Peloton (NASDAQ:PTON) on Thursday reported widening losses and slumping sales for its fiscal fourth quarter as the connected fitness equipment maker attempts to win back investors with cost cuts and strategic shifts.
The company’s shares declined more than 20% – a day after the stock surged more than 20% on news of its partnership with Amazon (NASDAQ:AMZN).
It marks Peloton’s sixth consecutive quarter of reported losses. The company said it aims to reach breakeven cash flow on a quarterly basis in the second half of its fiscal year 2023.
Still, Peloton CEO Barry McCarthy said he expects the market for connected fitness will remain challenging for the foreseeable future, as consumer demand for at-home workout machines wanes from COVID pandemic highs.
Peloton’s net loss widened in the three-month period ended June 30 to $1.24 billion, or $3.68 per share, from a loss of $313.2 million, or $1.05 a share, a year earlier.
McCarthy said the losses stemmed from Peloton’s efforts to avoid an inventory glut, cut fixed costs and address other supply chain issues. The company earlier this year embarked on an $800 million restructuring plan. Peloton ended the fourth quarter with inventory of $1.1 billion, compared with $937.1 million a year earlier.
Revenue fell 28% to $678.7 million from $936.9 million a year earlier. That came in short of the $718.2 million that analysts had been looking for.
Within that figure, connected fitness revenue that includes the contribution from Peloton’s Precor business dropped 55% to $295.6 million.
PTON shares tumbled 53 cents, or 4.8%, to $10.48.
