Peloton reports first-quarter loss, forecasts weaker holiday sales

The company said its first-quarter net loss totalled $409m, or $1.20 per share, narrowing from $376m or $1.25 per share year-on-year.

It was, however, much wider than the 67 cent loss per share that analysts had pencilled in before Thursday’s earnings.

The firm’s EBITDA loss narrowed to $33.4m from $233.7m, better than the $112m anticipated by market watchers, while revenue slipped to $617m from $805m, missing the $637m anticipated.

Looking at the second quarter, which includes the key holiday sales period, Peloton said it was targeting an adjusted EBITDA loss of between $110m and $115m.

That would be off revenue of between $700m and $725m, well below the $866m analysts were previously hoping for.

“Peloton’s turnaround remains a work-in-progress, with $199m in first quarter recall reserves, restructuring, and impairment expenses,” said the company’s president and chief executive officer Barry McCarthy.

“And not all the changes we’ve implemented are working as well as we’d like - especially as it relates to some last mile delivery and customer service issues.

“We remain committed to fixing these.”

Peloton said breakeven free cash flow remained an objective, but was not a guaranteed outcome.

“There are risks we will underachieve our forecast, particularly in this economic climate and given the outsized importance and uncertainty of the holiday selling season on overall performance.

“But the green shoots are numerous and undeniable.

“Considering our progress over the last seven months, the substantial changes we’ve made to our business model, and the infusion of additional talent on the leadership team, I believe our first quarter results make a strong case that we will beat the one year timeline and deliver on our turnaround goal.”

At 0758 EDT (1158 GMT), shares in Peloton Interactive were down 15.99% at $7.25 in pre-market trading.

Reporting by Josh White for Sharecast.com.