Peloton Shares Climb on Strong Holiday Quarter Forecast
Peloton's shares increased by up to 12% after the company announced a holiday quarter revenue forecast that exceeded expectations. The fitness brand is working to reposition itself as a comprehensive wellness company and aims to return to profitability following its first hardware update in several years.
Revenue Outlook Exceeds Wall Street Estimates
Peloton projected its revenue for the three-month period ending in December to be between $665 million and $685 million. This surpasses Wall Street’s estimate of approximately $661 million for its fiscal second quarter.
CEO Comments on Strategic Progress
"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 CEO Peter Stern.
He expressed confidence in executing the company's strategic plan to "return Peloton to profitable growth, and extend Peloton’s lead in connected fitness and wellness."
Recall of Bike+ Units Impact
Earlier on Thursday, Peloton announced a recall affecting approximately 877,800 units of its high-end Bike+ in the US and Canada following incidents where seat posts broke, causing riders to fall. This recall resulted in a cost of $13.5 million in the first quarter.
Stock Performance
Peloton shares closed at $6.71 on the New York Stock Exchange but have fallen 22.9% year-to-date through Thursday’s close.
Summary: Peloton's upbeat revenue forecast reflects strategic efforts to regain profitability despite a costly Bike+ recall, boosting investor confidence in the connected fitness brand's future growth.