Peloton to cut more jobs, forecasts strong 2026 revenue; shares rise
The company also posted a surprise profit for the fourth quarter. The layoffs, along with plans to slash indirect costs and relocate some offices, are expected to help save an additional $100 million by the end of its next fiscal year, Peloton said on Thursday.
CEO Peter Stern, who joined the company in January from Ford Motor, had kicked off the turnaround effort to address a slump in sales of Peloton's high-end stationary bikes and treadmills following a boom during the COVID lockdowns, when people were looking to work out at home.
In a sign the cost push was bearing fruit, operating expenses fell 20 per cent in the fourth quarter, while general and administrative expenses were down 33 per cent from last year.
Gross margin from its connected fitness products such as technology-enabled home exercise machines rose 900 basis points to 17.3 per cent from a year ago. Gross profit in the segment rose 96 per cent to $34.4 million.
Peloton posted quarterly profit of 5 cents per share, compared with Wall Street estimates for a loss of 6 cents per share.
The company forecast 2026 revenue in the range of $2.4 billion to $2.5 billion, higher than analysts' estimate of $2.41 billion, according to data compiled by LSEG.
The fitness company expects tariffs to dent its 2026 free cash flow expectations by $65 million, and said it will adjust prices to offset the impact of the extra costs.
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