Peloton Shares Tumble Amid Earnings Report

Peloton Shares Tumble Amid Earnings Report

Peloton (NASDAQ: PTON) reported its fiscal fourth quarter earnings loss on Thursday amid product recalls and declining customer interest. Shares fell 6% during extended trading upon the news.

The fitness company had cautioned that earnings would be affected after it reduced the price of its original Bike machine by approximately 20%. Furthermore, it has begun to steer more towards treadmill sales, which are ultimately less profitable than its cycle machines.

Peloton reported an earnings loss of USD1.05 per share, compared to the expected loss of USD0.45 a share. However, revenue amounted to USD936.9 Million, higher than analysts anticipated USD927.2 Million.

Growth was stunted amid the recall of Peloton’s Tread and Tread+ treadmill products in May as well as the halt of sales of the two machines. A more affordable version of its Tread is scheduled to go on sale by next week. Nevertheless, the company has yet to disclose when it will commence sales of the Tread+.

Moreover, amid the ease in covid restrictions, people are opting to return to gyms or take in-person fitness classes. The company also faces competition from other at-home businesses like Hydrow, Tonal and Lululemon-owned Mirror.

“The past year represented an inflection point for the connected fitness industry, with significant increases in awareness and demand following the onset of the Covid-19 pandemic,” Chief Executive John Foley wrote in a letter to shareholders.

Peloton shares are up 27% since May and the company has a current market cap of USD31.02 Billion.

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