Peloton shares have jumped by 26.5 per cent after the embattled fitness company forecast current-quarter revenue above expectations.
The company forecast revenue for the current quarter between A$966 million and A$1 billion, compared to Wall Street estimates of A$965 million.
The company pulled in revenue of A$1.1 billion during the December quarter, but suffered net losses of A$469.7 million.
However, cash burn was majorly reduced, from over A$1 billion to just $135 million, and are on track to reach free cash-flow breakeven by year-end FY23.
“But strip out the costs of paying suppliers to settle obligations for parts we don’t need, and we generated positive FCF of approximately $8 million in Q2,” noted CEO and President Barry McCarthy.
“If you’ve been wondering whether or not Peloton can make an epic comeback, this quarter’s results show the changes we’re making are working.”
Those changes include reducing headcount for 5,000 people, outsourcing manufacturing, and last mile delivery, raising $750 million in bank debt, and reducing gross inventory by A$812 million over the past year.
The company also launched third party sales through Amazon and US retailer Dick’s Sporting Goods.
“Of course this has been a challenging year,” McCarthy said.
“The restructuring of our business touched the lives of many associates and friends, current and former team members, and investors alike, and not in a good way. We understand how fortunate we are to have come this far, this fast.
“And I know I speak for all of our employee team members when I say we’re committed to becoming the best version of ourselves so we can continue to empower our Members to become the best version of themselves.”
