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Peloton Interactive Inc (NASDAQ: PTON) on Thursday forecasted its first-quarter revenue below Wall Street estimates, suggesting that its recently launched turnaround efforts will take more time to revive the declining sales of its fitness equipment.
Shares of the exercise bike maker tumbled almost 21% to $10.66, adding to a nearly 70% drop so far this year.
Although Peloton’s exercise bikes and treadmills were all the rage among fitness enthusiasts during COVID-19 lockdowns, the demand for its products plunged as gyms reopened following vaccinations and reopening.
Chief Executive Barry McCarthy has focused on cost cuts through layoffs and store closures, outsourcing manufacturing and slimmer inventories since taking over in February.
Peloton on Wednesday said it would start selling its exercise bike and other fitness accessories through Amazon.com Inc (NASDAQ: AMZN) in the United States, fueling a 20% jump in shares.
The company expects first-quarter sales to be in the range of $625 million to $650 million, below Wall Street analysts’ average estimate of $783.28 million.
The restructuring efforts resulted in operating expenses doubling to $1.17 billion in the three months to June 30.
In a letter to shareholders, McCarthy said the fourth quarter had been the high water mark for write-offs and restructuring charges.
He also said the company is aiming to reach break-even cash flow on a quarterly basis in the second half of its fiscal year 2023.
Peloton’s net loss widened in the three months ended June 30 to $1.24 billion, or $3.68 per share, from a loss of $313.2 million, or $1.05 a share, a year earlier.
Sales fell about 28% to $678.7 million.
Picture Credit: Wired
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