Precor, Woodinville, Washington, net sales fell 3 percent in local currencies in 2015 to EUR357.3 million ($389.7 million) despite year-over-year growth in the fourth quarter and in international sales, according to financials released last week by parent company Amer Sports, Helsinki, Finland.
Precor's American sales, which accounted for 61 percent of total sales during the year, fell 8 percent to EUR217.8 million ($237.6 million) in 2015. Precor grew 16 percent in the Asia-Pacific region to EUR55.1 million ($60.1 million), and grew 2 percent in the Europe, Middle East and Africa region to EUR84.4 million ($92.1 million) in 2015.
Precor's sales in the fourth quarter of 2015 were EUR116.1 million ($126.7 million), marking a four percent growth over the fourth quarter of 2014. Third quarter sales were EUR89.3 million ($101.4 million), second quarter sales were EUR82 million ($90.7 million) and first quarter sales were EUR69.9 million ($75.4 million) in 2015.
"Fitness and cycling were slightly down; both are still going through a business model renewal and restructuring as we integrate them into the company and as we are especially going direct with an in-house salesforce to the market," Amer Sports CEO Heikki Takala told analysts in a conference call. "We were expecting, of course, some positive impact toward the year end, but the integration takes a bit of time. Looking into 2016, we expect that our strong initiative pipeline will start to contribute, especially as of quarter two. So, we are relatively confident that these businesses will contribute."
Takala called the market competitive and said the fitness segment's shift from a dealer model to an in-house model has "gone well," and is "up and running."
"… but it always takes some time before you get full productivity, so it's not like you start selling at full speed day one when you join, so that’s been a time lag," Takala told analysts. "There are a lot of big things happening, and we had a couple of gaps in our offering, which as we have communicated, we have proactively filled during 2015 for 2016."
Those gaps were filled by the Queenax acquisition in July 2015 and the licensing agreement with Mad Dogg Athletics in September 2015 to assume Spinner bike production. The Queenax business is "very healthy," and the Spinner production is starting to contribute, Takala said. The first Spinner bikes started shipping last week.
"And then we have good news going into the new season as of Q2, Q3, where we have new exciting innovations and line ups, et cetera, which are going to be new building blocks, which we didn’t have in the past," Takala told analysts without sharing further details.
Amer Sports reported net sales of EUR783.7 million ($854.8 million) in the fourth quarter of 2015 across all of its segments, marking a growth of 5 percent in local currencies over the fourth quarter of 2014. Net sales across segments in 2015 grew 5 percent in local currencies to EUR2.53 billion ($2.76 billion). The company said it will focus on growing the core business and accelerating five prioritized areas in 2016: apparel and footwear, United States, China, business to consumer, and digitally connected devices and services.
"I’m pleased to confirm that the company [Amer Sports] is firmly on a sustainable growth path," Takala said. "Our strategies are working, and we execute with full speed, focusing on continuous improvement and renewal."
Editor's note: Euro to U.S. dollar conversions are based on the Feb. 3 exchange rate, except for Precor's quarterly sales figures from 2015. Precor's quarterly sales figures for the first three quarters of 2015 were calculated on previous exchange rates.