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Peloton sees profitability hit as it slashes bike price

Fitness equipment-maker also reports larger fourth-quarter loss than expected

Peloton Interactive cut the price of its Peloton exercise bike from $1,895 to $1,495. Photograph: Getty Images

Fri Aug 27 2021 - 16:19

Peloton Interactive has said a decision to slash the price of its flagship bike by a fifth would hit near-term profitability, sending its shares down sharply.

The fitness equipment-maker also reported a larger fourth-quarter loss than expected and forecast first-quarter revenue of $800 million (€680.6m), below market estimates of $1.01 billion.

The price cut to $1,495 from $1,895 for its Peloton Bike across all markets and a shift in product sales mix to its treadmill weighed on the outlook.

“Looking ahead we expect to return to adjusted Ebitda profitability for the full year 2023,” Peloton said in a statement.

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Shares were trading close to 9 per cent weaker in early US trading on Friday.

The New York-based company posted a net loss attributable to Class A and Class B shareholders of $313.2 million, or $1.05 per share, compared with a profit of $89.1 million, or 27 cent per share, a year earlier.

Analysts on average were expecting a loss of 45 cent per share, according to IBES data from Refinitiv.

Peloton’s fourth-quarter revenue rose 54 per cent to $936.9 million. – Reuters

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