Precor Announces Partnership with Planet Fitness, 6 Percent Drop in Mid-Year Revenue

Amer Sports President and CEO Heikki Takala said that Precor's strong growth in China and Japan during the first half of 2018 was offset by weaker sales in the Americas and Europe. (Photo by Eric Thayer/Getty Images.)

Precor, Woodinville, Washington, reported a 6 percent decrease in mid-year 2018 net sales with a 2 percent increase in local currencies, according to financials released on July 26 by Amer Sports, the Finland-based parent company of Precor. But a new contract with Planet Fitness, Hampton, New Hampshire, bodes well for the company's future, according to Precor. 

For the first six months of 2018, Precor reported €158.9 million ($182.89 million) in net sales versus €168.9 million ($195.13 million) through the first six months of 2017. This includes sales of €32.7 million ($37.78 million) in Europe, the Middle East and Africa (EMEA), €97.9 million ($113.10 million) in the Americas and €27.7 million ($32 million) in Asia Pacific—representing decreases of 4 percent, 8 percent and 2 percent, respectively.

Strong growth in China and Japan was offset by weaker sales in the Americas and EMEA, Amer Sports President and CEO Heikki Takala said in a July 26 conference call to shareholders. He also noted that brand sales are historically biased to the second half of the calendar year.

During the call, Takala confirmed that Precor recently signed a two-year, $30 million vendor agreement with Planet Fitness. He said it was the most lucrative contract of its kind in Precor’s history.

“[N]ow we expect the top line to start really re-igniting, and one of the key building blocks is the contract we made with Planet Fitness, and we expect it to be worth at least $30 million over the two years, and the starting for that contract—the start of the deliveries—is expected to be in Q4 this year,” Takala said during the call. “So we believe that the Planet Fitness deliveries will start to be significant in Q4. We may actually get some in Q3 already, but that’s now being prepared, and we’re starting to prepare for the production. And then it’s really up to the customer when they want to plan to take the deliveries and installations [based on] when the new gyms are opening and when there is a replenishment cycle.”

Until recently, Planet Fitness maintained a preferred vendor contract with Life Fitness. During a July 26 earnings call for Brunswick, the parent company of Life Fitness, Brunswick Chairman and CEO Mark Schwabero confirmed that Planet Fitness would be offering "broader equipment choices" to its franchisees starting in the third quarter of 2018.