Shares of Peloton Interactive (PTON 4.29%) were taking a dive today after the connected fitness specialist posted another disappointing quarterly earnings report and cut its guidance for the fiscal year.
As a result, the stock was down 23.1% as of 11:52 a.m. ET.
Image source: Peloton.
Peloton's wheels come off again
While Peloton beat top-line estimates in the fiscal second quarter, ended Dec. 31, 2023, revenue still fell. The company reported declining membership and said sales would be worse than expected in the current quarter.
Revenue in the second quarter fell 6% from the previous year to $743.6 million, ahead of $733.5 million. Subscription revenue actually increased, rising 3% to $424.5 million, but members fell 4% to 6.4 million. Paid subscriptions inched up 1% to 3 million.
On the bottom line, the company's performance improved, but it still reported a loss in the seasonally strong quarter. Adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) improved from a loss of $122.4 million to $81.7 million.
Peloton reported a loss per share of $0.54, which was a penny worse than the consensus, but better than the $0.98 per share it lost in the quarter a year ago.
CEO Barry McCarthy said, "While we continue to outperform the connected fitness market, our biggest challenge continues to be growth, at scale."
Can Peloton climb out of this hole?
Peloton stock appeared set to close at an all-time low as the company dialed down its guidance for the year.
For the third quarter, it expects revenue of $700 million to $725 million, representing a decline of 5% at the midpoint. It also forecast an adjusted EBITDA loss of $20 million to $30 million.
For the full year, it sees revenue falling 3% to between $2.675 billion and $2.75 billion and an EBITDA loss of $25 million to $75 million. It also sees flat growth in connected fitness subscriptions at 3 million.
McCarthy has now led the company for nearly two years, but his turnaround strategy has not paid off. Given the disappointing outlook, it's understandable why the stock is heading south. The business still looks broken.
