Peloton Shares Fall After Publishing Disappointing Results

Bicycle maker Peloton said its fourth-quarter loss increased as revenue growth slowed dramatically and costs associated with recalling its treadmills rose, which was reflected in the decline of its share by 6% in the extended trading, after it fell by 15% at the beginning of the trading round.

Peloton warned that its profits would be hit in the short term because it slashed the prices of its original Bike by about 20%, as well as the company redirecting its business towards sales of treadmills, which are less profitable than sales of its bikes.

Peloton posted a net loss of $313.2 million, or $1.05 per share, for the quarter ended June 30, while last year it posted net income of $89.1 million, or 27 cents per share, but its loss this quarter was more than analysts’ expectations, which was 45 cents per share. As for revenue, Peloton’s total revenue grew 54 percent to $936.9 million, from $607.1 million a year earlier, topping the $927.2 million expected by Refinitiv analysts.

Peloton expects to raise $800 million in sales during its first fiscal quarter, with analysts expecting $1.01 billion in revenue. But it’s worth noting that Wall Street didn’t know the company would cut the bike’s price by 20%.

As for the full year, Peloton predicts sales of $5.4 billion, higher than analysts’ expectations of only $5.27 billion, and the company added that it will return to profit by fiscal 2023.

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