Peloton Reports Best Quarterly Performance in a Year — Retail Bum

Peloton narrowed its year-over-year net loss for a third quarter in a row, with subscription revenue outpacing sales of its hardware products once again.

The company reported a net loss of $335.4 million, down from $439.4 million a year before, marking its narrowest loss since fiscal Q4 2021. Meanwhile, revenue fell by 30% to $792.7 million, but it still exceeded Peloton’s projection of $700 to $725 million.

“This was by far our best quarterly performance in my twelve months with Peloton,” said CEO Barry McCarthy.

“Most of the executive team is also relatively new to Peloton and new to their teams. Given what we’ve already accomplished, imagine what’s possible once the team finds its groove.”

The company expects its subscription revenue to continue to perform better than hardware products such as Bikes, Treads, and others. According to CNBC, the gross margins of subscription sales were 67.6%, while those for connected equipment were at -11.2%.

“This is the time of year when, if we’re going to sell a lot of hardware, we have so you would expect there to be lots of hardware-related revenue, and you would expect that maybe that revenue would exceed subscription,” McCarthy said. “It didn’t. It’s why in the letter [to investors], I call it out, as it may be a turning point.”

Originally published at https://retailbum.com on February 1, 2023.