The operating margin of Brunswick Corporation's fitness division, which is led by Life Fitness, fell to 8.0 percent in the third quarter ended Sept. 30 from 12.2 percent in the same period a year ago. It remained depressed also for the first nine months of the year, down to 7.7 percent from 10.7 percent in the year-ago period.
The division's revenues rose by 6 percent to $685.7 million in the first nine months, but they were up by only 2 percent to $237.6 million in the latest quarter, and they were flat excluding last year's acquisition of ICG. Representing 47 percent of the revenues, international sales decreased by one percent. The management cited “a more challenging market environment” that affected sales volumes as well as margins, adding that the softness of the U.S. and European market was partially offset by strength in Asia.
A higher increase of 7 percent in the bigger marine engine segment helped the group to record overall sales increases of 4 percent in the quarter and 7 percent for the nine months, generating an improved operating margin of 11.2 percent for both periods. The management's guidance calls for a similar growth rate for the year as a whole, accompanied by a slight decrease in operating margins.
After restructuring, exit and integration charges of $6.8 million, the group's net profit declined to $79.0 million on sales of $1,141.5 million in the quarter, as compared to net income of $85.3 million in the year-ago period.