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September 25, 2021
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Peloton’s sales surge 141% as delivery pressures ease; no word on recall’s financial hit

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A monitor displays Peloton Interactive Inc. signage during the company’s initial public offering (IPO) across from the Nasdaq MarketSite in New York, U.S., on Thursday, Sept. 26, 2019.

Michael Nagle | Bloomberg | Getty Images

Peloton on Thursday reported fiscal third-quarter sales growth of 141%, saying recent investments in its supply chain allowed it to improve delivery.

The company said average wait times for its Bike are now back to pre-pandemic levels. 

On the heels of a treadmill recall, Peloton didn’t provide a financial outlook. 

Peloton shares fell more than 3% in after-hours trading.

Here’s what the company reported for the quarter ended March 31 compared with what Wall Street was expecting, based on a survey of analysts by Refinitiv:

  • Loss per share: 3 cents vs. 12 cents expected
  • Revenue: $1.26 billion vs. $1.1 billion expected

Peloton’s net loss shrank to $8.6 million, or 3 cents per share, from a loss of $55.6 million, or 20 cents per share, a year earlier. That was better than the 12-cent per share loss that analysts were anticipating. 

Total revenue surged 141% to $1.26 billion from $524.6 million a year earlier, and topped a Wall Street forecast for $1.1 billion. 

Peloton didn’t provide any updated financial forecast. Previously, it said sales were expected to top $4 billion this year. 

Connected fitness revenue rose 140% to $1.02 billion, representing 81% of its total sales. Subscription revenue grew 144% from 2020 levels to $239.4 million, and makes up 19% of total revenue, the company said. 

Sales were driven, in part, by an acceleration of expected deliveries, Peloton said. Last quarter, it announced plans to invest $100 million in air freight and expedited ocean freight over a six-month period to help speed shipments. It also recently completed its $420 million acquisition of the manufacturer Precor, in a bid to boost its manufacturing capabilities in the United States. 

“While progress has been made, additional work remains to reduce delivery times across the remainder of our product portfolio and regions,” Chief Executive John Foley said in a letter to shareholders Thursday. 

Churn hits record low

Peloton ended the quarter with 2.08 million connected fitness subscriptions, up 135% from a year earlier. Connected fitness subscribers are people who own a Peloton product and also pay a monthly fee for access to Peloton’s digital workout content. 

Average net monthly connected fitness churn, which Peloton uses to measure retention of connected fitness subscribers, hit a six-year low of 0.31%. The lower the churn rate, the less turnover Peloton is seeing with its user base. 

Total workouts, which include those from connected fitness users and from digital-only customers, grew to more than 171 million from 48 million a year earlier.

The company has been adding new content, such as barre and Pilates classes, to keep its customers engaged. It’s also preparing to launch in Australia later this year, as it continues pushing into new markets. 

No word on treadmill impact

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