Mannatech Incorporated (MTEX) Q1 2025 earnings summary

Executive summary

• Net sales for Q1 2025 were $26.6 million, down 9.6% year-over-year, mainly due to weaker demand in Asia and adverse currency effects.

• Net loss was $1.5 million ($0.80 per diluted share) compared to net income of $1.2 million ($0.63 per diluted share) in Q1 2024.

• Gross profit margin declined to 74.3% from 78.6% year-over-year, impacted by higher product costs, inventory markdowns, and increased freight costs.

• Active associates and preferred customers fell to 129,000, a 9.8% decrease from the prior year.

Financial highlights

• Net sales decreased by $2.8 million (9.6%) year-over-year; constant dollar sales fell 5.4%.

• Gross profit dropped by $3.4 million (14.6%) to $19.7 million; gross margin fell 4.3 percentage points.

• Operating loss was $0.8 million, compared to operating income of $0.8 million in Q1 2024.

• Commissions and incentives expense decreased 9.7% to $10.6 million; selling and administrative expenses fell 5.4% to $10.0 million.

• Foreign exchange loss of $0.4 million, compared to a $0.9 million gain in the prior year.

Outlook and guidance

• Management expects existing liquidity and cash flows from operations to be adequate for the next twelve months.

• Business reorganization plan focuses on revenue growth, margin improvement, and cost control, including price increases and compensation plan adjustments.

• Risks to outlook include further supply chain disruptions, decreased consumer demand, and unsuccessful reorganization efforts.