After its sales spiked during the pandemic, as people were forced to work out at home, sales at Vancouver’s Nautilus Inc. have plummeted 51.3 percent compared with last year.
The company says that drop from $589.5 million in 2022 to $286.8 million in 2023, however, is just a return to pre-pandemic demand, according to its latest quarterly and year-end financial earnings report released Tuesday.
Nautilus is the parent company of Bowflex and Schwinn. It recently sold off its Nautilus brand, though it is retaining its corporate name for now.
The company, which has been working to return to profitability, reported a $105.4 million net loss in fiscal year 2023, compared with a net loss of $22.4 million in 2022. The earnings statement said that was driven by lower profit and higher expenses.
“Looking ahead, we remain confident in the long-term industry opportunity,” Nautilus CEO Jim Barr said in an investor call Tuesday afternoon. He added that the company’s research has shown a “steady shift” to at-home exercise.
Nautilus’ gross profit for 2023 was $52 million, compared with $148.5 million the year prior. Operating expenses declined for the fitness equipment company, which reported $145.3 million for 2023, compared with $173.8 million for the previous year.
In Tuesday’s call, Barr said the company has some new products coming out this year in time for the holiday season. Bowflex is also going to be rebranding, he added.
Barr and his team have embraced connected fitness with their JRNY app. Connected fitness uses a mix of hardware as well as software and online content, in this case the JRNY app. The app is available for a monthly or yearly fee.
Members can stream trainer-led classes and videos, take virtual-reality style bike rides or runs through global landscapes, use personalized workouts tailored to challenge the user or use motion tracking to measure free weight reps and form in real time.
The app had 508,000 members as of March 31, a 56 percent increase in members compared with the fourth quarter of the previous year. Many of those subscribers use the app on their mobile devices rather than on the machines that have built-in screens, said Barr.
In the call, Barr said that membership numbers had stagnated, but most new members come onto the app when they buy equipment. So, memberships generally increase with sales around the holidays and new year.
For its fourth quarter, Nautilus reported net sales of $68.4 million, down 42.9 percent compared with the same quarter in 2022. The company said the drop was largely due to demand returning to a pre-pandemic normal.
The fitness company reported its operating expenses declined to $28.2 million in the fourth quarter, compared with $42.9 million the year before. There was less money spent on media, personnel, contracted services and marketing. Specifically, advertising fell from $15.2 million in 2022 to $4.9 million in 2023. The company announced in February that it’d be laying off 15 percent of its staff as a cost-saving measure.
Nautilus reported a net loss of $20.9 million in its fourth quarter, compared with a net loss of $18.2 million in the same period the year prior.
Nautilus trades as NLS on the New York Stock Exchange. It closed Wednesday at $1.30 per share, compared with $1.16 per share on Tuesday. In early 2021, it traded at as much as $24.11 per share. Though historically it has traded even higher at more than $40 per share in the early 2000s.