Peloton Shares Surge on Strong Holiday Quarter Forecast
Peloton shares rose as much as 12 percent following the announcement of a stronger-than-expected holiday quarter forecast. The company is repositioning itself as a holistic wellness brand and aims to regain profitability after its first hardware revamp in years.
Peloton projected revenue between $665 million and $685 million for the quarter ending in December, surpassing Wall Street’s estimate of around $661 million for the fiscal second quarter.
CEO Statement on Performance and Strategy
“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 added his confidence in the company’s ability to execute its “strategic plan, return Peloton to profitable growth, and extend Peloton’s lead in connected fitness and wellness.”
Recent Recall and Financial Impact
Earlier on Thursday, Peloton recalled approximately 877,800 units of its high-end Bike+ model in the US and Canada after reports of seat post failures that led to rider falls. This recall cost the company $13.5 million during the first quarter.
Stock Performance
Peloton’s shares closed at $6.71 in New York. Despite recent gains, the stock has declined 22.9 percent so far this year through Thursday’s close.
Summary
Peloton's optimistic revenue forecast and strategic repositioning aim to restore growth, despite challenges like a costly product recall and year-to-date share price decline.