Peloton Stock Falls After Slashing Bike Price and Reporting Wider Net Loss
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Peloton Bike
Courtesy of Peloton
Peloton Interactive
said Thursday it plans to slash the price of its bike again and reported a wider-than-expected quarterly loss, sending its stock skidding in after-hours trading.
The digital fitness firm that sells high-end bikes and treadmills that sync up with membership is lowering the price of its flagship bike to $1,495 from $1,895. Memberships will still cost $39.99-a-month. Nearly a year ago, the price of its bike was lowered by $350 when the company launched its higher-end Bike+ for $2,495.
Peloton (ticker: PTON) also reported a fiscal fourth-quarter net loss of $312.2 million, or $1.05 per share. Wall Street’s consensus estimate called for a net loss of 44 cents a share, according to FactSet. Sales of $937 million were also above consensus estimates at $928.6 million. Peloton reported an adjusted earnings before interest, taxes, depreciation, and amortization loss of $45.1 million, slightly less than the $46 million analysts were expecting.
The company expects sales of $800 million in the fiscal first quarter, well below the $1 billion that analysts were previously forecasting, according to FactSet.
Peloton stock was down 11% to $101 in after-hours trading following the earnings release. The stock had already fallen 24% year to date amid the broader reopening trade.
Peloton said the price cut will make the bike more accessible. Analysts originally cheered the company’s decision last year to cut the device’s price, arguing it would expand Peloton’s market. It has invested in logistics capabilities and plans to have a $400 million U.S. factory up and running in 2023.
The company also said it is expanding the financing offerings for its Bike+ to $59 a month for 43 months at a 0% annual percentage rate, compared with a prior $64 a month for a 39-month plan. It will offer the same financing for the Peloton Tread, its lower-priced treadmill that will launch in the U.S., Canada, and U.K. on Aug. 30. An earlier version of the Tread wasn’t widely released and was voluntarily recalled alongside the Tread+ in May. The Tread+ specifically garnered headlines following the death of one child and more than 70 other reported incidents.
“We’ve worked hard to make sure the new Tread truly earns its spot in Members’ homes,” CEO John Foley said earlier this week. “We’ll always continue to innovate our hardware, software and safety features to live up to our commitment to Member safety and to improving the full Member experience.”
The company ended the quarter with 2.33 million connected fitness subscribers, up 114% year-over-year and above consensus estimates at 2.28 million.
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