Peloton (NASDAQ:PTON) shares dropped heavily Wednesday after the connected fitness company posted a wider than expected loss but beat Wall Street’s sales estimates.
Fourth-quarfter loss per share proved 68 cents vs. 38 cents expected, on revenue of $642.1 million vs. $639.9 million expected
The company reported a net loss of $241.8 million, or 68 cents per share, for the three-month period that ended June 30, compared with a loss of $1.26 billion, or $3.72 a share, a year earlier.
Sales dropped to $642.1 million, down $678.7 million a year earlier.
The company’s fiscal fourth quarter, which falls during the summer months, is traditionally slow not just for Peloton but also for other fitness retailers. Consumers have a tendency to pull back on workouts during the season as they travel and take part in other summer plans.
In May, CEO Barry McCarthy warned the fourth quarter would be among its most challenging from a growth perspective. For the first time, Peloton projected a decline in subscribers.
It ended the quarter with 3.08 million subscribers, up 4% year over year and in line with the company’s expectations. But compared to last quarter, subscribers declined by 29,000. The company attributed the drop to a “seasonal” slowdown in hardware sales and higher than anticipated churn.
PTON shares opened Wednesday down a whopping $1.48, or 21.2%, to $5.50.
