost savings, with operating expenses reduced by approximately $300,000 in the first quarter. In addition, the company is investing in technology, including a new back‑office platform, an AI‑powered member app, and AI agents for logistics and member services, and has launched an enhanced website to support these initiatives.
Investors reacted negatively to the results, citing the revenue decline, loss, and the company’s heavy reliance on the Hong Kong/China market, which accounts for roughly 83% of total revenue. Management did not provide forward‑looking guidance, leaving uncertainty about the trajectory of revenue and profitability in the coming quarters.
The earnings report underscores the challenges Natural Health Trends faces in a concentrated market and a shrinking member base, while also highlighting progress in margin improvement and cost‑control efforts that could support a turnaround if the company can stabilize revenue and continue to execute its restructuring and technology plans.
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