Here’s how Peloton did during its fiscal second quarter compared with what analysts were expecting, based on a survey by Refinitiv:
Earnings per share: 18 cents vs. 9 cents, expected
Revenue: $1.06 billion vs. $1.03 billion, expected
For the three-month period ended Dec. 31, Peloton earnings grew to $63.6 million, or 18 cents per share, from a loss of $55.4 million, or 20 cents per share, a year ago. Analysts had been calling for Peloton to earn 9 cents a share, according to Refinitiv.
Revenue skyrocketed 128% to $1.06 billion from $466.3 million a year earlier, topping expectations for $1.03 billion.
For its current fiscal third quarter, Peloton forecasts sales to reach $1.10 billion. Analysts had been calling for $1.09 billion.
Investing in the supply chain
In the wake of the higher sales, Peloton now expects full-year revenue to top $4 billion, up from a prior forecast of more than $3.9 billion. Analysts had been calling for $3.95 billion.
The company kept its earnings outlook for fiscal 2021 unchanged.
Peloton said it continues to see robust demand for its products, and that it will make additional investments in its supply chain to ease bottlenecks, which could weigh on profits.
In a letter to shareholders, the company said it will be investing more than $100 million in air freight and expedited ocean freight over the next six months to help speed deliveries.
“While this investment will dampen our near-term profitability, improving our member experience is our first priority,” the company said.
Peloton said it still anticipates inventory levels to improve and delivery windows to shrink, thanks in part to its pending $420 million acquisition of exercise equipment manufacturer Precor. But, it said it expects its progress to be “slow but steady” for the rest of the year.
Chief Executive John Foley said Peloton remains “hopeful,” though, that an “acceleration in vaccine distribution and the broader opening of our economy” will prove to benefit the business in the months ahead.
Retention rates remain strong
Peloton ended its latest quarter with 1.67 million connected fitness subscribers, up 134% from the prior year. Connected fitness subscribers are people who pay a monthly fee to sync the company’s workout classes to their Peloton equipment, versus accessing the programs separately through a phone or tablet device and paying a smaller rate.
The company expects to have 2.28 million or more connected fitness subscriptions by the end of the fiscal year, up from a previous outlook for 2.17 million users.