Peloton Interactive's (PTON +1.51%) woes have continued so far this year as the connected fitness company is still struggling to grow and turn a profit as it's been unable to overcome its post-pandemic collapse.
While some investors continue to hope for a turnaround, there was little sign of one in its two quarterly reports through the first half of the year. The stock also fell in June when the Senate blocked spending from Health Savings Accounts (HSAs) on gym memberships and personal fitness activities.
Through the first half of the year, the stock was down 20% according to data from S&P Global Market Intelligence.
As you can see from the chart below, the stock fell through February and March, and only managed a modest recovery in the second quarter even though the broad market soared.
Peloton is still moving backwards
After announcing last year that Barry McCarthy would step down as CEO, the company began the year with a new chief executive, Peter Stern, who is a co-founder of Apple Fitness.
Peloton shares were up briefly in February as investors bid the stock higher after its Q2 earnings report on Feb. 6 even though the business continued to struggle.
Revenue fell 9% to $673.9 million, and subscribers and members both fell. The company also managed to flip a $81.7 million adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) loss from the quarter the year before to a profit of $58.4 million.
Later in February and into March, the stock began to fall even as there was no company-specific news out. Instead, the stock seemed to fall in response to weakening consumer sentiment and the broader decline in the stock market. As a seller of high-priced exercise equipment, Peloton is clearly sensitive to consumer spending. In April, the company announced a leadership transition, bringing in Charles Kirol as COO.
In its fiscal Q3 earnings report, revenue fell again, declining 13% to $624 million, though its cost-cutting efforts paid off as it continued to narrow its generally accepted accounting principles (GAAP) net loss, which improved from $167.3 million to $47.7 million.
On June 17, the stock fell 12% as the Senate removed a provision from a bill to allow health savings accounts (HSAs) to be used for things like Peloton equipment.
Image source: Peloton.
What's next for Peloton
Peloton is making progress on the bottom line thanks to its cost-cutting strategy, and it did raise its revenue guidance in its most recent report.
However, it's hard to say that its turnaround strategy is working until the company is able to demonstrate steady growth in both revenue and subscribers. It could take a while for the company to get back there.
