Nova Lifestyle Inc. (NASDAQ:NVFY)
Nova Lifestyle Inc. (NASDAQ:NVFY) shares gained 21.5% after the innovative designer and distributor of modern lifestyle consumer products reported record Q3 2017 financial results. According to the Chief Executive Officer, Tawny Lam, the stellar financial results reflect the successful transformation of the company.
Returning Shareholder Value
Investors pushed the stock higher after the Chief Executive Officer reiterated they expect growth to continue into the fourth quarter. In addition, the executive says they plan to initiate stock buy-backs or start paying cash dividends to reward long-term shareholders.
The stellar financial results helped strengthen investors’ confidence in Nova Lifestyle Inc. (NASDAQ:NVFY)’s long-term prospects. The stock is currently trading in an uptrend after erasing all the losses accrued since the start of the year. The stock faces immediate resistance at $2.40, above which it could make a push for a 52-week high of $3.10 a share.
Q3 Financial Results
Renewed investor interest in Nova Lifestyle Inc. (NASDAQ:NVFY) follows the announcement of a 900% increase in net income that came in at $2.96 million or $0.11 a share. Net sales for the three months ended September 30, 2017, increased 8.8% to $33.2 million, compared to $30.5 million reported for the corresponding period last year.
Gross profit margin in the company improved to 18% on average, representing an increase of about 3%. Nova Lifestyle Inc. (NASDAQ:NVFY) attributes the stellar performance to a 200% increase in new product offerings combined with innovative product designs.
“Nova Lifestyle’s third quarter financial performance reflects the results of our successful transformation from an ‘asset heavy’ furniture-manufacturing business to a ‘light asset,’ high margin, consumer Product Company focused on innovative product designs and customer-centric marketing,” said Mr. Lam.
Nova Lifestyle’s Robust Growth
Strong customer demand across all product lines also continues to support Nova Lifestyle Inc. (NASDAQ:NVFY) growth prospects in the business. The company is projecting significant growth in the years to come, thanks to a record number of new product SKUs. This year, the company has increased its selection of bedroom offerings by 50%.
Rapid expansion is also expected to result in a diversified global customer base which should lead to more sales in the years to come.
“We see tremendous growth opportunities to further cement Diamond Sofa’s position as a leading product destination for retailers, home stagers, and designers,” said Mr., Lam.
I have no positions in any of the stocks mentioned, and have no plans to initiate any positions within the next 72 hours. All information, including any data, is provided without any guarantees of accuracy.
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About the author: James Marion is a University of Houston student studying Business with a concentration in Finance. James has interned with several investment professionals and hopes to pursue a career as a professional stock analyst after graduation.