Truist upgrades Peloton stock, says 'the BS' has been cleaned up
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Miami Herald
a day ago
- Miami Herald
Peloton delivers harsh message to employees amid sales declines
Peloton experienced massive growth during the COVID-19 lockdowns, reaching record-high sales, subscriptions, and stock value. Despite being founded just seven years earlier, it quickly became a pandemic-era success story. However, the momentum didn't last forever. As restrictions eased and gyms reopened, the demand for at-home workout equipment declined sharply, causing Peloton's business to struggle since 2021. Don't miss the move: Subscribe to TheStreet's free daily newsletter To rebound from these alarming declines and stabilize its business, the company has aggressively reduced costs. In fiscal 2025, Peloton cut overall expenses by 25%, scaling back spending on sales, marketing, research and development, and administrative functions. It also closed 24 of its 37 retail showrooms, shrinking its physical footprint to 13 locations by the end of the fourth quarter. Related: Peloton CEO believes cost-cutting can help reverse slide Last year, Peloton took even more drastic steps by laying off around 15% of its global workforce to align its spending with its revenue. The cost-cutting continued into the fourth quarter of fiscal 2025, during which the company trimmed expenses by 20% and slashed its debt by 43%. After months of budget restructuring and layoffs, these efforts have begun to show improvements in Peleton's business. Peloton (PTON) beat analysts' expectations and its own in its latest quarter, reporting a net income of $21.6 million, compared to a loss of $30.5 million the year prior. However, rebuilding a multi-million-dollar business is no easy task, and challenges remain. More Retail News: Tariffs will cost the liquor industry over $2 billion in salesApplebee's hits first major milestone since 2023 after sales declinesStarbucks plans major change to how it adds new menu items The company's total revenue dropped 6% year over year, driven by lower sales and deliveries, with Paid Connect Fitness Subscriptions decreasing 6%. While Peloton has been progressing towards stability, these results show that more cuts are necessary to keep its business alive, which led it to make another difficult decision. Peloton announced it will lay off around 6% of its workforce as part of its restructuring plan to minimize costs, as the expenses have begun to take a toll on the company's ability to invest in its future. "Our operating expenses remain too high, which hinders our ability to invest in our future," Peloton wrote in its shareholder letter. "Today, we are launching a cost restructuring plan intended to achieve at least $100 million of run-rate savings by the end of FY26 by reducing the size of our global team, paring back indirect spend, and relocating some of our work." Related: Peloton creates new way for consumers to get cheaper equipment This move aligns with a wave of recent layoffs in the U.S. According to Challenger, Gray & Christmas, 62,075 jobs were cut in July, up 29% from June and 140% higher than last year. So far this year, companies have announced over 806,000 job cuts, the highest since July 2020. Peloton ended its letter stating, "This is not a decision we came to lightly, as it impacts many talented team members, but we believe it is necessary for the long-term health of our business." Related: Veteran fund manager unveils eye-popping S&P 500 forecast The Arena Media Brands, LLC THESTREET is a registered trademark of TheStreet, Inc.
Yahoo
a day ago
- Yahoo
Goldman Sachs upgrades Peloton on turnaround potential
-- Goldman Sachs upgraded Peloton (NASDAQ:PTON) to Buy from Neutral and raised its price target to $11.50 from $7, saying the company's new strategy could put it on a path to revenue and cash flow growth over the next 12 to 18 months. The brokerage cited several shifts in Peloton's business, including a move beyond fitness into broader wellness offerings, and an effort to personalize the user experience through potential coaching features. While specifics are limited, Goldman said the focus on new product experiences and distribution—such as micro-stores, travel partnerships, and expansion into education and international markets—could help widen Peloton's reach. The firm also noted improvements in hardware growth and margins, better monetization of the subscriber base, and tighter control of operating costs in the company's fourth-quarter results. Management forecast over $200 million in free cash flow for fiscal 2026, which Goldman said points to ongoing progress in stabilizing the business. Looking ahead, Goldman said it sees scope for Peloton to return to revenue growth by mid-FY26, with potential for that to accelerate. It also flagged long-term benefits from expanding into wellness trends and offering app-based services to users without Peloton hardware. The upgrade reflects a view that new leadership and clearer execution on the updated strategy could restore investor confidence and drive a positive revision cycle in earnings and margins. Related articles Goldman Sachs upgrades Peloton on turnaround potential If Powell goes, does Fed trust go with him? 7 Undervalued Stocks on the Rise With 50%+ Upside Potential Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Business Insider
2 days ago
- Business Insider
Barnes & Noble Education receives NYSE notice of non-compliance
On August 4, Barnes & Noble Education received notice from the New York Stock Exchange that the company is not in compliance with Section 802.01E of the NYSE Listed Company Manual due to a delay in filing its Annual Report on Form 10-K for the fiscal year ended May 3, 2025, with the SEC. The company determined that it would not be able to file the Form 10-K within the 15-day extension period under Rule 12b-25 without unreasonable effort or expense due to an audit committee internal investigation that rendered management unable to complete the company's financial reporting process and preparation of its financial statements for the fiscal year ended May 3, 2025. Accordingly, the company is working diligently to complete the necessary work to make the filing as soon as practicable and currently anticipates filing the Form 10-K within the six-month period granted by the notice from the NYSE, which will bring the company back into compliance with the NYSE listing standards.
