Nautilus tries to recover

The company’s new chief executive, Jim Barr, who took his position three months ago, unveiled a new restructuring plan to address the situation. The job cuts announced in July 2019 are progressing and the management expects to save approximately $6 million in workforce and shared support cost reductions in 2020.

The company also re-launched its digital platform under the new JRNY name on Oct. 30, featuring a personalization engine driven by artificial intelligence that suggests customized workouts and adjusts to individual fitness levels. In addition, the company has launched several digitally connected products, including the Bowflex 216 and 116 treadmills, the Schwinn IC4 bike, and the Bowflex C6 bike.

During the quarter, lower revenues from the Bowflex Max Trainer product line hit the Direct segment’s turnover, which fell by 44.1 percent. This line was recently refreshed, adding connected home digital capabilities, and the management believes that the root cause of its sluggish sales was sub-optimal advertising, which resulted in low awareness and insufficient communication of the product’s differentiated digital capabilities. The company reduced advertising expenses in the latest quarter by about 37 percent as it prepared to increase spend on a new advertising campaign in the fourth quarter across TV, social media and other digital platforms. The new campaign is based on extensive consumer insights.

Meanwhile, Nautilus’ retail sales were down by 27.1 percent, which the company blamed on partial shipment delays related to recently imposed tariffs as part of the trade dispute between the U.S. and China, as well as a decline in Bowflex Max Trainer product sales.

Overall, the company incurred a net loss of $10.7 million, against a net income of $4.3 million for the third quarter of 2019.