Nautilus, Vancouver, Washington, reported second quarter 2018 sales of $75.5 million, a 2 percent decrease year-over-year, according to financials released July 31. The company also reported flat net sales—$190.3 million—for the first six months of 2018.
Nautilus’ retail segment net sales were a strong point for the quarter, increasing 5.7 percent to $39.2. This reflected growth across multiple products lines, especially in the mass retail channel. However, direct segment net sales dropped 11 percent year-over-year due to a decline in sales of the Max Trainer and TreadClimber.
"Our overall performance was in-line with our expectations for the second quarter, historically the seasonally slowest quarter of the year,” Nautilus CEO Bruce M. Cazenave said in the release. “We continued to see solid momentum in our retail segment during the second quarter, which achieved 5.7 percent year-over-year growth, driven by double-digit expansion in our mass retail channel. Our direct segment remained challenged in the second quarter by the continued phase-down of the mature TreadClimber and softer than expected results from Max Trainer. We expect strong growth in the direct segment in the back-half of 2018 based on new product launches and the introduction of our new digital platform, which will be incorporated onto an upgraded and refreshed Max Trainer product line.”
Quarterly operating income decreased to $1.2 million from $3.8 million during the same period last year. The company also reported a drop in EBITDA from continuing operations to $3.3 million versus $6.2 million during the second quarter of 2017.
Cazenave raised Nautilus’ 2018 revenue guidance to the range of $431 million to $440 million, with operating income between $42 million and $45 million. He said he believes key product launches, such as the Bowflex LateralX and the Octane MTX Max Trainer, in addition to fall season retail orders will improve Nautilus’ revenue during the second half of the year.
“We are also pleased with the progress to date on several of the key strategic initiatives we outlined earlier in the year,” Cazenave said. “Specifically, we have ramped up investments in the international channel, and key logistics and systems integration initiatives have been completed. While there is much we still need to do to accomplish the acceleration in future top line and bottom line growth, we believe we are on track to deliver on our stated objectives for 2018.”