What happened
Shares of Peloton Interactive (PTON 4.29%) plummeted this morning after the company reported fiscal fourth-quarter top- and bottom-line results that were far lower than analysts' average estimates. Investors were also disappointed with the company's first-quarter sales guidance.
Peloton's stock had plunged 19.2% as of 11:31 a.m. ET.
So what
Peloton reported a loss under generally accepted accounting principles (GAAP) of $3.68 per share in the quarter, ended June 30, which was down significantly from a loss of $1.05 in the year-ago quarter and much worse than Wall Street's consensus estimate of a loss of $0.76 per share.
Image source: Peloton.
The company's sales were a big disappointment as well. Peloton's revenue of $678.7 million tumbled by nearly 28% from the year-ago quarter and fell below analysts' average estimate of $682 million.
Making matters worse for Peloton investors today is the fact that management issued fiscal first-quarter guidance that was below expectations. The company said sales will be in the range of $625 million to $650 million, which failed to match analysts' consensus estimate of $783.2 million. That revenue guidance also represents a 21% decrease from the year-ago quarter, at the midpoint.
Now what
Peloton CEO Barry McCarthy said in a press release that when some people look at the company's latest financial results the "naysayers" will see "a melting pot of declining revenue, negative gross margin, and deeper operating losses. They will say these threaten the viability of the business." He continued, "But what I see is significant progress driving our comeback and Peloton's long-term resilience."
Investors strongly disagreed. With earnings and revenue both on the decline and the company's guidance falling below expectations, it's not surprising Peloton's stock is in a free fall today.
