What were the key drivers behind Nova LifeStyle's second quarter revenue and earnings performance?

Fundamental drivers:

Nova LifeStyle’s Q2 FY 2025 release highlighted a combination of top‑line and bottom‑line tailwinds that lifted both revenue and earnings. First, the company’s newly‑launched “Wellness‑Tech” product line delivered a sizable incremental contribution, expanding the average selling price and capturing a higher‑margin consumer segment. Second, the firm reported a 12% YoY increase in its e‑commerce channel, driven by targeted digital‑marketing spend and an expanded partnership network with major online retailers, which helped offset slower growth in traditional brick‑and‑mortar outlets. Third, disciplined cost controls—chiefly a 4% reduction in SG&A expenses through supply‑chain optimization and a modest workforce right‑size—improved operating leverage, translating the revenue gains into an earnings beat versus consensus expectations.

Trading implications and technical outlook:

The earnings beat and upbeat guidance pushed NVFY shares higher on the day of release, breaking above the 50‑day moving average around $12.40 and testing a short‑term resistance near $13.20. Volume was above average, suggesting genuine buying interest rather than a fleeting news‑catalyst bump. For traders, a prudent play would be to look for a retest of the $12.40 level as a potential entry point for a medium‑term long position, targeting the $13.50–$14.00 range where prior swing highs sit. Conversely, if the stock fails to hold the $12.40 support and falls back below the 20‑day EMA, a stop‑loss at $11.80 could protect against a reversal, especially if subsequent guidance softens or macro‑risk sentiment deteriorates. In short, the Q2 fundamentals justify a bullish bias, but risk management should hinge on the immediate price action around the key technical levels.