Peloton Shares Surge on Strong Holiday Quarter Forecast
Peloton's stock climbed as much as 12% following a forecast for the holiday quarter that exceeded expectations. The company is working to reposition itself as a comprehensive wellness brand while aiming to return to profitability after its first hardware update in years.
Revenue and Market Expectations
The company projected revenue between $665 million and $685 million for the quarter ending in December, surpassing Wall Street’s estimate of approximately $661 million for the fiscal second quarter.
CEO Statement on Strategic Outlook
“Our continued momentum on bottom line performance sets the stage for improvements on the top line as we progress through the fiscal year, fueled by our commitment to innovation and growing the Peloton community,” said CEO Peter Stern.
He expressed confidence in executing the company's strategic plan to "return Peloton to profitable growth, and extend Peloton’s lead in connected fitness and wellness.”
Recall Impact
Earlier on Thursday, Peloton announced a recall of approximately 877,800 units of its premium Bike+ model sold in the US and Canada due to seat post failures that caused rider falls. The recall expense was $13.5 million in the first quarter.
Stock Performance
Shares closed at $6.71 in New York but have declined 22.9% year-to-date through Thursday.
Author’s Summary
Peloton’s better-than-expected outlook and strategic shift toward holistic wellness highlight its efforts to recover profitability despite recent setbacks like the costly Bike+ recall.