HomeBusinessPeloton shares drop 25%...

Peloton shares drop 25% after posting wider than expected loss, falling sales

The exterior of a Peloton store is seen on February 05, 2022 in Dusseldorf, Germany. 

Jeremy Moeller | Getty Images

Peloton on Wednesday reported a wider than expected loss and a quarterly drop in new subscribers that it blamed on its recall of its Bike seat post and seasonality, sending shares plunging about 25% in premarket trading.

The company fell short of analysts’ earnings estimates but beat sales expectations.

Here’s how the fitness company did in its fourth fiscal quarter compared with what Wall Street was anticipating, based on a survey of analysts by Refinitiv:

  • Loss per share: 68 cents vs. 38 cents expected
  • Revenue: $642.1 million vs. $639.9 million expected

The company reported a net loss of $241.8 million, or 68 cents per share, for the three-month period that ended June 30, compared with a loss of $1.26 billion, or $3.72 a share, a year earlier. 

Sales dropped to $642.1 million, down $678.7 million a year earlier.

The company’s fiscal fourth quarter, which falls during the summer months, is traditionally slow not just for Peloton but also for other fitness retailers. Consumers have a tendency to pull back on workouts during the season as they travel and take part in other summer plans. 

In May, CEO Barry McCarthy warned the fourth quarter would be among its most challenging from a growth perspective. For the first time, Peloton projected a decline in subscribers.

It ended the quarter with 3.08 million subscribers, up 4% year over year and in line with the company’s expectations. But compared to last quarter, subscribers declined by 29,000. The company attributed the drop to a “seasonal” slowdown in hardware sales and higher than anticipated churn.

“Peloton’s FYQ4 performance is a reminder we operate a seasonal business,” McCarthy wrote in a letter to shareholders.

“The slowdown exceeded our expectations through May and through the first three weeks of June as consumer spending shifted toward travel and experiences,” he wrote. “Then eight weeks ago the trend reversed itself, and we began to see a reacceleration in hardware sales.”

The former Netflix and Spotify executive has spent the last three months focusing on new strategies aimed at getting the fitness company back on a path to growth.

In May, it announced a major rebrand under the guidance of its new chief marketing officer Leslie Berland that positioned Peloton as a fitness company for all that is just as invested in its app as it is its pricey connected fitness products, such as its Bike, Tread and Row. 

It unveiled a series of new pricing tiers for its fitness app that includes an unlimited free membership option (with no credit card required) and levels that cost $12.99 and $24 monthly. The app allows consumers to watch Peloton’s fitness classes and build their own workouts from wherever they are, including their home gym. 

Peloton has also been leaning into its business-to-business strategy to further drive revenue and capture new customers. Earlier this month, it announced the launch of Peloton for Business, which allows companies to offer access to the app and its connected fitness products through its benefits offerings. 

Clients include Volvo, which has Peloton bikes in its company fitness center and offers employees access to the Peloton app, its all access membership and discounts on hardware, including the Bike, Bike+, Tread and Guide. Dropbox offers a similar package to its employees. 

Peloton also launched a new program aimed at partnering with colleges and universities. The new strategy kicked off Tuesday with its announcement that it will be partnering with the University of Michigan to create co-branded Peloton bikes that will be used at the school’s various fitness facilities – and along the sidelines at the school’s football stadium, known as the Big House. 

It also launched a new discounted offering for college students of its “One” tier, which typically costs $12.99 a month but will be cut to $6.99 a month.

Read the full earnings release here.

Source link

Most Popular


Please enter your comment!
Please enter your name here

More from Author

Paparazzo accuses Taylor Swift’s father of assault – BBC News

27 February 2024, 01:43 GMTUpdated 1 hour agoImage source, Getty...

Asia-Pacific stocks trade mixed as Wall Street benchmarks slip from record highs

2 Hours AgoPaytm shares rise after CEO exits payments bank...

Twins get Byron Buxton insurance and righty outfield bat with Manuel Margot trade

FORT MYERS, Fla. — After spending months pursuing various free-agent...

