Peloton Interactive Inc (PTON.O) on Thursday slashed its full-year sales forecast by up to $1 billion, saying demand for its exercise bikes and treadmills was slowing faster than expected as people return to pre-pandemic habits.
Its shares dove 31% in extended trading, on course to wipe off about $8 billion from the market value of a company that was among the biggest corporate winners of last year’s lockdowns.
“It is clear that we underestimated the reopening impact on our company and the overall industry,” Chief Financial Officer Jill Woodworth said on a post-earnings call.
Peloton now expects annual sales between $4.4 billion and $4.8 billion, compared with $5.4 billion previously. Its holiday-quarter sales forecast also missed market expectations.
“People are no longer trapped at home and competition is growing,” BMO Capital Markets analyst Simeon Siegel said.
Rising vaccinations and easing curbs have encouraged people to go back to gyms this year, hitting Peloton’s growth and boosting the earnings of chains like Planet Fitness Inc (PLNT.N).
The company has tried to cushion the blow by cutting the price of its popular bike by $400 and ramping up its ad spending. But its sales rose just 6.2% in the three months to Sept. 30, the slowest pace since in more than a year.
Sales and marketing expenses more than doubled to account for 35.3% of total revenue in the first quarter and were expected to remain high in the crucial holiday period.
Peloton has also grappled with global chip crunch, supply disruptions and rising freight costs that have piled on the expenses.
That in part plunged it to a net loss of $376 million, from a profit of $69.3 million a year earlier.