Peloton reports $1.2 billion loss, forecasts further revenue declines

Peloton Interactive (PTON) reported an operating loss of $1.2 billion in its fiscal fourth quarter as revenue came in below Wall Street expectations.

The company said in a release Thursday before the opening bell its fourth quarter revenue totaled $678.7 million, below the $685.9 million analysts had been expecting, according to data from Bloomberg.

Peloton’s loss per share in the fourth quarter, which included $415 million in restructuring charges, totaled $3.68 per share. The company’s adjusted EBITDA loss in the quarter came in at $288.7 million.

“The loss reflects the substantial progress we made this last quarter re-architecting the business to reduce the current and future inventory overhang, converting fixed to variable costs, and addressing numerous supply chain issues,” CEO Barry McCarthy said in a letter to shareholders.

In its first quarter, the company expects revenue to come in between $625-$650 million, indicating an expected decline of 6% over the fourth quarter and 21% from the same period last year. Adjusted EBITDA in Peloton’s first quarter is expected to reflect and adjusted loss of $90-$115 million, compared to the $93.2 million expected by analysts.

“Our Q1 outlook reflects near-term demand weakness associated with our recent hardware price increases as well as typical seasonal demand softness,” McCarthy said in the letter.

People walk past a Peloton store on January 20, 2022 in Coral Gables, Florida. (Photo by Joe Raedle/Getty Images)

The company reported results one day after unveiling a deal to sell its fitness equipment and apparel on Amazon as Peloton continues efforts to turn its business around and regain investor confidence. Peloton’s announcement sent shares of the exercise-bike maker up more than 20% on Wednesday, marking its best day since February.

McCarthy said in Thursday’s letter, “We remain engaged in productive conversations with other prospective retail partners and are hopeful we’ll be able to announce additional partnerships soon.”

The beleaguered company has grappled with waning demand as its fitness equipment falls out of favor after a pandemic surge.

The company has undergone a series of cost-cutting measures this quarter as it looks to revive cash flow, including hundreds of layoffs, closing some of its showrooms, and launching a self-assembled option for the original Peloton Bike.

(This post is breaking. Please check back for updates.)

Alexandra Semenova is a reporter for Yahoo Finance. Follow her on Twitter @alexandraandnyc

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