It appears that even a Taiwan-based company like Johnson Health Tech can see the upside from the SCOTUS ruling this past spring that reversed the Trump Administration’s IEEPA tariffs that were imposed on goods imported to the U.S. from over 60 trading partner countries. While a number of U.S.-based companies in the active lifestyle market have seen benefits this year from tariff rebates running into the millions of dollars due to the SCOTUS ruling, the Q2 earnings report from the fitness equipment maker may be one of the biggest examples of spreading the wealth back overseas from subsidiaries in the U.S.
Johnson Health Tech .Co., Ltd. (Group), owner of the BowFlex, Fujiiryoki, Horizon Fitness, Johnson Fitness & Wellness, JRNY, Matrix, Schwinn, Synca Wellness, and Vision Fitness brands, was able to tap into tariffs rebates of ~$42 million to boost margins and pad the bottom line.
Johnson Health Tech reports in the New Taiwan dollar (NT$) currency. Conversions to the U.S. dollar ($) currency was calculated by SGB Executive at the average rate of 1 NT$ to 0.0316 U.S. dollars as published by the Federal Reserve of St. Louis for both the second quarter and the month of July.
The company reported second quarter revenue grew 7.8 percent to NT$13.3 billion (~$419 mm), compared to NT$12.3 billion in the prior-year Q2 period. The Home segment saw 80 percent of its revenue come from the U.S., while the Commercial segment derived 40 percent of revenue from the U.S. Europe added another nearly 40 percent.
Planet Fitness accounts for about 10 percent of revenue, with orders currently better than last year and no downward revision noted, despite the company’s issues. There were questions about the business with Planet Fitness as it goes through a series of issues that have tanked its share price. Law firms smell blood in the water and are actively looking to build a case for fraud against the company. But management said that H1 orders from Planet Fitness “grew significantly” and the full-year outlook has not been revised. Currently, about 70 percent of the company’s 2,900 locations’ purchase are for replacement equipment.
Overall, North America accounted for 45 percent of revenue, Europe tallied 28 percent of revenue, Latin America delivered 7 percent, while Asia and others came in at 20 percent of the total.
Profitability & Expenses
Gross margin amounted to 62.8 percent of revenue in Q2, reportedly driven by a that one-time U.S. tariff refund of approximately $42 million. Excluding this one-time rebate, gross margin was 53.1 percent, up 180 basis points from 51.3 percent in the first quarter. Management attributed the gross margin improvement to four key factors, notably lower tariff costs, the ramp-up of a Vietnam plant, a weaker New Taiwan dollar, and across-the-board price increases, with shipments already reflecting the adjusted prices. The price increases were detailed at 10 percent to 15 percent for the Home segment and 3 percent to 7 percent for the Commercial segment.
When asked if these price hikes amidst the tariff refunds might trigger customer backlash, the company responded that refunds only cover illegally imposed tariffs, and overall tariffs continue to rise — a situation customers understand.
Net income was NT$969.2 million (~$31 mm) compared to NT$111.9 million in the year-ago quarter. Diluted earnings per share from continuing operations was NT$3.19 compared to NT$0.37 a year ago.
Second quarter EPS reached NT$3.19, or NT$1.29 per share excluding the tariff benefit and a NT$530 million (~$17 million) settlement with the U.S. Consumer Product Safety Commission (CPSC). The CPSC settlement was said to concern delayed reporting disputes for products phased out between 2018 and 2022.
The EPS number was seen as a big win against the NT$0.37 delivered in Q2 2025.
Outlook
Looking to H2, Group management expects revenue to continue with double-digit growth, with July revenue reported up over 36 percent year-over-year (y/y) to NT$4.58 billion (~$145 mm), indicating peak-season momentum. The increase was a significant acceleration from the 14 percent y/y growth in June and the 2 percent y/y growth in May 2026
For full-year 2026, revenue growth target is at least 10 percent, with Commercial segment growing 15 percent to 20 percent and Home segment revenues expected to grow faster than the Commercial business if advertising ROI meets expectations, driven by new BowFlex products and advertising.
Gross margin is expected to improve sequentially, reaching 54 percent in Q4.
Full-year expense ratio is maintained at 43 percent to 45 percent, and the tax rate is forecast at ~30 percent.
The second Vietnam plant, ceremony pictured below, was completed in early August and machinery has already been installed and trial runs are said to be underway. Capacity is expected to gradually increase to support revenue needs through 2028. The new plant is nearly double the size of the first factory in Vietnam. Management did point out potential risks remain with continued U.S. tariff policy changes and intensified Home segment promotional competition.
Current production capacity is allocated at 50 percent China, 30 percent Vietnam, and 20 percent Taiwan. Going forward, the company said Vietnam’s share will continue to increase, while China’s absolute capacity remains unchanged. Still, the company is expected to see benefit from the continued Vietnam build-out as manufacturing costs there are said to be 10 percent to 15 percent lower than China and enjoy a 7.5 percent tariff advantage.
Management feels the margins can only improve as the Vietnam plant’s learning curve matures, suppliers stabilize, and manufacturing optimizes, gross margin has upside potential.
Company Chairman Luo Kunquan stated in early August that the Group has set long-term targets of NT$100 billion in revenue by 2028 and approximately NT$300 billion by 2040, and is currently evaluating the establishment of new production bases in India, Indonesia, and Hungary to support the next phase of operational growth.
Images courtesy Johnson Health Tech
