Peloton shares plunge more than 20% after dismal forecast: ‘Speed bumps ahead’
Peloton Interactive trimmed its full-year revenue forecast amid its two-year-long efforts to turn around the business, sending the exercise equipment maker’s shares plunging to a record low on Thursday.
The stock closed fell to a low of $4.17, down 24% before closing at $4.21 on Thursday
The company now expects full-year 2024 revenue to be between $2.68 billion and $2.75 billion, down from its previous forecast of between $2.70 billion and $2.80 billion.
“In lowering its guidance, Peloton is acknowledging that the pivot from a hardware-focused business to a subscription-based model is rocky,” said Zak Stambor, senior analyst, retail & ecommerce, at research firm Insider Intelligence.
The company ended with 3 million connected-fitness subscribers in the second quarter, an about 1% increase from a year earlier and above FactSet estimates of 2.99 million.
“While it delivered better-than-expected gains in paid connected fitness subscribers, there are plenty of potential speed bumps ahead,” Stambor said.
Peloton, which was one of the biggest beneficiaries of COVID-19 lockdowns, has signed partnerships with Amazon and Lululemon Athletica to make its products and services more accessible.
![Peloton store](https://nypost.com/wp-content/uploads/sites/2/2024/02/person-walks-past-peloton-store-75755803.jpg?w=1024)
It is also betting on a boost from the reintroduction of the high-end Tread+ priced at $5,995, two years after sales were temporarily halted due to safety concerns.
Still, demand for its equipment was lower than expected as inflation-weary customers pulled back on spending during the holiday season, typically its strongest for hardware sales.
“While our paid subscriptions for connected fitness outperformed our expectations, our hardware sales were a bit softer than we expected,” Chief Financial Officer Elizabeth Coddington said on a call with analysts.
Peloton now expects to generate positive free cash flow in Q4 but said it would fall short of achieving positive free cash flow for the full year.
![Peloton bike](https://nypost.com/wp-content/uploads/sites/2/2024/02/peloton-exercise-bike-seen-ringing-5992700.jpg?w=1024)
Revenue fell 6.2% to $743.6 million but beat analysts’ expectations of $733.5 million, according to LSEG data.
The company said it expects third-quarter revenue to come in between $700 million and $725 million, below analysts’ estimates of $753.8 million.