Economic Trends: Subdued yet moderate growth indicated
By Therese Iknoian, HFB Industry Ambassador
For our fitness industry trade show, the Health+Fitness Business Expo, we’ll be running periodic posts about that industry and topics of interest to it, done by our new fitness industry ambassador, Therese Iknoian. Of course, we expect those will also be of interest to bike retailers, many of whom also sell fitness gear alongside bikes. Therese expects to talk about product trends, economic impacts, and fitness statistics or news. Here’s another in our continuing series. You can find past columns
Everybody wants to know where the economy is headed to help them plan their business, their inventory and their future. Recent reports from inside and outside the sports industries indicate that recovery is beginning, albeit with only moderate growth – growth however that is expected to accelerate in 2013.
“While several forecasts have weakened slightly, there are also some signs of improvement,” said Shawn DuBravac, chief economist at the Consumer Electronics Association and outlook survey chairman for the National Association of Business Economics (NABE). “Expectations for housing, vehicle sales, employment, and industrial production all improved in the current survey. However, expectations for overall economic growth as measured by inflation-adjusted gross domestic product,
business investment, and consumer spending remain below historical norms.”
Actually other economists have seen a slight rise in the first part of 2012 in consumer spending. Some add that they don’t believe consumers can continue to keep that up. But others, notably those surveyed for NABE, forecast small but continued increases – 2.2 percent this year and 2.5 percent into next year – with a drop in unemployment. Plus,
corporate profits are expected to rise – 5 percent this year and 6.3 percent in 2013.
Among the public companies in the fitness industry, reports just out covering the first quarter of 2012 are also mixed:
• Johnson Health Tech, parent of Matrix Fitness, Vision Fitness, AFG, Horizon Fitness and LIVESTRONG® by Johnson, announced its first-quarter sales results ending March 31, 2012, revealing a 23 percent gain in global retail sales over the corresponding 2011 time period. Overall worldwide sales for Q1 rose by 22 percent.
• Nautilus reported nearly flat retail sales — $16.6 million vs. $17 million a year ago — but higher income and overall revenue. Third-quarter revenue rose 6.1 percent to $51.3 million compared to last year’s $48.3 million.
• Precor, the fitness segment in the Amer Sports group, reported a gain of 5 percent in revenues for the first quarter of 2012 (EUR 59.7 million). That was attributed mostly to an increase in commercial sales, while retail sales dropped 7 percent.
• Cybex said it saw higher sales and profit for the first quarter, but as usual, noted the coming two quarters would be slow due to the off-season. Sales in the last quarter rose just over 20 percent (reaching $37.3 million, up from $31 million a year earlier).
• Life Fitness, part of the Brunswick group, reported its fitness sales increased less than 1 percent, hitting $157.1 million, while international sales dropped in the double digits (13 percent), although still accounting for nearly half of total sales.
Encouraging figures about inactivity combined with these reports to indicate that perhaps now is the time to launch new and innovative products that will be ready to go for 2013. Manufacturers’ sales showed an uptick in sales in 2010 after two down years, per the Sporting Goods Manufacturers Association (SGMA). We expect when this year’s report covering 2011 is released that the trend will continue.
In ny role working with the Health & Fitness Business Expo as an ambassador to the industry, I’d like to hear from all of you in the industry at any time. Ideas? Suggestions? Frustrations? Curiosity? Just want to chat? Drop a note or give a ring. I’m here. Reach me at email@example.com or by calling 530-268-8294.