Peloton Interactive Inc (PTON.O) cut its full-year earnings forecast by up to $ 1 billion on Thursday following which stock price drop of more than 30% during the pre-trading time Friday, hitting a 17-month low. Prior to the swoon, Peloton’s share price fell 43% this year.
Home fitness equipment manufacturers have highlighted their efforts to adapt to the post-pandemic economic crisis and lowered their subscriber and profit margin forecasts. “It’s clear that we underestimated the impact of the reopening on our company and the overall industry,” said Jill Woodworth, Peloton’s chief financial officer, in a conference call following the results.
The best-known fitness company for exercise bikes and distance learning courses is expected to generate $ 4.4 billion to $ 4.8 billion in the fiscal year 2022, which ends in June next year. Less than three months ago, the company forecasted sales of $ 5.4 billion.
Increased vaccinations and relaxed restrictions have led people to go to the gym again this year, damaging Peloton’s growth and boosting the earnings of chains like Planet Fitness Inc, their stock hit an all-time high on the news on Thursday.
“From forecasting consumer demands to accurately predicting logistics costs, our teams have never seen a more complex operating environment in which to guide our expected results this year,” Peloton CEO John Foley said on the company`s earnings conference call.
The company reduced the price of its original bike by $ 400 in August. Executives said Thursday that the cut helped speed up bike sales, but it also meant fewer people would choose the more expensive bike+.
Efforts to keep costs down will probably not show up for a quarter or two years said a New York-based company. Peloton expects to make a profit before interest, taxes, depreciation, and amortization until the fiscal year 2023.