Nautilus, Vancouver, Washington, reported third quarter 2018 sales of $91.1 million, a 3.3 percent increase year-over-year, according to financials released Oct. 29.
The quarter's growth was driven by strong retail sales, particularly with the brand's bikes, treadmills and Max Trainer. Overall, retail sales grew 14.9 percent over the same period last year.
Nautilus' strong retail sales helped offset a drop in direct segment sales, which decreased 14.8 percent year over year. The company cited a nearly 20 percent reduction in its media spending as the reason for the drop. This reduction occurred to prepare for the launch of the new Max Trainer line in November, Nautilus CEO Bruce Cazenave said in a media release. However, direct segment sales for the Bowflex LateralX remained strong during the quarter.
“Our third quarter performance was substantially in-line with our expectations, driven by strong growth in the retail segment, reflecting double-digit increases in both our mass retail channel as well as the specialty and commercial channel," Cazenave said. "During the quarter, we successfully launched a number of new products including the Bowflex LateralX trainer in the direct segment and the Octane MTX Max Trainer, the commercial grade version of our popular Max Trainer line. ... We anticipate a reversal of recent sales trends in our direct segment during the fourth quarter based on these new products and the planned marketing support behind the introduction of our exciting new digital platform.”
Nautilus is planning to launch its new Max Intelligence Platform digital offering by the end of the 2018. Cazenave said the cloud-based platform addresses competitive challenges in the market and will be the brand's primary focus for the year's fourth quarter.
"The Max Intelligence Platform is Nautilus' groundbreaking cloud-based adaptive coaching technology designed to help our customers reach their fitness goals," Chief Operating Officer William McMahon said in a Oct. 29 conference call with shareholders. "Through an initial fitness assessment and ongoing predictive analytics, Max Intelligence tracks and collects data from the user's history of workouts, learns their capabilities and customizes new workouts every day. Initially available on the new Bowflex Max Trainer M6 and M8 cardio machines, the Max intelligence Platform brings Max to life as a virtual personal fitness coach, making unique connections to subscribers via spoken instruction, motivation and praise that encourages users to stay focused on achieving their goals. Max's tone is friendly, approachable and delivers the guidance and fitness fundamentals that users need to succeed."