Peloton failed to wow investors with its holiday quarter results, sending its stock down nearly 8 per cent in after-hours trade as the group said it continued to struggle to deliver its flagship bike and treadmill products in a timely manner.
The connected spinning bike pioneer said revenues last quarter grew 128 per cent to $1.06bn, a nudge ahead of forecasts at $1.03bn. It produced a net profit of $63.6m — its third quarterly profit in a row — versus a loss of $55.4m a year ago.
Peloton pledged it would spend $100m on air freight and expedited ocean freight to improve its “longer than acceptable wait times” over the next six months. “While this investment will dampen our near-term profitability, improving our member experience is our first priority,” Peloton told shareholders.
It said that “well-publicised West Coast port delays and Covid-related factors” were continuing to keep delivery times elevated.
In late December Peloton announced the purchase of Precor, one of the world’s biggest fitness equipment makers, for $420m, adding manufacturing capacity for Peloton products.
“The ongoing Covid-19 pandemic continues to present a challenging operating landscape, and we continue to work to address long order-to-delivery timeframes,” Peloton said. “However, our supply chain investments over the last several months are helping us better match our supply and demand going forward.”
Peloton stock has soared 382 per cent in the past 12 months to give the company a valuation of $46bn. During the trading day on Thursday, the shares rose 7 per cent.
The company said it now had 1.67m subscribers using its bikes and treadmills — reflecting year-on-year growth of 134 per cent — and its no-equipment-necessary “Peloton Digital” subscriptions had risen 472 per cent to 625,000.
It raised its revenue forecast for the year ending June 30 to $4.1bn, which would be more than double the $1.83bn total for the previous fiscal year and compares to prior Wall Street estimates of $3.9bn.