Nautilus Q2 Earnings Miss Estimates On Shipping Constraints, Notes Margin Pressure

Nautilus Inc NLS reported a second-quarter FY22 sales decline of 11.2% year-on-year, to $137.96 million, missing the analyst consensus of $152.73 million.
The sales decline was driven primarily by lower Direct sales and shipping constraints. Direct segment sales fell 38.1% Y/Y, while retail segment sales increased 6.4%.
Adjusted EPS of $0.03 missed the analyst consensus of $0.10.
Gross profit decreased 38% Y/Y to $42.1 million, with gross margin contracting 1320 basis points to 30.5%.
Operating expenses expense increased 83.8% Y/Y to $44 million. The operating loss for the quarter was $(1.95) million versus operating income of $43.99 million last year.
The company held $21.5 million in cash and equivalents as of September 30, 2021.
"While our results were affected by global shipping constraints, we continued to advance our supply chain process, including the opening of a new distribution center, that has allowed us to work down backlog and improve our inventory position relative to last year," said CEO Jim Barr.
Outlook: Nautilus sees 2H FY22 sales of $290 million - $320 million. It expects a loss in the back half with negative operating margins in the mid-teens and global supply chain challenges to continue pressuring gross margins in the second half.
Price Action: NLS shares traded lower by 0.72% at $9.34 on the last check Wednesday.