Peloton Interactive (PTON) -) shares slumped after the the fitness-equipment maker posted a wider-than-expected fiscal-fourth-quarter loss and said subscribers to its connected-fitness platforms would fall from end of year levels.
Peloton said its adjusted loss for the three months ended in June was 68 cents a share, narrowed from the $3.69 loss reported for the year-earlier period but wider than Wall Street had forecast: a 38-cent loss per share.
Group revenue topped forecasts at $642.1 million, but fell 5.3% from a year earlier. That figure likely will decline further, to between $580 million and $600 million, over the current quarter.
Peloton said it ended the year with a paid subscriber base of 3.078 million, just shy of its own forecasts. But it added that that tally would fall to between 2.95 million and 2.96 million over the three months ending in September.
'We operate a seasonal business': Peloton CEO
"Peloton’s FYQ4 performance is a reminder we operate a seasonal business," Chief Executive Barry McCarthy told investors in his regular letter to shareholders.
"We ended Q4 with 4% [year-over-year] Connected Fitness subscription growth, but subscribers declined by 29,000 on a [quarter-to-quarter] basis due to the seasonal slowdown in hardware sales and higher than anticipated subscription churn. The slowdown exceeded our expectations."
Peloton shares at last check were off 22% at $5..43, or 32% below the close of $7.94 at year-end 2022, The stock touched a record low $5.05 earlier in the Wednesday session. The stock's pandemic-era peak was $162.72 in December 2020.
Peloton's own forecast pegged revenue in the region of $630 million to $640 million. Chief Financial Officer Liz Coddington suggested the group was "within striking distance of achieving free-cash-flow break-even. The progress that we've made is very positive and continues to be positive."
"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," McCarthy said.
"But we do expect to achieve this objective once again in the second half of FY24."
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