A Tough Time for Peloton

Peloton is reportedly planning to cut 41% of its sales and marketing staff, according to a report first released by Business Insider. Peloton has even supposedly given its pet project a name: Project Fuel.

According to Protocol, Peloton will let go of employees working in 15 retail stores and on the company’s e-commerce biz. The company will reportedly cut “low performers” from its recent talent review. With that being said, Peloton is also hiring a consulting firm to review its cost structure.

These layoffs are a decisive turnaround for the embattled at-home fitness company, which grew tremendously during the pandemic. 🚲 Peloton hired more than 3,000 employees in the thick of the pandemic, which spoke to unprecedented growth. Peloton now refers to that growth as “undisciplined.”

“Undisciplined growth” is one of the leading reasons why the company decided to implement a hiring freeze in November, which also came with a reduction in outlook. Peloton cut its FY 2022 outlook by nearly a billion dollars — now Peloton says that it doesn’t expect to be EBITDA profitable until FY 2023. 😬

Leading up to the stock price’s cratering last year, insiders sold more than $500 milion in Peloton stock. Some users on Stocktwits and on Twitter did not shy away from scrutinizing leadership for jumping ship with riches, leaving hundreds of employees in the dust with lost livelihoods. 

Ultimately, layoffs = cost cutting = more profits. That’s why the news of the layoffs excited investors today, sending shares of $PTON rising by 5.3%. Although investors are jazzed, Peloton’s employees indicate that the company’s morale is extremely low — that’s a far cry from where morale supposedly was this time last year. 

$PTON is down 80% in the past year. As of today, it’s valued at $10.4 billion.

After a years-long wait, fintech giant SoFi has finally secured approval from the Office of the Comptroller of the Currency (OCC) and the Federal Reserve to become a bank holding company. 🥳

SoFi acquired a community bank last February in a bid to accelerate the process. The bank, Golden Pacific Bancorp, will operate as the parent company for SoFi Bank. SoFi will immediately see improved economics and fewer middlemen. That’s one reason investors are jazzed about this announcement — shares rose more than 13% since afterhours yesterday. 👏

The approval of the bank charter will also bring on more regulatory oversight, but SoFi will make up for that with the flexibility to issue loans directly and reduce accessory costs. SoFi, already a giant in the student loans and refi business, has turned its attention to products catering to HENRYs (High Earning, Not Rich Yet). In the last year, the company has launched a mortgage business in more than a dozen countries — SoFi also added a credit product in the form of the SoFi 2% Credit Card. 💰

SoFi stock has fallen 13% YTD (and 39% in the past year.) However, with analysts forecasting a five-year revenue growth rate of 28%, you might not have to worry. In fact, with growth of +28%, there might be a lot to look forward to. 😁

$SOFI stock closed at $13.71 (+13.68%) today.

Proctor & Gamble reported earnings today and beat estimates. Unfortunately, the company’s guidance suggests price hikes are here to stay (thanks inflation!)

P&G posted EPS of $1.66, beating estimates of $1.65. The company also beat on revenue — P&G reported $20.95 billion in revenue compared to estimates of $20.34 billion. Net sales saw a 6% boost.

P&G can thank the pandemic for some of its stronger segments, like fabric and home-care. Demand for cleaning products has generally increased post-pandemic, and that demand pushed P&G’s sales +8% for products like Mr. Clean or Febreze. The company also experienced a +20% boost for products like Vicks and ZzzQuil during cold/flu season. 🤒

These figures demonstrate a strong performance, but P&G’s earnings report warns of continued price increases in 2022. More specifically, P&G expects to increase the price of products like Tide Detergent and Downy Dryer Sheets in late February. Personal hygiene products will also see price increases come Spring. Lastly, the company’s strong performance in sales for razors, feminine products, diapers, and toilet paper was largely due to price hikes. 🤷

$PG traded 3.36% higher today.