Peloton Overhaul Outlook Tops Estimates
Peloton shares jumped nearly 12 percent after the company released a stronger-than-expected holiday quarter forecast. The move reflects its ongoing strategy to reinvent itself as a comprehensive wellness brand and restore profitability following its first major hardware update in years.
The company expects revenue between $665 million and $685 million for the quarter ending in December, surpassing Wall Street’s projection of about $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, fueled by our commitment to innovation and growing the Peloton community,” said Chief Executive Officer Peter Stern.
He added that he’s confident in executing the company’s strategic plan, returning Peloton to profitable growth, and extending its lead in connected fitness and wellness.
Product Recall and Market Impact
Earlier on Thursday, Peloton recalled roughly 877,800 units of its high-end Bike+ model sold in the US and Canada after reports of seat post failures that caused riders to fall. The recall generated a $13.5 million expense during the first quarter.
Peloton’s shares closed at $6.71 in New York, marking a 22.9 percent decline for the year through Thursday’s close.
Author Summary
Peloton exceeded revenue forecasts with strong holiday projections but faced costs from a major recall amid efforts to regain profitability and strengthen its wellness positioning.