Peloton slashes its full-year revenue outlook as company replaces CEO, cuts 2,800 jobs

Peloton on Tuesday slashed its financial outlook for the full year after the company announced CEO John Foley will be stepping down, as part of a broader restructuring of the business.

It now sees fiscal 2022 revenue within a range of $3.7 billion to $3.8 billion, down from a prior range of $4.4 billion to $4.8 billion.

The company said it expects to end the year with about 3 million connected fitness subscribers, versus previous estimates of 3.35 million to 3.45 million.

“We are taking steps to best position Peloton for sustainable growth, while also establishing a clear path to consistent profitability,” Foley wrote in a letter to shareholders.

For the three-month period ended Dec. 31, Peloton reported a net loss of $439.4 million, or $1.39 per share, compared with net income of $63.6 million, or 18 cents a share, a year earlier.

Total sales grew about 6% to $1.13 billion from $1.06 billion a year earlier. Peloton had reported preliminary second-quarter sales figures in late January.

Revenue in Peloton’s connected fitness segment, which includes contributions from its manufacturing business Precor, fell 8% from year-ago levels to $796.4 million. This division makes up about 70% of Peloton’s total revenue.

Subscription revenue grew a whopping 73% to $337.5 million, making up the other 30% of total sales.

Peloton ended the quarter with 2.77 million connected fitness subscribers. These are people who own a Peloton product and also pay a monthly fee to access the company’s digital workout content. 

For its third quarter, Peloton anticipates sales between $950 million and $1 billion. It expects to end the period with 2.93 million connected fitness subscribers.

Peloton shares climbed around 9% in early trading, bringing the company’s market cap to about $10.7 billion.

Read the full quarterly earnings press release from Peloton here.