Peloton managed to beat sales expectations during its fiscal fourth quarter, but the exercise equipment maker reported a bigger loss than anticipated partly due to recall costs and a shift in consumer spending.
Shares plunged more than 23% in afternoon trading on Wednesday.
Revenue fell to
Subscription revenue rose 10%, while connected fitness products revenue slipped 25%.
The number of members declined 5% to 6.5 million from 6.9 million.
In a letter to shareholders, President and CEO
McCarthy also said that costs related to a seat post recall that was announced in May had substantially exceeded initial expectations.
“An estimated 15,000 to 20,000 of our 2.2 million impacted members elected to pause their monthly subscriptions in Q4 pending the receipt of a replacement seat post,” he added.
McCarthy cautioned on the upcoming quarters.
“We don’t currently expect to remain free cash flow positive in the two upcoming quarters, mainly due to seasonality of our hardware sales, timing of inventory payments, marketing spend as we invest for growth and prepare for the holiday season, and one-time cash outlay for seat posts; but we do expect to achieve this objective once again in the second half of fiscal 2024,” he said.
In addition, Peloton plans to resume pre-sales of its Tread+ treadmill in the
Looking ahead to the first quarter, Peloton foresees revenue in a range of
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