Latest news with #PeterStern
Forbes
2 days ago
- Business
- Forbes
Peloton Outperforms, Plans More Micro-Stores And Pedals Back On Costs
Fitness brand Peloton surprised the market this week when it posted a profit for its fiscal fourth quarter and it laid out a strategy to build on cost reductions and return to growth. Under CEO Peter Stern, the company recorded a net income of $21.6 million, compared with a loss of $30.5 million in the year prior, largely thanks to better-than-expected sales but also lower operating expenses, which Stern warned in a communication to shareholders remained too high in his opinion. The company's recorded net income of $21.6 million for the three-month period to June 30, equivalent to 5 cents per share, compared with a loss of $30.5 million, or 8 cents per share, a year earlier. Sales fell 6% year-on-year to $607 million. Peloton is also planning to grow its micro-stores, having reduced its larger stores portfolio from 37 to 13 by the end of the fourth quarter. Peloton is looking to expand its micro-stores from one to 10, plus expand its preowned secondary marketplace. 'We plan to support our members' wellness journey by expanding our offerings and strength where we are already a category leader, mental wellbeing, sleep, recovery, and over time, nutrition and hydration,' Stern said on an earnings call Thursday. 'We will employ advanced technologies like AI to enhance our ability to serve as personalized coaches.' Peloton To Reduce Costs For fiscal 2026 starting July, the company said that it plans to reduce run-rate expenses by another $100 million, over and above the $200 million it had already cut in fiscal 2025. Half of those reductions will come from indirect costs, like renegotiating contracts, but the other half will come from reducing staff levels by 6% the company said, just over a year after it confirmed plans to cut 15% of its staff head count. 'Our operating expenses remain too high, which hinders our ability to invest in our future. 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,' Stern said. Investors responded well to the announcement and the latest figures, eight months into Stern's tenure, as his strategy starts to show signs of working. While the share value is 20% off from the start of the year, the value has at least stabilized and enjoyed a short-lived spike on yesterday's announcements. Peloton Debt Restructure Peloton restructured its debt last year and in fiscal 2025 its net debt declined by $343 million, a 43% drop compared with the year-earlier period, bringing net debt to $459 million allowing for cash and cash equivalents. For Peloton's current quarter, it forecast sales between $525 million and $545 million, below the $560 million analysts anticipated, but for the full year its projection of between $2.4 billion and $2.5 billion tallies with expectations. Peloton also outperformed on bike and treadmill sales, posting connected fitness revenue for Q4 of $198.6 million, well above projections of $170.3 million. Peloton's gross margin for hardware was 17.3%, up 9% on the year prior. However, the new 50% tariffs imposed by the Trump administration on aluminium, plus other duties, mean Peloton is expecting tariffs to hit free cash flow by $65 million and in Stern's letter to shareholders, he said the company will have to rework promotions and adjust prices to reflect these higher costs. 'Internationally, we plan to deliver local, in-language experiences using a mix of native instruction, AI dubbing, and more flexible approaches to music for thousands of classes,' Stern said. 'Through partnerships, we aim to introduce the Peloton brand and experiences to millions of people around the world. Together, we believe these actions lay the groundwork for future, cost-effective launches of the full Peloton offering in new geographies.'
Gizmodo
3 days ago
- Business
- Gizmodo
Peloton Is Cutting Jobs and Shifting Focus to Members' ‘Entire Wellness Journey'
Peloton, the struggling New York-based fitness tech company, announced today that it plans to cut roughly six percent of its workforce in an effort to save costs and turn the company around. Additionally, the company's new CEO, Peter Stern, told investors that the company would be expanding beyond its cardio roots and into the general health and wellness space. '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,' wrote Stern in a letter to shareholders published along with the company's most recent quarterly earnings report. As of last summer, Peloton had about 2,300 employees, so these latest cuts could affect about 140 workers. The company previously laid off 15% of its workforce in May 2024 when it got rid of its previous CEO. Despite swinging a profit in the most recent quarter, Peloton reported that its sales dropped 6% and are expected to fall even further this year. Peloton launched in 2012 as a premium fitness brand, offering pricey exercise bikes, treadmills, and rowing machines with built-in screens that stream live and on-demand workout classes. The company really hit its stride during the covid-19 pandemic, when gyms were closed and people were scrambling for ways to stay active at home. Unfortunately, that wave didn't last. As life returned to normal after the pandemic, so did people's workout routines outside the home. The company's stock has dropped 95% from its early 2021 peak of nearly $170 a share to around $7 today. Stern joined the company earlier this year after stints leading services teams at Ford and Apple. Today, he told investors that he sees the company moving beyond just cardio exercise. 'In our next chapter, we will build upon our leadership in cardio to support our Members' entire wellness journey, accelerating our progress in strength and mobility and exploring new frontiers in mental wellbeing, sleep and recovery, nutrition and hydration,' Stern wrote in the letter. Stern told investors on a call Wednesday that this could include more personalized training programs, new meditation and sleep features, and potentially content focused on nutrition. He also added that AI could play a role in the company's comeback. Stern said that the company could leverage AI by linking its platform with users' personal health tracking devices to offer more personalized insights, action plans, and recommendations. Last week, Peloton also expanded one of Stern's other initiatives — a new marketplace for users to resell their exercise equipment. At the Bloomberg Tech conference in June, Stern said the new marketplace is a key part of Peloton's turnaround strategy. He said the secondhand market was one of the most effective ways for the company to bring in new members.
