Status: 05.11.2021 9:16 a.m.
During the Corona lockdown, Peloton was one of the big winners of the crisis. Home training is much less popular now. The fitness equipment manufacturer is now posting high losses and is announcing an austerity course.
The lifting of many corona restrictions around the globe is affecting the business of the US fitness equipment specialist Peloton, which has so far been one of the biggest winners of the corona pandemic. While fitness studios remained closed, many customers bought the multi-thousand dollar networked exercise bikes.
The monthly subscriptions for training hours in front of the home screen no longer meet expectations. The demand for the expensive training equipment is also falling significantly faster than the company itself had forecast. The reason is obvious: people are slowly returning to their habits as they were before the pandemic broke out.
Peloton makes a loss
The consequences are massively reflected in the current peloton balance sheet: In the second quarter of the fiscal year, which ended at the end of September, sales rose year-on-year by six percent to $ 805.2 million. Bottom line, however, Peloton made a loss of $ 376 million – after black numbers of $ 69.3 million a year earlier.
For investors, the company outlook is always a key factor in assessing the business outlook and making an investment decision. What Peloton has to offer here looks anything but tempting. Because if the conditions change, the chances of success also change. The reopening of the fitness studios ensures that the customers’ money no longer ends up at Peloton, but back in the studios.
The company therefore drastically cut its sales forecast for the current financial year. Peloton now only expects revenues between $ 4.4 billion and $ 4.8 billion. Three months ago the company had assumed 5.4 billion.
Peloton also significantly lowered the forecast of the number of subscribers. At the end of the current financial year in mid-2022, the company now expects 3.35 to 3.45 million subscription customers. Previously, the expectation was up to 3.63 million.
Investors horrified
People are no longer trapped at home and competition is increasing, is the conclusion of Simeon Siegel, an industry observer at BMO Capital Markets. It is clear that “we have underestimated the impact of the store openings on our company and the entire economy,” said CFO Jill Woodworth.
The share price is often a good indicator of the hopes and profit expectations that the market has for the company: Investors were shocked in the Peloton case. After the trading hours, the paper crashed by around 30 percent. Since the beginning of the year, the company’s stock market value would have almost halved if the price reaction was confirmed.
But it’s not just the lifting of many corona restrictions that is exacerbating Peloton’s crisis. The result is also weighed down by, among other things, higher logistics costs for transports, which are currently driving up costs for many companies. Lack of chips and interrupted supply chains also have a negative impact. First of all, the management is now focusing on saving costs, Woodworth said during a conference call.