PTON Stock Slumps 26% as Peloton Reports Huge Loss in Fiscal Q3 2022

UTC by Ibukun Ogundare · 3 min read
PTON Stock Slumps 26% as Peloton Reports Huge Loss in Fiscal Q3 2022
Photo: Peloton / Facebook

According to Peloton, the fiscal Q3 losses were fueled by a sharp reduction in consumer demand.

Shares of exercise equipment manufacturer Peloton Interactive Inc (NASDAQ: PTON) declined 26% after comedy announced a huge loss in its fiscal Q3. The quarterly loss the connected fitness equipment maker reported was wider than expectations, leading to its shares fall. In the three months ended on the 31st of March, Peloton recorded a $2.27 loss per share. Meanwhile, analysts had predicted 83 cents loss per share. This equals widened losses of $757.1 million from a net loss of $8.6 million in the previous year. Also, the equipment company said revenue for fiscal Q3 was $964.3 million, lower than the expected $972.9 million. The revenue Peloton reported for fiscal Q3 was significantly lower than the $1.26 billion generated a year before. Also, last quarter was the first time Peloton would be seeing a year-over-year decline in sales since its IPO in 2019.

MarketWatch data shows that Peloton has been steadily plunging, losing over 84% in a year. Since the beginning of 2022. The company has shed more than 60% and declined 62.09% in the last three months. At pre-market trading, Peloton is down 19.60% to $11.32.

Peloton Reports Lows in Fiscal Q3

According to Peloton, the fiscal Q3 losses were fueled by a sharp reduction in consumer demand. Peloton saw a spike in demand during the stay-home period caused by the coronavirus pandemic. At the time, people could not go to the gym and resort to working out at home. This led to high demand for Peloton’s exercise equipment and increased subscribers. However, with restrictions easing off, Peloton has seen a significant drop in sales.

Furthermore, Peloton noted that it saw higher than anticipated returns for its Tread+ machine. The company also said its connected fitness products generated $594 million in sales. In addition, Peloton said the products amassed $370 million from subscriptions in its fiscal Q3. About 195,000 subscribers came on board during the same quarter, resulting in 2.96 million connected fitness subscribers.

Look ahead, the equipment maker has offered a weak sales outlook for the current quarter. According to Peloton, softer demand which started in February is bound to affect sales in Q4. Also, the company is expecting revenue to be between $675 million and $700 million in the new quarter. The revenue outlook is lower than analysts’ prediction of $821.7 million. Additionally, Peloton is looking forward to a 1% jump in subscribers compared to its fiscal Q3. This represents an expectation of 2.98 million connected fitness subscribers.

Moreover, Peloton expects the increase in the subscription price, which will begin next month, to have a negative impact on the company. The price hike may cause some users to terminate their memberships.

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Ibukun Ogundare

Ibukun is a crypto/finance writer interested in passing relevant information, using non-complex words to reach all kinds of audience. Apart from writing, she likes to see movies, cook, and explore restaurants in the city of Lagos, where she resides.

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