Peloton Shares Tumble as it Loses Momentum

Nov 5, 2021 By MarketDepth

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Peloton (NASDAQ: PTON) shares fell over 30% Friday after it cut its annual sales forecast by approximately USD1 Billion. Furthermore, though revenue rose 6%, it missed analyst expectations.

“We anticipated fiscal 2022 would be a very challenging year to forecast, given unusual year-ago comparisons, demand uncertainty amidst re-opening economies, and widely-reported supply chain constraints and commodity cost pressures.”

Chief Executive Officer John Foley said in a letter to shareholders

The fitness company has experienced a surge of growth throughout the coronavirus pandemic as people opted for more at-home workouts. Nevertheless, the momentum is subsiding as consumers begin to return to gyms. On Thursday, Planet Fitness revealed that its memberships were almost back to pre-pandemic levels.

“From forecasting consumer demands to accurately predicting logistics costs, our teams have never seen a more complex operating environment in which to guide our expected results this year.”

CEO John Foley said in a Company’s Earnings Conference Call

The company reported earnings of USD1.25 per share, compared to the expected USD1.07 a share. Revenue amounted to USD805.2 Million, lower than analyst anticipated USD810.7 Million.

Website and Store Traffic Down

Foley revealed that Peloton’s website traffic simmered down faster than it had anticipated within recent months. Moreover, customer visits to store locations were also down, Foley said.

Demand Lower

“Demand is coming in lower on all fronts leading us to wonder when we might see a return on all the capital they have deployed,” analysts at the firm said in a note to clients. “Long term, the connected fitness opportunity could still be intact but the path to get there appears more difficult.”