Benzinga | Nov 10, 2021 10:13AM EST

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

* Nautilus Inc (NYSE: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.