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Peloton’s (PTON, $9.34) latest earnings showed that the company is making progress on its goal of trimming losses, though the company’s CEO acknowledged that these strides were coming at the expense of growth.
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Shares of the former pandemic darling were off as much as 16.1% in Thursday morning trading but pared back those losses and were recently down just 2.6%. Revenue fell 23% compared with the same period last year. Peloton’s revenue outlook for the holiday quarter, between $700 million and $725 million, would mark a quarter-to-quarter increase, but it’s well below analysts’ estimates of $874 million.
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Connected Fitness subscriptions are expected to grow only modestly during the quarter to 3M from 2.97M at the close of September.
Why it matters
Peloton CEO Barry McCarthy said in an earnings announcement Thursday that the company’s turnaround is a “work in progress.” This year, the company undertook significant leadership changes, mass layoffs, and a new business strategy under McCarthy. The company has pushed beyond its direct-to-consumer roots into deals with other retailers and into a model that emphasizes subscriptions.
