Peloton executives provided a weaker-than-expected holiday forecast Thursday and reduced expectations for the full year, sending shares on a steep decline.
According to a Bloomberg report, the company shares dove 34 percent, on course to wipe off about $8 billion USD from the market value of a company that was among the biggest corporate winners of last year’s lockdowns.
Peloton — best known for its exercise bikes and remote classes — reported a net loss of $376 million USD, or $1.25 per share, for the three-month period that ended on September 30, on revenues of $805 million. A year ago during the same period, the company made a $69.3 million USD net profit.
The company also revealed a gloomy outlook for the full fiscal year, slashing its forecasts for subscribers and sales. Peloton now expects revenue to range between $4.4 billion and $4.8 billion USD, compared with an earlier prediction of $5.4 billion.
Peloton flourished in the pandemic, as millions of people in lockdown around the world turned to its products and services to help them stay fit at home. Sales soared 250% in the first quarter of 2020.
But the company is struggling now the global economy is reopening, as people have the option to return to gyms and competitors launch similar, cheaper products. Its stock has fallen more than 62% so far in 2021.
“It is clear that we underestimated the reopening impact on our company and the overall industry,” Peloton boss John Foley said in a call with shareholders.