Peloton
Peloton just released its Q1’FY24 earnings report; revealing a look into its turnaround effort.
The good:
- Improving on inventory, net loss was $159.3M, down from a $408.5M loss last year.
- It expects $10M from its content partnership with lululemon next quarter.
- Peloton expects 20% growth in its FY24 for international markets, led by the UK and Germany.
The bad:
- Quarterly sales were $595.5M, down from $616.5M during the same quarter in ’22.
- It’s expecting $715 –750M for its holiday quarter, 8% lower than last year’s holidays.
- Next quarter, Peloton expects a 21% YoY slide in paid app subscriptions with 12% churn.
What it means: The connected fitness company is struggling to convert free app users into paying customers, and US demand for its full-price hardware might be tapped out.
TBD. While its bike rental program is seeing marginal success—33% of all Bike sales were rentals—CEO Barry McCarthy is particularly hot on the Tread+.
The product’s safety recall set them back $40M, but he’s confident in its relaunch, saying its users are “exponentially more emotionally engaged” than with anything else Peloton has ever made.
Takeaway: While the company has been busy announcing new partnerships and content deals, it still has to translate those press releases into recurring revenue as its turnaround effort continues.
