Coronavirus Helps Peloton Shares Explode

With the coronavirus pandemic having more people staying indoors, sales of fitness equipment have been skyrocketing.

Smart fitness maker Peloton has seen its sales explode 66% as more people have been buying the company’s bikes during the coronavirus lock down. Sales hit $524.6 million during the third quarter. This is compared to $316.7 million a year ago.

The company also revealed that it had its largest class ever, with more than 23,000 people streaming it from home.

Peloton’s spinning bikes run for $2,245 and a treadmill for $4,295. They are predicted to be one beneficiary
during the Covid-19 pandemic. According to founder and Chief Executive Officer John Foley, the pandemic is going to change consumers’ exercise routines for the long term.

For the third quarter, Peloton revealed earnings per share at a loss of 20 cents. The company said the loss was primarily due to nonrecurring litigation and settlement expenses.

Analysts were expecting the company to report a third-quarter loss of 17 cents, adjusted, on revenue of $487.7 million, according to a poll by Refinitiv.

Looking ahead for the full 2020 fiscal year, Peloton has forecast total revenue to reach between $1.72 billion and $1.74 billion, which would represent a year-over-year increase of 89% at the midpoint of that range.

Previously, the company was expecting a range of $1.53 billion to $1.55 billion.

The company said it ended the quarter with a connected fitness subscriber base of more than 886,100 people, representing a 94% growth YOY.

Foley said on the earnings call, “As you might imagine however, the shelter-in-place and work from home realities have created a meaningful tailwind for Peloton and a broader ongoing consumer shift toward that home fitness experiences. While this tailwind is undeniably positive for our business financially, we are more proud of our member growth, the increased engagement of our members on our platforms, and the feedback we’ve received from our members about how Peloton has helped them maintain their physical and mental well-being in these difficult times.”

“Specifically, we ended the quarter with over 886,000 Connected Fitness Subscribers, representing 94% year-over-year growth. Member count is now over 2.6 million inclusive of 176,000 Peloton Digital subscribers. Over the past year, we’ve seen steady gains in member engagement as we’ve expanded content verticals and launched new member experiences. With so many members now under stay at home orders, this quarter saw an even larger gain than expected. Our Connected Fitness Subscribers logged 44.2 million workouts with us in the quarter up from 18.0 million workouts in the same period last year, representing 145% year-over-year growth. On a subscriber basis that is 17.7 average monthly workouts per Connected Fitness Subscriber compared to 13.9 workouts in the same period last year. With this growth the value proposition of our platform has never been stronger. This incredible engagement with our Connected Fitness products led to our lowest level of churn in four years. For the quarter, our average net monthly Connected Fitness churn was 0.46%,” he added.

Disclaimer: We have no position in Peloton Interactive Inc. (NASDAQ: PTON) and have not been compensated for this article.