Peloton (PTON) released its recent quarter report on Wednesday and shares fell by more than 26 percent in pre-market trading. The bike and treadmill company said its slowdown in sales was a result of people spending more on travel as well as experiences. Although a fall in sales is a general trend with exercise equipment makers and some retailers during this quarter, Peloton said that the fall in sales in May and June was much more than the company’s expectations.
The connected fitness company posted a loss that was higher than estimates. But it posted higher than expected sales. Peloton also said that a recall of its bike seat had impacted its monthly memberships as consumers did not renew their memberships at that point in time.
Analysts at Refinitiv expected a 38 percent loss per share but Peloton posted a higher loss of 68 cents per share amounting to a loss of $241.8 million. In 2022, the company posted a loss of $1.26 billion in the same quarter that amounts to $3.72 per share.
Sales dropped to $642.1 million for this quarter when compared with a revenue of $678.7 million in the same quarter, a year earlier. However, sales for this fiscal fourth quarter were higher than analysts’ estimate of $639.9 million, according to Refinitiv.
A Refinitiv forecast said that Wall Street analysts had forecast $656 million in revenue for the July to September quarter but Peloton’s expectation for the same quarter is lower at $580 million to $600 million.
Peloton expects to be cash flow positive in the second half of its fiscal year 2024. It is cash flow positive, on an adjusted basis, but will not be able to remain so in the next two quarters due to various factors.
Peloton has been making strategic changes since CEO Barry McCarthy joined the company. On a call with analysts, he said that the stationary bike company’s rebranding message was gaining traction.
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