Peloton Overhaul Outlook Tops Estimates
Peloton shares surged up to 12 percent after the company released a stronger-than-expected holiday quarter forecast. The fitness firm is working to reposition itself as a complete wellness brand and recover profitability following its first major hardware update in several years.
Peloton anticipates revenue of between $665 million and $685 million for the three-month period ending in December, surpassing Wall Street’s projection of roughly $661 million for its fiscal second quarter.
“Our continued momentum on bottom line performance sets the stage for improvements on the top line as we progress through the fiscal year, fuelled by our commitment to innovation and growing the Peloton community,” said Chief Executive Officer Peter Stern.
He expressed confidence in the company’s ability to execute its “strategic plan, return Peloton to profitable growth, and extend Peloton’s lead in connected fitness and wellness.”
Earlier on Thursday, Peloton announced a recall of about 877,800 units of its premium Bike+ model in the United States and Canada after reports that some seat posts snapped, resulting in rider falls. The recall cost the company $13.5 million in the first quarter.
Peloton shares closed at $6.71 in New York, marking a 22.9 percent decline for the year through Thursday’s close.
Author’s Summary
Peloton beat market expectations with a strong holiday forecast, despite product recall costs and year-to-date share declines, aiming to reaffirm its position in the wellness industry.