Peloton Overhaul Outlook Tops Estimates

Peloton Raises Forecast with a Strong Holiday Quarter Outlook

Peloton shares surged up to 12% after the company announced a holiday quarter forecast that exceeded expectations. This comes as Peloton works to reposition itself as a comprehensive wellness brand and return to profitability following its first hardware update in several years.

Revenue Forecast Exceeds Wall Street Estimates

Peloton projected revenue between $665 million and $685 million for the three-month period ending in December. This outlook surpasses Wall Street’s estimate of approximately $661 million for the company’s fiscal second quarter.

CEO Comments on Growth and Innovation

“Our continued momentum on bottom line performance sets the stage for improvements on the top line as we progress through the fiscal year, fueled by our commitment to innovation and growing the Peloton community,” said Chief Executive Officer Peter Stern.
He added, “I’m confident in the company’s ability to execute its strategic plan, return Peloton to profitable growth, and extend Peloton’s lead in connected fitness and wellness.”

Recall Impact on Peloton's First Quarter

Earlier this week, Peloton recalled approximately 877,800 units of its high-end Bike+ model in the US and Canada after reports surfaced of seat posts breaking and causing riders to fall. This recall resulted in a $13.5 million cost during the first quarter.

Stock Performance

Peloton's shares closed at $6.71 in New York, marking a 22.9% decline so far this year through Thursday’s close despite the recent positive forecast.

Summary: Peloton's optimistic holiday forecast and strategic repositioning as a wellness brand signal a potential turnaround, despite recent challenges from a costly product recall and stock declines.

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