Where’s The Remedy For Nova Lifestyle Inc. (NASDAQ: NVFY)?


Nova Lifestyle Inc. (NASDAQ: NVFY) disappointed in its 2Q2016 with sales and earnings that dipped compared to the same period last year. However, the management remains upbeat that the future of the company is bright despite near-term pressures.

What exactly is the management doing to remedy the situation and what outcomes can you expect from those actions?

Selling to property developers

Nova Lifestyle Inc. (NASDAQ: NVFY)’s CEO, Jeffrey Wong, says that selling to property developers and hotel apartments could prove to be lucrative sales channels for the company. He noted that the channels could not only help Nova Lifestyle to overcome the weakness in its industry, but also pave the way for long-term sales growth.

In particularly, Nova Lifestyle sees opportunity for large orders in selling to property developers and hotels given that these customers are known to buy complete sets of furnishings. Furthermore, these customers can place orders for full furnishing sets for multiple dwelling units.

Online sales

Another opportunity that Nova Lifestyle Inc. (NASDAQ: NVFY) wants to exploit to boost sales is expanding Internet sales channel. CEO Wong is of the view that the Internet provides a wide range of benefits, including a broader customer reach.

The fact that younger shoppers are increasingly using the Internet to discover products that they may like means that Nova Lifestyle can use the online shopping trend to its advantage. Furthermore, the Internet simplifies ordering and paying for products, which suits the need of busy professionals who can complete furnishings purchase transaction conveniently at home or from the office.

How Nova Lifestyle Inc. (NASDAQ: NVFY) Lifestyle fared in 2Q

Nova Lifestyle Inc. (NASDAQ: NVFY) reported net sales of $24 million in 2Q2016, which dipped 17.8% YoY. A sharp decrease in volumes was mostly responsible for the weak topline results, which is why Nova Lifestyle is trying to be aggressive with strategies such as online sales and selling to property developers and hotels that can help lift volumes.

The company posted EPS loss of $0.03 compared to EPS loss of $0.01 in the same quarter last year.


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