NLS - Nautilus stock sails higher on aggressive inventory action upbeat guidance

2023-05-23 16:30:21 ET

Nautilus ( NYSE: NLS ) shares surged to a double-digit percentage gain in post-market trading on Tuesday after topping Q4 sales expectations.

For the fiscal fourth quarter , the fitness solutions company reported a $0.66 per share loss on $68.4M in revenue. Analysts had anticipated a $0.51 per share loss on $57.67M in revenue for the quarter.

Management credited resilience in direct to consumer demand for the sales results while inventory levels were cut significantly. The company exited the quarter with $46.6M in inventory, down 58% from the $111.2M in revenue on hand as of March 31, 2022.

“We took deliberate steps throughout fiscal 2023 that enabled us to exit the year with a significantly improved inventory position and streamlined cost structure. Subsequent to quarter end, we further strengthened our balance sheet and monetized the value of certain non-core assets, enhancing our ability to manage through the current environment. These actions, coupled with our asset-light, semi-variable operating model, position us well to drive future profitable growth,” CEO Jim Barr said. “The continued demand we see for our equipment in our Direct business gives us conviction in the sustainability of the shift to at-home fitness. Furthermore, we are capitalizing on consumer preferences for connected fitness thanks to our investments in our differentiated digital offering. We will continue to take the necessary actions that best position us to operate more efficiently, drive free cash flow, and return to profitability.”

Moving forward into fiscal 2024, the Washington-based company expects net revenue to be in the range of $270M to $300M, suggesting upside to the $275.38M Street consensus. Revenue growth is due to be weighted toward the back half of 2024. The company forecasts full year adjusted EBITDA of between a $15M loss and break-even as it adds 625,000 JRNY members.

Shares of Nautilus ( NLS ) jumped over 12% shortly after the print before tempering gains to a more modest percentage as the extended session progressed.

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