Strong retail sales helped Nautilus Inc. lift revenues in its first fiscal quarter — though earnings thinned.
Retail sales for the quarter rose $43 million, according to its Monday earning report, for a 13.7 percent rise over last year’s first quarter. The first fiscal quarter ended March 31.
The bump in retail helped the Bowflex maker overcome a drop in its direct-to-consumer sales, which fell 4.7 percent to $71.2 million. In all, total revenues climbed 1.4 percent to $114.8 million.
CEO Bruce Cazenave told investors the direct-to-consumer drop was expected as Nautilus shakes up its product line. He said new machines, like the Bowflex HVT, have already shown promise.
“New products introduced during the middle of last year … continued to meaningfully contribute during the first quarter, and we are on track to launch additional direct and retail segment products later this year,” he said.
Still, the company’s earnings took a hit. Operating income dropped from $12.7 million to $10.7 million — a 15.7 percent drop — as the company’s latest products have slimmer margins, it said. Nautilus also spent more on advertising.
Net income for the quarter was $8.1 million, or 27 cents per diluted share. Nautilus posted $8.2 million net income this time last year, or 26 cents per diluted share.
Cazenave told investors that Nautilus is correcting the course with a new plan to trim warehousing expenses while driving sales with new digital technology platforms.
“We are well positioned to return to full-year top line growth in 2018,” he said.
Nautilus also bought back $2.7 million of its stock, traded on the New York Stock Exchange as NLS. Shares on Monday closed trading at $15.50 per share, up 35 cents.
