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Peloton Sales Tumble Again, but Quarterly Losses Narrow


Peloton Interactive Inc.

PTON -1.33%

reported a steeper-than-expected 23% drop in quarterly sales, but the company also narrowed its losses after slashing jobs and restructuring its operations.

Revenue declined to $617 million in the quarter ended Sept. 30, coming in below the company’s forecast of $625 million to $650 million. Executives estimated sales for the current quarter, which includes the crucial holiday selling season, could be roughly 37% lower than a year ago.

Peloton shares tumbled 17% in premarket trading to near $7. The stock had fallen nearly 95% since hitting a high of $160 in December 2020.

The maker of internet-connected exercise machines also showed signs of improvement. Peloton’s $408.4 million loss was far smaller than last quarter’s $1.3 billion loss. And the company’s operations burned through $246 million, down from negative cash flow of $412 million and $747 million in the prior two quarters.

Peloton CEO

Barry McCarthy,

in a letter to investors, said the company’s turnaround is ahead of schedule, citing improvements to cash flow and restructuring moves he has implemented since taking over in February.

“For the last nine months my goal has been to turn around Peloton and position it for sustained growth and scale,” Mr. McCarthy said. “I thought it would take a year. We are beating that timeline.”

Mr. McCarthy said he still expects to reach break-even cash flow by June, the end of the company’s fiscal year.

Peloton has been on a wild ride, announcing its CEO was stepping down and thousands of jobs would be cut, despite seeing a surge in sales early in the pandemic. Here’s why Peloton became a viral success, and why it is spinning out now. Photo illustration: Jacob Reynolds

Demand for Peloton’s bikes and treadmills has plunged, and the company’s count of people who subscribe to its fitness classes stagnated after growing fourfold since early 2020. The company had about 3 million subscribers to its connected fitness services at the end of the September quarter, little changed from June and a number the company expects will remain relatively unchanged in the current quarter.

The company has laid off more than half its workforce since last year, with the most recent reductions announced in early October. It has outsourced all its manufacturing operations and is experimenting with varied pricing models for equipment and subscriptions.

Peloton also has rolled out many initiatives, including selling its exercise equipment at

Dick’s Sporting Goods Inc.

and through Inc.’s

e-commerce platform stores, and putting bikes in all 5,400 Hilton-branded U.S. hotels. It has also begun selling a new rowing machine.

Write to Sharon Terlep at [email protected]

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