Peloton Interactive Inc. shares fell on Tuesday after the company reported a decline in sales and provided a cautious outlook for the home fitness sector.
The fitness equipment and streaming company posted third-quarter revenue of $600 million, down 27% year-over-year, while net losses widened to $340 million. Subscription revenue, a key metric for Peloton, dropped 15% to $420 million. The company attributed the decline to softer consumer demand and increased competition in the home fitness market.
Peloton also lowered its full-year revenue guidance, now expecting sales between $2.4 billion and $2.6 billion, down from a prior range of $2.7 billion to $2.9 billion. Chief Executive Officer Barry McCarthy emphasized that the company is navigating a "challenging macro environment" and is focusing on cost-cutting measures to improve profitability.
Analysts at JPMorgan reduced their price target on Peloton to $2 from $3, citing concerns over sustained weak demand and the company's ability to regain market share. The stock, which has fallen nearly 80% over the past year, was down 5% in premarket trading following the results.
Peloton's struggles reflect broader challenges in the home fitness industry, where demand has softened after a pandemic-driven surge. The company continues to face pressure from rivals offering lower-cost alternatives and flexible subscription models.
