Nautilus, Inc. said sales at its Retail segment were $15.1 million in the first quarter, a decrease of 9.0 percent versus the year-ago quarter. Retail sales were impacted by the continued soft overall retail environment for fitness equipment.
On a conference call with analysyts, Bruce Cazenave, Nautilus CEO, was pleased that Retail gross margin reached 24.9 percent in the quarter, a 110 basis point improvement over the 2012 first quarter. He also said a new line of cardio products for fall delivery has been favorably received by retaiilers. Added Cazenave, At this stage, it is still too early to determine to what degree these initial positive meetings will translate into improved financial performance for retail this year. We do remain confident in the long-term potential for our Retail business.
Operating income for the Retail segment was $2.0 million, compared to $2.3 million in the first quarter last year.
Overall, Nautilus sales grew 15.5 percent to $51.3 million in the same quarter of 2012. Its Direct segments revenues jumped 26.4 percent to $42.6 million, reflecting strong demand for the company’s cardio products, especially its Bowflex Treadclimber.
Companywide gross margin improved 520 basis points to 51.8 percent due to higher gross margins in both the Retail and Direct businesses, as well as the continuing shift of sales to higher margin cardio products in the Direct channel. Income from continuing operations jumped 111.5 percent to $5.5 million, or 18 cents a share, from $2.6 million, or 9 cents, a year ago.
