Sunday, November 28, 2021

Peloton, Once Lockdown Success, Takes a Hit as Shares Fall

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Peloton Interactive Inc. cut its annual revenue forecast by up to $1 billion and lowered its estimates for customers and profit margins.


(CNN) — Peloton investors will have to take an attention class (or several) after its latest earnings report, which saw its shares drop by nearly a third.

The once hot fitness company reported late Thursday that sales of its stationary bikes and treadmills, which account for 60% of its business, fell 17%. Revenue rose just 6% to $805 million, well below analysts’ expectations.

In a call with analysts, Peloton Chief Financial Officer Jill Woodworth said it was “clear that we underestimated the impact of the reopening on our company and the industry as a whole.”

Simply put, more people are returning to brick-and-mortar gyms or buying Peloton rivals.

Becky Fries Rodskog is shown here riding the Peloton exercise bike at her home in San Anselmo, California on April 6, 2020.

Ezra Shaw / Getty Images

Planet Fitness’ stock closed 12% higher on Thursday after reporting a strong earnings report and revealing that its membership levels returned to its pre-pandemic peak of nearly 16 million. Its stock is up 25% for the year.

Peloton’s move in August to slash the price of its lower-end bikes by 20% to $1,495 was also disappointing. Woodworth acknowledged, “While the conversion rate exceeded our forecast due to the price drop, overall traffic did not meet our initial expectations.”


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