When Peloton’s instructor said to “break it down,” we’re not sure he meant the stock. But that’s what it did today, falling to new lows after reporting weak results. 👎
The company’s fourth-quarter loss per share of $0.68 on revenues of $642.1 million was mixed vs. the $0.38 loss on revenues of $639.9 million expected.
Summer is typically slow for Peloton and other fitness retailers, so much so that CEO Barry McCarthy warned in May that this quarter would be highly challenging. He even projected a decline in subscribers. But the slowdown appears slightly worse than many anticipated. 😬
Its 3.08 million subscribers were up 4% YoY but down by 29,000 quarter over quarter. The company’s Bike Post recall contributed to greater-than-expected churn amid its seasonally-anticipated slowdown in hardware sales. The company estimates that 15,000 to 20,000 people paused their monthly subscriptions while waiting to replace their bike seats, pushing churn up to 1.4%. 🔺
The two factors combined were a tough cocktail for investors to swallow. And while the company experienced positive free cash flow on an adjusted basis, executives don’t expect that to continue in the coming two quarters due to various factors.
In the long term, Peloton continues to explore growth opportunities ranging from B2B partnerships to offering individuals a rental program and “certified refurbished” purchase option. It says the efforts are showing promise, but investors remain unconvinced that it can successfully become the “fitness company for all” it’s trying to be. 🧐
Time will tell, as always. But for now, $PTON shares are making new all-time lows after breaking through their Q4 and year-to-date lows. 📉
