Nova LifeStyle, Inc. reported its financial results for the second quarter ended June 30, 2025, with net sales decreasing by 5% to $2.56 million compared to $2.69 million in the prior year. This decline was primarily due to a 12% decrease in sales volume, partially offset by a 26% increase in the average selling price. The company's gross profit margin expanded significantly to 50% for the quarter, up from 44% in Q2 2024, reflecting its strategic shift to higher-margin products.
For the six months ended June 30, 2025, net sales increased by 3% to $5.19 million from $5.06 million, driven by a 32% increase in average selling price that mitigated a 22% decrease in sales volume. The gross profit margin for the six-month period also rose to 48% from 44%, further validating the company's strategic pivot. Net loss for the six months narrowed significantly to $0.63 million from $2.03 million in the prior year.
Operating expenses showed improved control, with selling expenses decreasing by 24% in Q2 2025 and 34% for the six-month period due to reduced marketing. General and administrative expenses also declined by 9% in Q2 and 10% for the six months. Research and development expenses saw a drastic reduction to $910 for the six months from $0.75 million in the prior year, as spending on AI and IT systems was scaled back.
Despite these operational improvements, the company's accumulated deficit of $50.62 million as of June 30, 2025, raises substantial doubt about its ability to continue as a going concern. Management plans to address this through participation in major U.S. furniture fairs, developing innovative IT systems, and raising additional capital from the market. North America remains the primary revenue driver, accounting for nearly all sales in Q2 2025.
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