Peloton Raises Outlook Following Hardware Revamp
Peloton's shares jumped up to 12% after the company announced a stronger-than-expected forecast for the holiday quarter. This reflects its strategy to transform into a comprehensive wellness brand and restore profitability after its first hardware overhaul in years.
Financial Forecast Beats Expectations
The company projects revenue between $665 million and $685 million for the quarter ending in December, surpassing Wall Street estimates of approximately $661 million for Peloton’s fiscal second quarter.
CEO’s Statement on Growth and Innovation
“Our continued momentum on bottom line performance sets the stage for improvements on the top line as we progress through the fiscal year, fuelled by our commitment to innovation and growing the Peloton community,” said Chief Executive Officer Peter Stern.
He expressed confidence in executing the company’s strategic plan to return Peloton to profitable growth and to extend its leadership in connected fitness and wellness.
Recall Impact
Earlier in the week, Peloton recalled roughly 877,800 units of its high-end Bike+ in the US and Canada due to seat posts breaking and causing rider falls. This recall cost the company $13.5 million in the first quarter.
Stock Performance
Peloton shares ended trading at $6.71 in New York, dropping 22.9% so far this year through the recent close.
Summary
Peloton's improved forecast and strategic pivot indicate a promising path toward regaining profitability and market leadership despite challenges from recent product recalls.