New York (CNN Business)Peloton’s rough road to recovery continues. The fitness company’s quarterly revenue came in below Wall Street estimates, signaling that its recently launched turnaround effort will take more time to revive sagging sales.
Losses amounted to $1.2 billion for the three-month period ending June 30. Revenue also fell nearly 30%, to $678 million, compared to $936 million the year prior. The company’s shares tumbled nearly 20% in early trading Thursday, adding to the roughly 70% drop so far this year.
As consumers return to gyms, Peloton (PTON) has been struggling to maintain its electric growth from the early days of the pandemic. Bike and subscription sales have stagnated. The company has too much inventory, and demand is on the decline.
Peloton CEO Barry McCarthy, who has worked at Spotify (SPOT) and Netflix (NFLX), has focused on cost cuts through layoffs and store closures, outsourcing manufacturing and maintaining slimmer inventories since taking over in February. The most recent round of layoffs, affecting roughly 800 employees, was announced a few weeks ago.
On Wednesday, Peloton said it would start selling its exercise bikes and other fitness accessories on Amazon (AMZN) in the United States, fueling a 20% jump in shares. Those gains were wiped away Thursday.
The fourth quarter will be the high water mark for write-offs and restructuring charges, McCarthy said in a letter to shareholders.
The company expects its first-quarter sales to be in the range of $625 million to $650 million, below analysts’ average estimate of $783 million, according to Refinitiv.
–Reuters contributed to this report.
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