Yahoo
3 days ago
- Business
- Yahoo
Peloton Just Shocked Wall Street -- And It's Not About a New Bike
Peloton (NASDAQ:PTON) shares jumped by nearly 12% at 8.53am in premarket after the company posted a surprise profit and rolled out a tighter cost-control strategy that could reshape its post-COVID narrative. CEO Peter Sternwho joined in January after a stint at Fordhas been aggressively reshaping the business to combat sluggish demand for its high-end bikes and treadmills. That effort appears to be gaining momentum. Q4 revenue came in at $606.9 million, beating analyst estimates of $579.8 million. Even more notably, earnings landed at 5 cents per share, ahead of the expected 6-cent loss. Warning! GuruFocus has detected 7 Warning Signs with PTON. Signs of operational progress are emerging across the board. Peloton plans to cut 6% of its global workforce, relocate select offices, and slash indirect costsmoves that could save $100 million over the next fiscal year. The company's focus on profitability is already showing up in the numbers: operating expenses dropped 20% year over year, and general and administrative costs were down 33%. Gross margin from connected fitness products improved by 900 basis points to 17.3%, helping drive a 96% increase in gross profit for the segment. These improvements suggest Stern's playbook may be starting to deliver. Looking ahead, Peloton expects fiscal 2026 revenue to land between $2.4 billion and $2.5 billionslightly ahead of the $2.41 billion Wall Street was modeling, according to LSEG. However, the company flagged a potential $65 million hit to free cash flow due to tariffs and said it plans to offset that through price adjustments. While the road back to growth may still have hurdles, investors may view this update as a meaningful step forward. The turnaround story isn't done, but it's no longer on pause. This article first appeared on GuruFocus. Sign in to access your portfolio
The Verge
3 days ago
- Business
- The Verge
Peloton pivots to wellness alongside another layoff
Peloton has pivoted many times over the past few years in its quest to return to profitability. The latest, as announced in its Q4 2025 earnings call, is leaning into health and wellness instead of 'just' cardio fitness. 'With each passing year, we are coming to understand better the importance of strength, stress management, sleep, and nutrition to living our best lives,' CEO Peter Stern said during the call. 'This creates the opportunity, no more than that, the mandate, for Peloton to evolve from being a cardio fitness partner to becoming the world's most trusted wellness partner across the full array of behaviors that maximize health demand.' He went on the explain that the company will focus on 'health span', or the period of life a person lives in good health. 'Advances in medical science contributed to the prolonging of life here in the US by a remarkable 40 years from 1900 to 2020,' Stern says. 'However, as life span has increased, health span, the quality as opposed to quantity, of those years has failed to keep up. People are living longer but they're also living sicker in the U.S.' Health span isn't a new concept. Whoop also just released a Health Span feature with its latest tracker earlier this summer. Peloton's take on improving wellness will reportedly involve investing more in its personalized training programs, the standalone Strength Plus app, as well as meditation and sleep features. Stern also said that Peloton would test and iterate on bringing nutritional content to its platform. In a shareholder letter, Stern highlighted using AI and integrating with health tracking devices as a means to provide 'increasingly personal insights, plans, and recommendations' to its members. On the business side, Peloton exceeded investor expectations in all metrics. It posted $607 million in revenue, roughly $21 million above the top end of its expected guidance range. Connected paid fitness subscriptions and paid app subscriptions also exceeded targets, posting 2.8 million and 552,000, respectively. Peloton shares rose roughly 11 percent on the news, but Stern noted that the company's operating expenses were still too high. As a result, Stern says the company will undergo another cost restructuring plan that includes laying off about six percent of its workforce. '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,' Stern writes in the shareholder letter. This marks the company's sixth round of layoffs, coming a little over a year after the company laid off 15 percent of its workforce and former CEO Barry McCarthy stepped down. Peloton also plans to adjust pricing. That includes a new assembly fee for its hardware, which was previously free with purchase. (There will still be a free option for self-assembly.) The company also plans to introduce a new Special Pricing program to make its products more affordable for teachers, military personnel, first responders, and medical professionals. Posts from this author will be added to your daily email digest and your homepage feed. See All by Victoria Song Posts from this topic will be added to your daily email digest and your homepage feed. See All Business Posts from this topic will be added to your daily email digest and your homepage feed. See All Fitness Posts from this topic will be added to your daily email digest and your homepage feed. See All Gadgets Posts from this topic will be added to your daily email digest and your homepage feed. See All News Posts from this topic will be added to your daily email digest and your homepage feed. See All Wearable
Yahoo
3 days ago
- Business
- Yahoo
Peloton Stock Jumps as Firm Posts Unexpected Profit, Announces Layoffs
Shares of Peloton Interactive (PTON) surged Thursday as the connected fitness company swung to a surprise fiscal fourth-quarter profit and announced a restructuring plan that includes layoffs. Peloton, known for its stationary bikes and other exercise equipment, reported a GAAP profit of 5 cents per share when a loss of 5 cents per share was expected by analysts surveyed by Visible Alpha. Revenue of $606.9 million fell 6% year-over-year but topped estimates. "Our operating expenses remain too high, which hinders our ability to invest in our future," CEO Peter Stern wrote in a 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. 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." For fiscal 2026, Peloton sees revenue of $2.4 billion to $2.5 billion, with the midpoint above consensus estimates. Peloton shares advanced 10% shortly after the opening bell but remain roughly 10% lower this year. Read the original article on Investopedia
