Nautilus, Vancouver, Washington, reported third quarter 2017 sales of $88.1 million, a 9 percent increase year-over-year, according to financials released Oct. 30.
Nautilus' direct segment sales increased 0.8 percent to $34 million due to the success of the Bowflex HVT, helping to offset the continued downward trend with TreadClimber products, according to a company release provided to Club Industry.
Retail segment sales grew 15.8 percent to $53.5 million, reflecting "strong seasonal sell-in with key traditional and e-commerce partners, partially offset by weakness in specialty and commercial customers."
"Our third quarter 2017 top line results were driven by stronger sell-in and broader placements of both existing and new products in traditional and e-commerce retail," CEO Bruce M. Cazenave said in the release. "In our Direct Segment, we experienced a slight increase in overall sales as the recently launched Bowflex Hybrid Velocity Trainer, "HVT", offset the continued declines in TreadClimber sales. We achieved over 60 percent growth in our operating income due to the strong Retail results and certain one-time benefits, including the retroactive finance fee adjustment and favorable settlement of an indemnification claim."
The company's operating expenses decreased 9.9 percent to $28 million due to lower finance fees related to a contract extension with a financing partner. Operating income during the quarter increased 62.8 percent to $13.4 million.
The company's year-to-date revenue stands at $278.4 million compared to $280.3 million year-over-year. Cazenave is projecting year-end 2017 revenue decrease of approximately 13 percent to 18 percent, or $44 million to $46 million.
"We planned to invest a significant amount of time during the third quarter to test, modify and optimize our messaging and media plans to support the new HVT line," he said in the release. "As a result of these efforts, our media planning has been updated and refined for the critical holiday season, November through January 2018, but the level of success achieved from these changes remains to be seen. ... While we expect that recent new product contributions will again drive growth in the fourth quarter, they will not likely be enough to offset the slow first half of the year."