By Abhinav Parmar
Feb 5 (Reuters) – Peloton Interactive forecast third-quarter revenue below Wall Street estimates on Thursday, citing weak demand for its fitness equipment, sending its shares down about 23% to their lowest level in roughly 18 months.
The New York-based maker of exercise bikes and treadmills has struggled with softer equipment sales even as it rolls out cost-cutting measures as part of a broader turnaround under CEO Peter Stern.
Peloton projected third-quarter revenue between $605 million and $625 million, below analysts’ average estimate of $638.4 million, according to data compiled by LSEG.
“Lower-than-expected Connected Fitness Product sales to existing members weighed on results,” analysts at Bernstein wrote in a note.
CFO Liz Coddington said longer-than-expected delivery times delayed roughly $4 million of revenue recognition into the third quarter.
Membership on Peloton’s subscription-based fitness platform fell more than 6% year over year to 5.8 million in the second quarter.
Persistently high prices have weighed on U.S. consumers, with consumer confidence falling to its lowest level in more than 11-1/2 years in January, data showed.
The company has been rolling out cost cuts and said in January it cut 11% of its workforce and has raised prices for equipment and subscriptions since Stern took the helm.
Peloton also said Coddington will leave to pursue other opportunities. She will remain through March while the company searches for its next finance chief.
The at-home exercise equipment maker reported a wider-than-expected second-quarter loss of 9 cents per share, compared with analysts’ expectations for a 6-cent loss.
Revenue for the quarter ended December 31 came in at $656.5 million, missing analysts’ estimates of $674.3 million.
(Reporting by Abhinav Parmar in Bengaluru; Editing by Tasim Zahid)
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