Shares in Peloton Interactive plunged as much as 20% to a record low after the fitness company reported a deeper loss than predicted and cut its revenue guidance, dashing hopes that the onetime pandemic darling will soon pull out of a slump.
After posting disappointing quarterly results, Peloton offered an outlook with little to relish — demand for its once-hot stationary bikes continues to soften, and some subscribers may balk at proposed price increases.
Delivery costs also are squeezing margins, and the company will likely be mired in losses for years.
Peloton also signed a deal with JP Morgan Chase and Goldman Sachs to borrow $750m in five-year term debt, underscoring its challenges.
“Turnarounds are hard work,” chief executive Barry McCarthy said in a letter to shareholders.
The results suggest Peloton’s comeback effort is still a long way from taking hold, despite a shake-up earlier this year.
In February, co-founder John Foley was ousted as CEO after sales slowed and Peloton struggled to manage its production.
He was replaced by Mr McCarthy, the former finance chief at Spotify and Netflix, who vowed to cut costs and generate more of Peloton’s revenue from subscriptions.
So far, it’s been an uphill fight.