As if the bad news earlier this year was not enough for Peloton (NASDAQ:PTON), the company on Tuesday reported a wider-than-expected quarterly loss and a steep decline in sales, as inventory piled up in warehouses and ate away at the company’s cash.
The connected fitness equipment maker also offered up a weak sales outlook for the fiscal fourth quarter, citing softer demand. The company anticipates planned subscription price hikes may lead some users to cancel their monthly memberships.
Shares of the company fell $2.41, or 17.1%, in early trading Tuesday, to $11.72, after touching at an all-time low Monday and ending the day with a market value of roughly $4.7 billion. If the trend continues it would chop more than $1 billion off the company’s market cap.
Peloton’s excess inventory forced the company to rethink its capital structure, Chief Executive Officer Barry McCarthy said in a letter to shareholders. Peloton finished the quarter “thinly capitalized” with $879 million in unrestricted cash and cash equivalents, he said.
Peloton’s losses widened in the fiscal third quarter to $757.1 million, or $2.27 per share, from a net loss of $8.6 million, or three cents a share, a year earlier. That came in larger than the per-share loss of 83 cents that analysts had been looking for.
Revenue dropped to $964.3 million from $1.26 billion a year earlier. That was short of expectations for $972.9 million and marked the company’s first year-over-year decline in sales since it went public in 2019.
