said Thursday it plans to cut the price of its bike again and reported a larger-than-expected quarterly loss, which caused its shares to slip in after-hours trading.
The digital fitness company that sells high-quality bikes and treadmills in sync with its membership is slashing the price of its flagship bike from $1,895 to $1,495. Memberships still cost $39.99 per month. Nearly a year ago, the price of its bike was slashed by $350 when the company launched its more expensive Bike+ for $2,495.
Peloton (ticker: PTON) also reported a fourth-quarter fiscal net loss of $312.2 million, or $1.05 per share. Wall Street’s consensus estimate saw a net loss of 44 cents per share, according to FactSet. Revenue of $937 million was also above consensus estimates at $928.6 million. Peloton reported adjusted earnings before interest, taxes, depreciation and amortization of $45.1 million, slightly less than the $46 million analysts had expected.
The company expects first fiscal quarter revenue of $800 million, well below the $1 billion analysts had previously forecast, according to FactSet.
Peloton shares fell 11% to $101 in after-hours trading after the results were released. The stock had already fallen 24% so far during the wider reopening trade.
Peloton said the price cut will make the bike more accessible. Analysts originally applauded the company’s decision last year to lower the price of the device, arguing it would expand Peloton’s market. It has invested in logistics capabilities and plans to have a $400 million plant operational in the US by 2023.
The company also said it is expanding the financing offer for its Bike+ to $59 per month for 43 months at a 0% annual rate, compared to a previous $64 per month for a 39-month plan. It will provide the same funding for the Peloton Tread, the lower-cost treadmill that launches on August 30 in the US, Canada and the UK. An earlier version of the Tread was not widely released and was voluntarily recalled alongside the Tread+ in May. The Tread+ specifically made headlines after the death of a child and over 70 other reported incidents.
“We’ve worked hard to make sure the new tread really takes off in members’ homes,” CEO John Foley said earlier this week. “We will always continue to innovate our hardware, software and security features to deliver on our commitment to member safety and improving the entire member experience.”
The company ended the quarter with 2.33 million affiliate fitness subscribers, up 114% year-over-year and above consensus estimates of 2.28 million.
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