Aiming to strengthen its financial footing and return to profitable growth in FY24, Nautilus lowered its Q4 operating loss by 20 percent to a loss of $17.5 million versus a loss of $21.9 million through numerous cost-cutting measures in recent months. These actions included reducing its workforce by 15 percent in February, selling off its namesake trademark and related licenses for $13 million in April, and shrinking its media/advertising spend by almost $40 million.
The home fitness company is currently forecasting FY24 revenues of $270 to $300 million for the period that commenced on April 1, with H2 sales representing 60 to 65 percent of the total. FY24 adjusted Ebitda is pegged at break-even to a loss of $15 million. Separately, Nautilus is targeting 23 percent growth in its JRNY personalized connected fitness platform to 625,000 from 508,000 on March 31.
In Q4, the net loss widened to $20.9 million from $18.2 million as total revenues declined by 43 percent to $68.4 million from $119.7 million. Gross margin slipped by 90 basis points to 15.6 percent from 17.5 percent due to higher discounting related to its decision to exit Nautilus branded products, higher freight, and logistics costs. Excluding the Nautilus branded products, the gross margin would have risen 280 basis points to 20.3 percent.
The group ended the fiscal year with an improved inventory position, down 58 percent year-over-year to $46.6 million, and a streamlined cost structure. Senior management believes continued fitness equipment demand in its direct segment reflects the sustainability of its shift to at-home fitness with a differentiated digital offering. Direct sales declined by 30 percent year-over-year to $41.6 million but down only 11.7 percent when compared to the same reporting period in 2020. Retail sales, up by 3.6 percent outside the U.S. and Canada, declined by 55.4 percent year-over-year and 28.5 percent from the same 2020 period to $26.2 million.
For the fiscal year, Nautilus reported a 51 percent drop in total sales to $286.8 million from $589.5 million last year but were up 3.3 percent from the same 2020 quarter when excluding the divested Octane brand. The annual operating loss was $93.4 million against a loss of $25.3 million. While the annual net loss came in at $105.4 million versus a loss of $22.4 million, FY gross margin slid by 710 basis points to 18.1 percent from 25.2 percent and was negatively impacted by heavy price discounting, the decision to exit the Nautilus brand, unfavorable logistics costs and higher outbound freight costs.
