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Without stating its expectations for the upcoming fiscal 2023, Peloton sees its subscribers staying flat in fiscal Q1 2023.
American exercise equipment and media company Peloton Interactive (NASDAQ: PTON) has reported a $1.2 billion loss in its fiscal Q4 2022. Peloton is one of the beneficiaries of the coronavirus pandemic, with increased demand and customer base. The company saw widening losses and sales decline during the period. Notably, the quarterly sales included $415 million in restructuring charges, jumping over the $313 million loss in the same quarter in the previous year. CEO Barry McCarthy noted that the loss reflects substantial progress in the quarter, “re-architecting the business to reduce the current and future inventory overhang, converting fixed to variable costs, and addressing numerous supply chain issues.” Peloton added that revenue for the fiscal Q4 2022 also dropped by 28% on an annual basis to $679 million.
Peloton Sees $1.2 Billion Loss in Fiscal Q4 2022
The Peloton fiscal Q4 2022 financial report represents its sixth consecutive quarter of reported losses. The company highlighted a negative cash flow of $412 million in the quarter. However, McCarthy said the company is on the path to sustaining positive free cash flow in H2 fiscal 2023. The CEO wrote that Peloton targeted two goals from a supply chain perspective during the fiscal Q4 2022. They are reducing inventory commitments and outsourcing all manufacturing for connected fitness hardware. According to McCarthy, both goals were successful, and the company shut its owned manufacturing activities in Taiwan.
Peloton has undergone different changes since McCarthy took over from founder John Foley as CEO. While announcing the new CEO in February, the company added that it would cut 2,800 jobs or about 20% of corporate positions. Peloton’s founder Foley expressed his confidence in Barry as the right leader capable of taking the company to the next growth phase. Since the management shakeup, Peloton has pumped membership fees and increased equipment. The company has also let go of a significant percentage of workers.
Peloton’s Expectations for Coming Year
Without stating its expectations for the upcoming fiscal 2023, Peloton sees its subscribers staying flat in fiscal Q1 2023. Also, it expects its revenue to range between $625 million and $650 million, lower than analysts’ estimates. At premarket trading, PTON popped 0.18% to $11.06. The exercise equipment manufacturer has been declining, except for gaining 16.02% over the past month. In addition, the company has dropped 89.45% in the last twelve months and shed 69.21%. Peloton has plunged 24.12% and lost 5.98%.
In the shareholder letter, the top executive wrote:
“The naysayers will look at our [Q4] financial performance and see a melting pot of declining revenue, negative gross margin, and deeper operating losses. But what I see is significant progress driving our comeback and Peloton’s long-term resilience. We still have work to do.”
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