The company posted a wider-than- expected loss for its fiscal first quarter, as a steep decline in connected fitness products revenue overshadowed an increase in subscription revenue
The company's shares fell before the market opened. The stock of Peloton has lost 75% of its value this year.
The fitness device maker did better than Wall Street estimated.
The revenue was down compared to the same time last year. The revenue outlook for the holiday quarter, between $700 million and $725 million, would be a quarter-to-quarter increase, but it is below analysts' estimates.
The company believes that demand for Connected Fitness hardware is likely to remain challenged.
Barry McCarthy said in an earnings announcement Thursday that the company is making progress. Growth in at- home exercise was stimulated by the end of the Pandemic Era. Significant leadership changes, mass layoffs and a new business strategy were undertaken this year. The company has moved beyond its direct-to- consumer roots into deals with other retailers and into a model that emphasizes subscriptions.
McCarthy said the ship is turning.
The co-founder and former CEO, John Foley, left his board chair position in September along with his chief legal officer, Hisao Kushi. When McCarthy took over as CEO, he stepped down from his position.
McCarthy has been in charge of the company's efforts to turn around. 500 jobs were cut in early October. New initiatives to sell more bikes and increase the number of digital subscribers were part of the cost-cutting effort.
The amount of subscription revenue went up from last year. Revenue from connected fitness products decreased. The gross margin was in line with expectations and improved from the previous quarter.
The total number of members at Peloton was up from last year but down from the previous quarter. McCarthy said that the company would like to reach 100 million members.
The company's free cash flow was negative $246 million in the most recent quarter, compared with negative $651.9 million in the year-ago period. The company hopes to be break-even by the end of the fiscal year.
A recent initiative by McCarthy was the sale of bikes and treads through Amazon and Dick's. The company started certifying pre-owned bikes. The company is going to put bikes in the fitness centers of over 5,000 hotels.
The $3,195 rowing machine was released in the first quarter. The company extended its return period for its recalled treadmil l, which was recalled due to multiple user injuries and a death.
The company had $199 million in recall reserves in the first quarter.
All Rights Reserved © 2024
