“The results for the fourth quarter of 2018 did not meet our expectations or the guidance we had provided during our October 2018 update,” said Nautilus CEO Bruce Cazenave in a statement.
Disappointed investors sent shares in the Vancouver-based company down nearly 38.9% to $7.20 in the premarket session.
The company said that significantly stronger sales were expected in the fourth quarter from the direct-to-consumer segment, driven by the introduction of a new product, the digital platform Max Intelligence.
“We expect that as consumers are further exposed to Max Intelligence, this unique product will help to accelerate sales across a number of our products and brands in 2019,” said Cazenave.
The company said it expected revenue to come in between $114 to $116 million for the fourth quarter. In 2017, the company reported fourth-quarter revenue of $127.8 million, which was 1.6 higher than the same period a year ago.
Direct sales for the fourth quarter came in around $50 million, whereas it was $71.6 million in the fourth quarter a year ago.
The company is expecting to clock $395 to $397 million in revenue for the full year.
Earnings per share amounted to $0.04 to $0.05 per share for the fourth quarter of 2018.
On a brighter note, the company said it expected its fourth-quarter retail sales of $64 million to have bested the $55 million posted in fourth-quarter 2017, by 16%.
“While the overall results for the quarter are disappointing,” said Cazenave “they are not illustrative of the underlying strengths of the business.”
The company said it had a “healthy new product introduction schedule” for 2019 and had secured “strategic investments with key partners” which would boost its digital offerings.
Nautilus offers cardio products, treadmills, elliptical machines, stationary bikes, strength products, home gyms, dumbbells and weight benches primarily under its Nautilus, Bowflex, Octane Fitness, Schwinn, and Universal brands. It also engages in licensing its popular brands.
Contact Uttara Choudhury at [email protected]