It turns out exercise buffs don’t necessarily want to spend all their time at home, especially if they don't have to.
Exercise equipment company Nautilus (NLS) said Monday it may sell the struggling business and has hired an adviser to explore “strategic alternatives.”
Nautilus makes the well-known brand of treadmills, exercise bikes and other workout gear that bear the company’s name. It also owns the Bowflex line of home gyms and the Schwinn bicycle brand.
Sales soared early in the pandemic as people adapted to doing more at home. But like Peloton (PTON) and other pandemic-era types of home-fitness products, Nautilus sales stumbled as people returned to normal life.
Revenue fell 11% last year and the Vancouver company reported a loss of $28 million in its fiscal year ended in March, down from a $112 million profit in the prior 12 months.
“Given the state of the at-home fitness ecosystem, we believe the timing is right to comprehensively assess any opportunities that may accelerate our transformation and enhance value for our shareholders, while also benefitting our customers, employees, and vendors,” CEO Jim Barr said in a statement.
Nautilus Shares Down More Than 95%
Nautilus said it has hired investment bank Evercore to help it evaluate next steps. The company insists its future is bright, regardless of the outcome of its strategic review, because of recent investments that could expand Nautilus’ customer base.
Nautilus said it has no timetable for completing its strategic review and won’t comment on developments until the process is complete.
Nautilus's woes closely follow Peloton's: Both companies got caught in the flip back to in-person fitness as gyms reopened and consumers moved away from buying stationary exercise equipment that also relies on subscription services.
Indeed, Nautilus shares have lost almost 95% of their value since the stock peaked above $30 in February 2021. The stock closed Monday at $1.67 after the New York Stock Exchange briefly halted trading in advance of Nautilus’ announcement.
It’s all a significant step down from the pedestal on which analysts, investors and exercise aficionados placed the likes of both Peloton and Nautilus at the end of 2020. That was when staying at home was the new normal and Americans were splurging for the company’s internet-connected stationary bikes affiliated with the likes of megastar Beyoncé.
Peloton Stock Also Has Backpedaled
Back then, Peloton stock was trading at just under $100 a share. As of Monday’s market close the stock was trading at $8.22 a shares, down more than 90% in the past 12 months and well below its 2019 IPO price of $29.75.
Peloton has struggled with deepening losses this year after a pandemic-fueled rise in demand left the company with a glut of unsold bicycles when consumers returned to gyms and outdoor activities.
Peloton announced earlier this month that its co-founder and CEO was stepping down and thousands of jobs would be cut, despite seeing a surge in sales early in the pandemic.
The group's turnaround plans, which include a focus on technology and content and the simplification of its supply chains, took a hit last month after it posted a surprise fourth quarter loss, as well as a big slump in sales.
Peloton also cautioned the conditions in the connected fitness market would remain 'challenging' for the foreseeable future.
