Precor, Woodinville, Washington, reported a 4 percent decline in net sales in local currencies in third quarter 2016 with sales year to date increasing 1 percent, according to financials released Thursday by Amer Sports, the Finland-based parent company of Precor.
Third quarter net sales were EUR84.1 million ($91.6 million) compared to EUR89.3 million in third quarter 2015. (Based on euro to dollar conversion rates as of Oct. 25, the third quarter 2015 dollar equivalent would be $97.2 million. Based on rates in November 2015, the dollar equivalent was $101.4 million.)
This is the second quarter of declining net sales for the company, which previously reported a 1.3 percent decline in sales in second quarter 2016 compared to second quarter 2015. Its first quarter 2016 net sales were up six percent over first quarter 2015 based on what the company said was its fitness segment "starting to re-ignite growth" due to strengthened distribution supported by product launches.
In early 2016, Precor launched a new P82 console, upgraded Preva to feature a modernized operating system, a line of three new Spinner bikes in conjunction with Mad Dogg Athletics Inc., and redesigned Discovery Series benches and racks. It also promoted its Queenax functional fitness system, which the company purchased in 2015, and its partnership with EXOS to bring the EXOS Energy Systems Development Technology to Preva-enabled cardio equipment.
In a call with analysts about the financial report, Amer Sports President and CEO Heikki Takala said that despite the third quarter decline, he expects future growth in the fitness segment.
"We do expect a level of growth, but that growth has taken some time," he said. "We have a pipeline which is fuller than ever. ... But getting that production machine going, getting our quality verified before we roll out, it takes some time; and, hence, we see the first impact especially now in Q4, and then going into Q1, Q2 into 2017.
"So we have remained in a significant investment mode here. We see that it's delivering a lot of good things out of the production line, and then now we just need to make it happen in the marketplace."
For the first three quarters of 2016, the fitness segment had net sales of EUR239.4 million ($260.7 million), a one percent increase in local currencies from the same period in 2015.
Overall, Amer Sports reported third quarter revenue of EUR736.8 million ($802.2 million) or a 4 percent increase in local currencies.
(Editor's Note: Conversion from euros to dollars for third quarter 2016 was based on rates as of Oct. 25, 2016, unless otherwise noted within the article.)