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Peloton CEO says company is taking ‘significant corrective actions’

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John Foley (co-founder, chief executive officer, Peloton Interactive Inc.) poses for photographs during Peloton Interactive Inc.’s initial public offer (IPO). This was taken in front of Nasdaq in New York, U.S.A, Thursday Sept. 26, 2019.

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PelotonAccording to Thursday’s announcement, its fiscal second-quarter revenues will remain within the previously projected range due to its efforts in reducing costs and improving profitability. 

The company did add fewer subscribers than expected in its latest period, however, it stated in a press releasePre-announced its financial results. Peloton expects 2.77 million subscribers to its fitness service to be connected by the end of quarter, up from 2.85 million and 2.8 million respectively.

Expected net monthly turnover to average 0.79% for this quarter. This is slightly lower than its 0.82% reported for the first quarter, and slightly higher than the 0.76% recorded in the previous year.

The company sees total second-quarter revenue of $1.14 billion, versus its prior guidance of $1.1 billion to $1.2 billion.

Peloton also stated that the adjusted loss before interest taxes, taxes, amortization and depreciation would be between $270 million and $260 million. This is in contrast to prior guidance of a loss of 325 to 350 million.

Follow a list of announcements from the company on Thursday CNBC report that the connected fitness maker is temporarily halting production of its products.

John Foley, Chief Executive Officer, stated that “as we discussed last year, we are taking substantial corrective measures to improve our profitability outlook, and optimize our costs throughout the company.” This includes gross margin improvement, moving to more variable costs and identifying cuts in operating expenses, as we build a stronger Peloton going forward.

He added that Peloton will have more to share when it reports its fiscal second-quarter earnings on Feb. 8.

Peloton has released the complete press release here.

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