Peloton’s Quarterly Loss Tops $1.2 Billion as Bike, Treadmill Sales Plunge

Peloton Interactive Inc PTON 20.36%▲.  posted losses of more than $1.2 billion in the most recent quarter as  revenue plunged, and the maker of bikes and treadmills warned it would  spend more cash than it brings in for several more months

Chief Executive Barry McCarthy, who took over in February, said the company is taking steps to shore up finances, from sweeping layoffs to outsourcing manufacturing of its fitness equipment.

Peloton lost $2.8 billion in the year ended June 30, compared with a $189 million loss in the prior year.

“The naysayers will look at our [fourth quarter] financial performance  and see a melting pot of declining revenue, negative gross margin, and  deeper operating losses.

They will say these threaten the viability of the business,” Mr. McCarthy said in a letter to shareholders.

“But what I see is significant progress driving our comeback and Peloton’s long-term resilience.”

Demand for Peloton’s bikes and treadmills has dropped, and the company’s  subscriber count, which grew fourfold during the height of the Covid-19  pandemic, rose by just 4,000 in the quarter ended June 30.

Revenue for the fourth quarter fell to $679 million, nearly a 30% drop  from a year ago as declining exercise-equipment sales more than offset  higher revenue from subscriptions.

The company’s restructuring and operations burned through another $412  million in cash in the June quarter, after going through $650 million in  each of the prior two periods.

It ended June with $1.25 billion in cash reserves and a $500 million credit line.

One of the pandemic’s biggest winners, Peloton has struggled to adapt as Americans revert to prepandemic habits and tighten spending amid inflation near its highest level in decades.