Peloton (NASDAQ:PTON) posted a wider-than-expected loss for its fiscal first quarter, as a steep decline in connected fitness products revenue outweighed an increase in subscription revenue.
The company’s shares fell $1.02, or 11.9%, to $7.61 in early trading Thursday. As of Wednesday’s close, Peloton’s stock has dropped about 75% so far this year.
Loss per share registered at $1.20, in contrast to the expected 64 cents, on revenues of $616.5 million vs. the projected $650.1 million.
Revenue fell 23% compared with the same period last year. Peloton’s revenue outlook for the holiday quarter, between $700 million and $725 million, would mark a quarter-to-quarter increase, but it’s well below analysts’ estimates of $874 million.
“Given macro economic uncertainties we believe near-term demand for Connected Fitness hardware is likely to remain challenged,” the company said.
CEO Barry McCarthy said in an earnings announcement Thursday that the company’s turnaround is a “work in progress.” The company has been struggling with the end of pandemic-era demand, when lockdowns spurred growth in at-home exercise.
This year, the company undertook significant leadership changes, mass layoffs and a new business strategy under McCarthy. The company has pushed beyond its direct-to-consumer roots into deals with other retailers and into a model that emphasizes subscriptions.
McCarthy has helmed a broad turnaround effort for the company. He oversaw thousands of layoffs, including 500 jobs which were culled in early October. The cost-cutting efforts were paired with new initiatives to sell more bikes and increase Peloton’s digital subscribers.