Precor parent sales slow, expects fitness growth

Precor parent Amer Group released its second quarter and half-year earnings statement and it seems that sales of sports equipment have been slow for the Finnish company, although the acquisition of Precor (completed late last fall) increased net sales by Euro 85.8 million
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Precor parent Amer Group released its second quarter and half-year earnings statement and it seems that sales of sports equipment have been slow for the Finnish company, although the acquisition of Precor (completed late last fall) increased net sales by Euro 85.8 million.

For the period of January to June 2003, Precor's net sales showed a pro forma decrease of Euro 15 million from its sales for the first half of 2002 of Euro 100.7 million; operating profit for the first six months of 2003 was Euro 11.8 million compared to 2002's Euro 14.0 million. Operating profit for the second quarter alone of 2003 was Euro 2.9 million. (Note that full year 2002 operating profit was Euro 6.3 million.)

According to the Amer Group statement, the fitness equipment division's net sales and operating profit (that would be Precor) in local currencies were similar to last year's level; sales of treadmills and cycles grew, whereas sales of elliptical cross-trainers declined slightly. "North American commercial and consumer markets appear to be cooling," the company said. "Major club organizations are holding off on purchases, and consumers are similarly cautious…. Despite general uncertainty, the fitness sector as a whole is expected to continue growing. Further growth is also anticipated in the popularity of elliptical fitness equipment." Amer said it believes that Precor has good opportunities for growth, especially outside North America.

For the period January to June 2003, Amer Group's net company sales were Euro 535.7 million, compared to last year's Euro 552.2 million. Operating profit was Euro 24.8 million, compared to 2002's Euro 38.5 million. Amer Group's net sales for 2003 as a whole are expected to be similar to 2002's with operating profit expected to be around Euro 70 million to 80 million, compared to 2002's Euro 103.0 million.

For the remainder of this year, the company said it does not expect the demand for sports equipment to recover significantly. Despite the slowing of sales worldwide, Amer Group has once again stated its goal of becoming the world's No. 1 sports equipment company.

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