Peloton sees profitability hit as it slashes bike price

FILE PHOTO: A Peloton exercise bike is seen after the ringing of the opening bell for the company’s IPO at the Nasdaq Market site in New York City, September 26, 2019. REUTERS/Shannon Stapleton/File Photo

(Reuters) – Peloton Interactive Inc said on Thursday a decision to slash the price of its flagship bike by a fifth would hit near-term profitability, sending its shares down 15% in extended trading.

The fitness equipment maker also reported a larger fourth-quarter loss than expected and forecast first-quarter revenue of $800 million, below market estimates of $1.01 billion.

The price cut to $1,495 from $1,895 for its Peloton Bike across all markets and a shift in product sales mix to its treadmill weighed on the outlook.

“Looking ahead, we expect to return to Adjusted EBITDA profitability for FY 2023,” Peloton said in a statement.

The New York-based company posted a net loss attributable to Class A and Class B shareholders of $313.2 million, or $1.05 per share, compared with a profit of $89.1 million, or 27 cents per share, a year earlier.

Analysts on average were expecting a loss of 45 cents per share, according to IBES data from Refinitiv.

Peloton’s fourth-quarter revenue rose 54% to $936.9 million.

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