Peloton forecasts and statement

Peloton (PTON) reported a worse quarterly loss than analysts expected and also gave a weaker outlook for the current quarter. Investors should not expect profitability from Peloton before 2023.

Peloton shares have fallen 24.8% since the start of 2021 and lost another 6.3% at the post-market on Thursday.

Peloton sells home exercise bikes and treadmills most of the company's revenue comes from these and there is also revenue from subscriptions to its online exercise service.

The COVID-19 pandemic created ideal conditions for Peloton's business, as demand exceeded the company's production capacity and it sold its fitness equipment at high prices.

However, the quarantine restrictions have ended and some of the company's potential audience has returned to gyms, while competition in the market has increased.

On Thursday, Peloton released the results of its fourth financial quarter, which ended on 30 June, and gave an outlook for the first quarter of the new financial year.

Peloton's results and forecasts were disappointing, as the company suffered larger-than-expected losses due to the recall of all of its Tread and Tread+ treadmills and invested in building its plant in the US and building logistics capabilities.

Peloton report

The company reported a loss of $312.2 million, or -$1.05 per share, for the fourth fiscal quarter. Peloton reported total quarterly revenues of $937m.

On the positive side, the growth in subscribers to the Peloton online training service remained positive.

Peloton forecast

The company is forecasting revenues of $800 million in the first quarter of FY2022, down significantly from the fourth quarter and also below the $1 billion estimate that analysts had projected.

Peloton has announced a price reduction for its flagship bike from $1895 to $1495. Peloton's subscription price remains unchanged at $39.99 per month.

At the same time, Peloton's revenue forecast for all of FY2022 is $5.4bn, with the company expecting to reach 3.63 million fitness subscribers by the end of the new fiscal year. Peloton announced this week that its new Peloton Treads will be available in the US, Canada and UK on 30 August and will be available in Germany in autumn 2021.