Nautilus, which recently moved the end of its fiscal year to March 31, reported sales of $184.6 million in the first quarter ended June 30, up by 61.7 percent on the year earlier, as sales growth was driven by continued demand for connected fitness bikes and treadmills and “robust” sales of its SelectTech weights. Excluding the Octane brand, which was sold in October 2020, sales were up by 74.4 percent.

Net profit amounted to $13.9 million, compared to a net loss of $5.1 million in the same period last year. The gross margin decreased by 11.4 percentage points on the year earlier to 30.1 percent, primarily due to: higher landed product costs driven by inflationary price increases in commodities and components, foreign exchange, and elevated transportation costs, Operating income improved by $25.0 million to $17.9 million, or 9.7 percent of revenues, indicating a progress of 4 percentage points excluding increases in product development and advertising expenses.

Sales in the Retail (wholesale) segment grew by 91 percent, or 107 percent excluding Octane, to $120 million, representing the segment’s best quarterly sales performance ever. In this segment, sales of strength products grew by 119.3 percent, led by SelectTech weights and benches and Bowflex home gyms. Cardio sales increased by 83.5 percent, also reaching a new record, driven by connected-fitness bikes and treadmills. The gross margin for the segment decreased by 5.2 percent points to 25.1 percent.

In the Direct segment, revenues increased by 25.7 percent on the year earlier as strength product sales surged by 559.4 percent to a new record, led by SelectTech weights and Bowflex home gyms. Cardio sales declined by 31.1 percent, mainly due to end-of-life product that is no longer available and a decline in sales of the Schwinn C4 and Bowflex C6 bike, partially offset by VeloCore sales. The gross margin for the segment tumbled by 15.9 percentage points to 38.6 percent.

The company expects sales for the second quarter of its fiscal year to rise to between $145 million and $155 million, reflecting an average annual growth rate compared with 2019 of 53 percent to 59 percent.

It has been building up inventory for the holiday season, but the management said the company is focusing production on large-screen embedded products as it is facing shortages of electronic chips and other components.

In tune with its “North Star” strategy of reduced SKUs, Nautilus has ceased production of Nautilus branded and non-core Schwinn products.

Meanwhile, Nautilus continued to offer more differentiatd connected fitness experiences. It signed a licensing agreement with a digital fitness provider, FitOn, to supplement JRNY’s off-product workouts with its library of contents. Users will be able to access FitOn workouts through their Bowflex connected equipment or Nautilus’ JRNY app. The company is targeting 250,000 subscribers connected to its digital JRNY platform by the end of its financial year.