Peloton shares drop 35% after the company slashes its forecast and institutes hiring freeze.
On November 4, Peloton (PTON) released its financial results for first quarter 2022, reporting weakening sales growth and slashing its forecast. As a result, shares dropped by 35%, resulting in a loss of $9 billion off its market value, according to CNBC.
In addition, Peloton today announced a hiring freeze effective immediately.
“Although we are pleased to have delivered first quarter results that modestly exceeded our guidance, a softer than anticipated start to Q2 and challenged visibility into our near-term operating performance is leading us to recalibrate our fiscal year outlook,” said Peloton, in a letter to shareholders.
Peloton bet big on the at-home fitness market and grew substantially in 2020.
In December 2020, Peloton acquired Precor for $420 million, with the goal of establishing its U.S. manufacturing capacity, boosting research and development capabilities, and accelerating penetration of the commercial market.
The company is now revising that forecast as more consumers return to gyms or purchase lower-priced at-home fitness options, according to CNBC.
For contrast, Planet Fitness (PLNT) has released a strong earnings report, according to CNN, “revealing that its membership levels nearly returned to its pre-pandemic peak of nearly 16 million. Its stock is up 25% for the year.”
To read the full analysis by CNBC, click here.