Read Now

Paparazzo accuses Taylor Swift’s father of assault – BBC News

27 February 2024, 01:43 GMTUpdated 1 hour agoImage source, Getty ImagesAustralian police are investigating an allegation by a paparazzo that he was assaulted by Taylor Swift's father.Ben McDonald, 51, accused Scott Swift, 71, of striking his face on a Sydney wharf. He did not need medical...

Asia-Pacific stocks trade mixed as Wall Street benchmarks slip from record highs

2 Hours AgoPaytm shares rise after CEO exits payments bank board Shares of Paytm owner One 97 Communications jumped 5% in early India trading on Tuesday, after the company's chief executive officer stepped down from the board of its payments bank unit.The company said in a...

Sachin Tendulkar’s last WC 100: A memorable milestone in a thrilling tie vs ENG – On This Day, 2011- Republic World

Sachin Tendulkar | Image:APSachin Tendulkar, widely regarded as one of the greatest cricketers of all time, achieved a lifelong dream by lifting the ICC ODI World Cup with India in 2011. His illustrious career continues to be revered and is celebrated as an enduring legacy in...

Twins get Byron Buxton insurance and righty outfield bat with Manuel Margot trade

FORT MYERS, Fla. — After spending months pursuing various free-agent outfielders, from Michael A. Taylor and Kiké Hernández to Adam Duvall and Tommy Pham, the Minnesota Twins ultimately pivoted to the trade market on Monday to find the right-handed bat they’ve been seeking.In a move set...

Kinzinger says Johnson ‘doesn’t have the political acumen’ to cut deal with Dems on Ukraine aid

Former Rep. Adam Kinzinger (R-Ill.) said on Monday he doesn’t think Speaker Mike Johnson (R-La.) has the “political acumen” to cut a deal with Democrats and pass Ukraine aid. “I think, from what I’ve heard, that Speaker Johnson in his heart would pass Ukraine tomorrow if he...

Japan’s Cabinet approves security-clearance bill | NHK WORLD-JAPAN News

A bill to set up a security-clearance system is headed for the Japanese Diet. The...

Chris Gauthier, ‘Once Upon a Time’ and ‘Eureka’ Actor, Dies at 48

Chris Gauthier, a prolific British-born, Canadian actor known for his roles in the television shows “Once Upon a Time” and “Eureka,” died on Friday. He was 48.Tristar Appearances/Event Horizon Talent, which represented Mr. Gauthier, said in a statement that he died “after a brief illness.” His...

Draymond takes full responsibility for Warriors’ loss to Nuggets

Draymond Green was a team-worst minus-23 during the Warriors’ 119-103 loss to the Denver Nuggets on Sunday night at Chase Center, and he took responsibility for his rough performance a few hours later. On the latest “Draymond Green Show” podcast, which was recorded after Sunday's game and...

You could win a once-in-a-lifetime total solar eclipse plane ticket and hotel room in Southwest-Omni sweepstakes

Want to see the total solar eclipse on April 8 from a plane? Enter this sweepstakes for this unique opportunity. Southwest Airlines and Omni Hotels are offering two winners and their guests free air travel and hotel stays in their "Solarbration" experience for the 2024 total...

Stardew Valley Creator Shares Update About Version 1.6 Release

Last month, Stardew Valley creator Eric 'ConcernedApe' Barone mentioned how he was finally done adding "major new content" for the next update. Now, to mark the 8th anniversary of the game, he's finally locked in a release date for Version 1.6. It will be arriving next month...

Wendy Williams’ Son Kevin Hunter Jr. Shares Her Dementia Diagnosis Is Alcohol-Induced – E! Online

Wendy Williams' family is speaking out about her dementia diagnosis. The former talk show host's son Kevin Hunter Jr. shared that doctors believe her cognitive disorder is related to her struggles with alcohol addiction. As he explained on the Feb. 25 installment of the Lifetime documentary Where is Wendy Williams?, the...

Revolutionary face unlock system from Metalenz uses Samsung’s ISOCELL Vizion sensor

Two months ago, Samsung unveiled two new ISOCELL sensors: ISOCELL Vizion 63D and ISOCELL Vizion 931. One of those sensors is now being used in a new and revolutionary 3D face unlock mechanism that Metalenz has developed. This shows the superiority of Samsung's new 3D...