Peloton Interactive Inc. (PTON) experienced a significant surge in pre-market trading on Thursday, with shares rising nearly 10% following the release of its fourth-quarter earnings report. This positive market reaction was fueled by the company’s reported slight sales increase and reduced losses.
Since the departure of former CEO Barry McCarthy, Peloton, now managed by two board members, reported a 0.2% sales growth for its fiscal fourth quarter. This marks the first instance of year-over-year revenue growth since the 2021 holiday quarter. Notably, the company’s quarterly losses shrank to $30.5 million, a significant decrease from the $241.1 million recorded in the same period last year.
Peloton’s sales climbed to $643.6 million, edging out the $642.1 million reported a year earlier and exceeding analyst expectations of $630.48 million, according to data from Benzinga Pro.
The company attributes its improved performance to the restructuring plan, which included a 15% reduction in its global workforce. Peloton has stated in a letter to investors that the search for a new CEO remains a top priority for all stakeholders.
However, Peloton’s outlook for the first quarter of FY25 is tempered by uncertainties surrounding the efficient growth of its Paid Connected Fitness and Paid App, along with the assumption that investments in new initiatives will not deliver subscriber growth within the fiscal year.
The company projected revenue for the next quarter to range between $560 million and $580 million, while adjusted EBITDA is expected to fall between $50 and $60, compared to the current quarter’s $70.3.
Despite the cautious outlook, Peloton’s recent earnings report signals a potential turning point for the company, with the restructuring plan starting to show positive results.
[Photo: courtesy of Peloton]
