Peloton Interactive nasdaq Pton Shares Crash on Bleak Q3 Forecast

Peloton Interactive (NASDAQ: PTON) Shares Crash on Bleak Q3 Forecast

Peloton Interactive (NASDAQ: PTON) stock tumbled by more than 24% on Thursday after the fitness technology company reported another loss and provided a less-than-optimistic forecast, prolonging its challenges after the peak of its pandemic success.

Peloton Interactive (PTON) reported second-quarter sales of $744 million, marking a 6% drop from last year and a 34% fall from two years ago. The earnings per share came in at 54 cents, marking three years without a quarterly per-share profit.

Peloton projects fourth-quarter revenue between $700 and $725 million, falling short of analyst predictions of $750 million. The company also revised its full-year sales forecast downwards, expecting between $2.68 billion and $2.75 billion. This marks a decrease from the earlier projection of $2.8 billion.

Moreover, the company ended its joint venture with the University of Michigan as efforts to sell the co-branded Bike+ with the school’s logo were unsuccessful. The limited-edition bike, priced at $2,795, is still available for sale on Peloton’s website.

Peloton CEO Barry McCarthy admitted the misstep, stating,
“What seemed like a good idea didn’t deliver.”

Peloton Sales: Pandemic Boom and Post-Vaccine Slowdown

Peloton witnessed a significant surge in sales during the peak of the COVID-19 pandemic, with its stock price increasing more than fivefold in 2020 due to lockdowns. However, as vaccines became more widely available in 2021, allowing people to leave their homes and return to gyms, sales of its high-end bikes and treadmills began to decelerate.

Early in 2022, Barry McCarthy succeeded John Foley as CEO of Peloton with the goal of rectifying a business that had faced numerous setbacks, including marketing missteps and product recalls. The company underwent a major rebranding last year, moving away from its image as a purveyor of luxury fitness equipment and repositioning itself as a more inclusive health technology firm.

Peloton forged a five-year partnership with athletic wear maker Lululemon last fall, making Lululemon the exclusive digital fitness content provider. This move marked a strategic shift and ended Lululemon’s connected fitness device, Mirror, acquired in June 2020.

Peloton (NASDAQ: PTON) Stock Performance

PTON stock nosedived 24.28% on Thursday. The traders had exchanged hands with 82,161,454 (82.16 million) shares compared to the average daily trading volume of 13.29 million.