Peloton Interactive Inc. Stationary Bicycles are on display at the company’s showroom on Madison Avenue in New York, USA, on Wednesday, December 18, 2019.
Jeenah Moon | Bloomberg | Getty Images
Peloton reported quarterly quarterly sales growth of 128% on Thursday, marking the first quarter of billions of dollars as the momentum continues to grow for the home fitness equipment maker.
The company also increased its revenue outlook for the year as a whole. But he warned that it still faces short-term obstacles in delivering products quickly to its customers, amid growing demand.
Peloton shares fell more than 6% in extended transactions on Thursday. The stock closed up 7% at $ 157.53.
Here’s how Peloton did during the second fiscal quarter compared to what analysts expected, based on a poll conducted by Refinitiv:
- Earnings per share: 18 cents versus 9 cents, expected
- Revenue: $ 1.06 billion compared to $ 1.03 billion, expected
For the three-month period ended December 31, Peloton’s earnings rose to $ 63.6 million, or 18 cents a share, from a loss of $ 55.4 million or 20 cents a share a year ago. Analysts demanded that Peloton earn 9 cents per share, according to Refinitiv.
Revenue rose 128% to $ 1.06 billion from $ 466.3 million a year earlier, exceeding expectations of $ 1.03 billion.
For the current third fiscal quarter, Peloton expects sales to reach $ 1.10 billion. Analysts demanded $ 1.09 billion.
Investments in the supply chain
As a result of higher sales, Peloton now expects year-round revenue to reach $ 4 billion, up from previous forecasts of more than $ 3.9 billion. Analysts demanded $ 3.95 billion.
The company has kept its earnings prospects unchanged for fiscal year 2021.
Peloton said it continues to see robust demand for its products and will make additional investments in its supply chain to ease bottlenecks, which could have an impact on profits.
In a letter to shareholders, the company said it would invest more than $ 100 million in air freight and speed up shipping over the next six months to help speed up deliveries.
“While this investment will diminish our short-term return, improving our member experience is our number one priority,” the company said.
Peloton said it is still anticipating inventory levels to improve and delivery windows to shrink, in part due to its $ 420 million pending acquisition of exercise equipment maker Precor. But he said his progress was expected to be “slow but steady” for the rest of the year.
CEO John Foley said Peloton remains “hopeful”, however, that “accelerating the distribution of vaccines and opening up our economy more broadly” will prove to benefit the business in the coming months.
Retention rates remain high
Peloton ended its last quarter with 1.67 million fitness-connected subscribers, up 134% from a year earlier. Connected fitness subscribers are people who pay a monthly fee to synchronize Peloton’s training classes with their Peloton equipment, compared to accessing programs separately via a phone or tablet and paying a lower rate.
The company expects to have 2.28 million or more fitness subscriptions connected by the end of the fiscal year, compared to previous prospects for 2.17 million users.
Peloton’s retention rates remain strong, a good indication of its future success. The average monthly net value of connected fitness was 0.76% in the last quarter, which marked a slight increase from 0.65% in the previous period. But the company said it expects the churn rate in the current quarter to be below 0.75% and the churn rate for fiscal year 2021 to be below 0.80%, better than a previous outlook of less than 0.90% . The lower the churn rate, the less Peloton sees the user base.
And the cycle manufacturer continues to look for ways to attract customers to exercise more. Total training has been said to have risen to over 113 million from 26 million a year ago. Recently, it launched a feature in which users can “stack” classes backwards and ask them to automatically play one after the other. He has also recently added Pilates classes to his catalog.
Shares of Peloton increased by over 365% compared to a year ago. The company has a market cap of $ 46 billion.
Find the full version of Peloton’s revenue here.
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