Peloton shares have tumbled after the fitness tech brand reported a wider-than-expected quarterly loss and warned it expects to sign up fewer members for the year.
The shares fell by 15% in morning trading after initially climbing on the stronger-than-expected forecast for fourth-quarter revenue.
Last year, the brand‘s shares had tanked 78% as demand for its bikes slumped with people returning to gyms after the pandemic.
Revenue from the sale of connected products and subscription to fitness programs is also under pressure due to a difficult economy.
“We’re definitely uncertain about what’s next in terms of the economic environment,” Peloton chief executive Barry McCarthy said.
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The firm said it expects 3.08 million to 3.09 million members in fiscal 2023 connected fitness subscriptions, compared with FactSet estimates of 3.095 million, and the 3.11 million reported in the third quarter ended March 31.
Peloton also guided a net decline in fourth-quarter memberships for the first time, despite pointing to seasonality.
McCarthy has taken a number of measures to cut costs which have included layoffs, store closures, selling equipment on third-party platforms such as ecommerce behemoth Amazon.
The company’s Q3 cash burn slowed down to $55.3 million from $747 million a year earlier.
Peloton chief financial officer Liz Coddington said: “We actually are pretty close within striking distance of achieving free cash flow breakdown”.
Peloton forecast fourth-quarter revenue between $630 million and $650 million, above estimates of $607.7 million.