Nova LifeStyle, Inc. Reports First Quarter FY 2025 Results

Rhea-AI Summary

Nova LifeStyle (NASDAQ: NVFY) reported its Q1 2025 financial results, showing mixed performance. Net sales increased by 11% to $2.64 million compared to $2.38 million in Q1 2024, driven by a 26% increase in average selling price despite a 12% decrease in sales volume. North American sales grew 12% to $2.62 million.

The company's gross profit rose to $1.20 million with an improved gross margin of 46% (up from 43% in Q1 2024). Net loss significantly decreased to $0.34 million, compared to a $1.46 million loss in the same period last year. Under newly appointed CEO Xiaohua Lu, the company is focusing on developing forward-thinking product lines amid industry uncertainties related to tariffs.

Positive

• Net sales increased 11% YoY to $2.64 million
• Average selling price increased by 26%
• Gross profit margin improved to 46% from 43% YoY
• Net loss significantly reduced to $0.34M from $1.46M YoY
• North American sales grew 12% to $2.62 million

Negative

• Sales volume decreased by 12%
• Company still operating at a loss ($0.34M)
• Facing uncertainty related to tariffs in the furniture industry

Insights

Financial Analyst

Nova LifeStyle reported improved Q1 results with 11% revenue growth and reduced losses despite volume decline, showing strategic price increases are working.

Nova LifeStyle's Q1 2025 results reveal a company making progress despite challenging market conditions. The 11% revenue increase to $2.64 million is particularly noteworthy given it occurred despite a 12% decrease in sales volume. This indicates their strategic pivot to higher-margin products is yielding results.

The company's ability to increase average selling prices by 26% demonstrates pricing power and improved product positioning. This shift has directly benefited the bottom line, with gross profit increasing to $1.20 million and gross margins expanding from 43% to 46%.

Most significant is the substantial reduction in net loss, which improved from $1.46 million in Q1 2024 to $0.34 million in Q1 2025. This 77% reduction in losses shows management's cost control efforts alongside their revenue growth strategies are moving the company toward profitability.

North America continues to be Nova's primary market, with sales increasing 12% to $2.62 million, representing 99% of total revenue. This heavy geographic concentration creates both opportunity and risk, especially with the mentioned tariff uncertainties that could impact the furniture industry.

The commentary from new CEO Xiaohua Lu suggests a forward-looking product development strategy, though specific initiatives remain undefined. With improved margins and narrowing losses, Nova LifeStyle appears to be executing a turnaround strategy focused on premium positioning rather than volume growth.

LOS ANGELES, May 15, 2025 (GLOBE NEWSWIRE) -- Nova LifeStyle, Inc. (NASDAQ: NVFY) (“Nova LifeStyle” or the “Company”) today announced financial results for the first quarter ended March 31, 2025.

Mr. Xiaohua Lu, newly appointed Chief Executive Officer of Nova LifeStyle, stated, “This is a very exciting time for Nova LifeStyle as we strategize moving forward among the uncertainty related to tariffs and the impact on the furniture industry. The first quarter showed our products are well received considering an increase in revenues, all of which can be attributed to our higher margin product lines, which also improved our gross profit numbers and margins. As we plan for the remainder of 2025 and beyond, I believe it starts with a product line that is forward thinking and anticipating new trends. As the new CEO, I am eager to work with the entire team and being aggressive in our product lines development.”

Key Financial Highlights:

• Net sales for the three months ended March 31, 2025 were $2.64 million, an increase of 11% from $2.38 million for the same period of 2024. This increase in net sales resulted primarily from 26% increase in average selling price, while partially offset by 12% decrease in sales volume. The $0.26 million increase in net sales for the three months ended March 31, 2025, compared to the same period of 2024, was mainly due to increased sales to North America. Sales to North America increased by 12% to $2.62 million for the three months ended March 31, 2025, compared to $2.33 million for the same period of 2024, such increase mainly due to increase our average selling price by 26% from the customers in North America.
  
• Gross profit was $1.20 million for the three months ended March 31, 2025, compared to $1.02 million for the same period of 2024, representing an increase in gross profit of $0.19 million. Our gross profit margin was 46% for the three months ended March 31, 2025, compared to 43% for the same period of 2024. The increase in gross profit and gross profit margin was mainly a result of selling more products with higher profit margin.
  
• Net loss was $0.34 million for the three months ended March 31, 2025, compared to net loss $1.46 million for the same period of 2024.
  

About Nova LifeStyle
Nova LifeStyle, Inc. is a well-established, innovative designer and distributor of modern lifestyle furniture; primarily sofas, dining room furniture, cabinets, office furniture and related components, bedroom furniture and various accessories, in matching collections. Nova LifeStyle’s product lines include the Nova Brands and Diamond Sofa (www.diamondsofa.com). Nova's products feature urban contemporary styles that integrate comfort and functionality, incorporating upscale luxury designs which appeal to middle and upper middle-income consumers in the USA, China, Southeast Asia, South America, and elsewhere in the world.

Visit Nova LifeStyle's website at www.NovaLifeStyle.com.

Forward-Looking Statements

This press release may contain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, including, among others, our ability to fully resume our operations and remain financially healthy, our expected future growth prospects. All statements other than statements of historical fact are, or may be deemed to be, forward-looking statements. In some cases, forward-looking statements can be identified by the use of forward-looking terms such as “anticipate,” “estimate,” “believe,” “continue,” “could,” “intend,” “may,” “plan,” “potential,” “predict,” “should,” “will,” “expect,” “objective,” “projection,” “forecast,” “goal,” “guidance,” “outlook,” “effort,” “target,” “trajectory” or the negative of these terms or other comparable terms. However, the absence of these words does not mean that the statements are not forward-looking. These forward-looking statements are based on certain assumptions and analyses made by us in light of our experience and our perception of historical trends, current conditions and expected future developments, as well as other factors we believe are appropriate in the circumstances.

Investor Relations Contact
Andrew Barwicki
516-662-9461
andrew@barwicki.com
ir@novalifestyle.com

FAQ

What were NVFY's Q1 2025 earnings results?

Nova LifeStyle reported Q1 2025 net sales of $2.64M (up 11% YoY), gross profit of $1.20M with 46% margin, and a net loss of $0.34M, improved from $1.46M loss in Q1 2024.

How did Nova LifeStyle's North American sales perform in Q1 2025?

North American sales increased by 12% to $2.62 million in Q1 2025, primarily driven by a 26% increase in average selling price.

Who is the new CEO of Nova LifeStyle (NVFY)?

Xiaohua Lu was appointed as the new Chief Executive Officer of Nova LifeStyle.

What caused the improvement in NVFY's gross margin for Q1 2025?

The gross margin improved to 46% from 43% YoY mainly due to selling more products with higher profit margins.

How much did NVFY's average selling price increase in Q1 2025?

Nova LifeStyle's average selling price increased by 26% compared to Q1 2024.