Peloton's shares plummeted after the fitness company cut its annual revenue forecast and lowered its projections for subscriptions and profit margins. AP
Peloton's shares plummeted after the fitness company cut its annual revenue forecast and lowered its projections for subscriptions and profit margins. AP
Peloton's shares plummeted after the fitness company cut its annual revenue forecast and lowered its projections for subscriptions and profit margins. AP
Peloton shares plummeted 32 per cent in early trading on Friday after the company cut its annual revenue forecast by as much as $1 billion and lowered its projections for subscribers and profit margins.
The fitness company now expects sales of $4.4bn to $4.8bn in fiscal 2022, which ends next June. Less than three months ago, it had been predicting revenue of $5.4bn.
On an earnings call with analysts, Peloton said it underestimated the impact of economic reopenings.
The grim outlook sent the stock down to as low as $56.80 in premarket trading. Several analysts downgraded their ratings on the stock. Even before the swoon, Peloton shares were down 43 per cent this year.
Peloton was a pandemic phenomenon, with customers flocking to home-exercise services during lockdowns. Now people are heading back to the office, school and gyms, sapping demand for the company’s equipment. Supply-chain constraints, as well as the soaring costs of commodities and freight, also are weighing on Peloton.
“We anticipated fiscal 2022 would be a very challenging year to forecast,” management said in a letter to shareholders on Thursday. “We will be taking concrete steps to re-examine our expense base and adjust our operating costs.”
On Peloton’s earnings call, co-founder and chief executive John Foley said the “swift” change in its outlook is “not lost on us” and that visibility into its future performance has become more limited.
Executives added that traffic to Peloton’s retail stores and website tapered more than anticipated, but the company saw positive response to price changes and launches internationally.
The company cut the price of its original bike by $400 in August, and that, too, has hurt profitability — especially since more shoppers than expected opted for that model over other products.
“A softer-than-anticipated start” to the second fiscal quarter contributed to the company’s decision to rethink its forecast, the letter said. But Peloton added that its “confidence in and commitment to our strategy is unchanged".
Peloton previously introduced a line of treadmills, but had to recall both models in May. In August, it brought back the lower-end treadmill, but not the more expensive version, which was linked to a child’s death.
As people continue to return to the office, the average number of monthly workouts fell to 16.6 per subscription from 20.7 a year earlier.
Peloton also is trying to shed its upscale image, which may put off many middle-class consumers.
“There remains a lingering perception that Peloton is a luxury item,” the company said. “We intend to amplify the platform’s value proposition via increased marketing ahead of and during our key seasonal selling period.”
Tailors and retailers miss out on back-to-school rush
Tailors and retailers across the city said it was an ominous start to what is usually a busy season for sales.
With many parents opting to continue home learning for their children, the usual rush to buy school uniforms was muted this year.
“So far we have taken about 70 to 80 orders for items like shirts and trousers,” said Vikram Attrai, manager at Stallion Bespoke Tailors in Dubai.
“Last year in the same period we had about 200 orders and lots of demand.
“We custom fit uniform pieces and use materials such as cotton, wool and cashmere.
“Depending on size, a white shirt with logo is priced at about Dh100 to Dh150 and shorts, trousers, skirts and dresses cost between Dh150 to Dh250 a piece.”
A spokesman for Threads, a uniform shop based in Times Square Centre Dubai, said customer footfall had slowed down dramatically over the past few months.
“Now parents have the option to keep children doing online learning they don’t need uniforms so it has quietened down.”
TO A LAND UNKNOWN
Director: Mahdi Fleifel
Starring: Mahmoud Bakri, Aram Sabbah, Mohammad Alsurafa
126: The length in metres of the legs supporting the structure
1 football pitch: The length of each permanent spoke is longer than a professional soccer pitch
16 A380 Airbuses: The equivalent weight of the wheel rim.
9,000 tonnes: The amount of steel used to construct the project.
5 tonnes: The weight of each permanent spoke that is holding the wheel rim in place
192: The amount of cable wires used to create the wheel. They measure a distance of 2,4000km in total, the equivalent of the distance between Dubai and Cairo.
