Fitness financials: Nautilus shares rise on analyst upgrade, plus Town Sports, Costco, Wal-Mart

Nautilus shares rise on analyst upgrade
Shares of Nautilus (NYSE: NLS) increased Jan. 8 after an analyst upgraded the stock, saying the company is less likely to miss sales estimates for the fourth quarter.

Analyst Eric Wold of Merriman Curhan Ford upgraded Nautilus stock to “neutral,” or “hold,” from “sell,” saying in a client note that he expects the company to meet its guidance for the fourth quarter of 2006 and report strong sales for the quarter. The brokerage surveyed 33 retail stores, and 97 percent responded that holiday sales were fair to very good.

Despite the upgrade, Wold noted long-term concerns about Nautilus, saying the company’s efforts to sell its products in big-box stores put other sales at specialty shops at risk. He said his long-term view of the company is negative. He added that Nautilus’ earnings in the first three quarters of 2006 were also “very poor.”

Nautilus stock rose $1.52, or 11 percent, to $15.50 in midday New York Stock Exchange trading on Jan. 8. Shares have traded between $11.10 and $21.21 over the past 52 weeks.

Nautilus will announce 2006 fourth-quarter results on Feb. 7.

Town Sports ups ’06 guidance, offers ’07 outlook
Town Sports International (Nasdaq: CLUB) reported that it expects its 2006 results to come in at the high end of its prior forecast, and issued 2007 guidance.

Previously, the company forecasted 2006 earnings between $0.47 and $0.52, adjusted for early debt extinguishment charges, and revenue between $431 million and $433 million, helped by club membership and ancillary revenue growth.

Based upon the current business environment and current trends in the marketplace, Town Sports said it currently expects revenues for 2007 to be in the range of $475 million to $480 million, a 10 percent to 11 percent growth over 2006.

It also said it expects calendar 2007 net income to be in the range of $19 million to $20 million and earnings per share to be in the range of $0.73 to $0.76.

Town Sports said it anticipates opening approximately 15 new clubs in 2007, up from preliminary guidance given on its third quarter 2006 conference call of 10 to 12 new clubs.

Costco reports December sales results
Costco Wholesale (Nasdaq: COST) reported net sales of $7.24 billion for the month of December, the five weeks ended Dec. 31, 2006, an increase of 14 percent from $6.37 billion in the same five-week period last year. Same-store sales rose a better-than-expected 9 percent at stores opened at least a year.

Wal-Mart posts 8.8 percent increase in December sales
Wal-Mart Stores (NYSE: WMT) said total sales for the month of December were $43.996 billion, up 8.8 percent over the previous year’s $40.450 billion. Same-store sales for the five-week period were 1.6 percent compared to 2.5 percent the year before.

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