Shares of Nautilus (NLS -3.31%) have plunged today, down by 16% as of 12:20 p.m. EDT, after the company reported first-quarter earnings. The maker of exercise equipment swung to a profit but warned that its commercial business was struggling due to widespread gym closures stemming from the COVID-19 pandemic.
Revenue in the first quarter increased 11% to $93.7 million, which led to net income from continuing operations of $2.3 million, or $0.08 per share. Analysts had been modeling for $93.8 million in sales and an adjusted net loss per share of $0.08. Stay-at-home orders related to the coronavirus outbreak boosted demand among consumers looking to exercise at home, but supply chain disruptions in China presented challenges in meeting that demand.
"The continued momentum of our new connected fitness products and technology, as well as the strategic and operational changes instituted in the latter half of 2019 put us on track to deliver year-over-year improvement," CEO Jim Barr said in a statement. "However, when COVID-19 pandemic stay-at-home orders hit the last few weeks of the quarter, it was the agility and strong execution of the team that allowed us to maximize the opportunity provided by the surge in demand for at-home fitness products."
Gym closures have impacted the commercial side of the business, Barr added, though Nautilus enjoyed strong demand for its Bowflex products in its retail segment. Even though many retailers are closed at the moment, sales through e-commerce and curbside pickup services have increased. The company is now trying to get over supply chain hurdles in order to reduce its sales backlog.
Nautilus reiterated its capital expenditure guidance of $8 million to $10 million for 2020.