(Bloomberg)—Peloton Interactive Inc., No. 122 in the 2020 Digital Commerce 360 Top 1000, shares rose Friday after the company reported quarterly sales that topped analyst projections as stay-at-home orders and gym closures continued to spur purchases of the company’s exercise equipment and workout subscriptions.
The New York-based fitness technology company said fiscal fourth-quarter revenue surged 172% from a year earlier to $607.1 million. Analysts were looking for $581 million, according to data compiled by Bloomberg. Profit, excluding certain items, was $89.1 million, or 27 cents a share, in the latest period, Peloton added in a statement.
Peloton also forecast $3.5 billion to $3.65 billion in revenue for fiscal 2021 and $720 million to $730 million for the fiscal first quarter—both well above Wall Street expectations. The stock rose 7.4% to $94.20 at 9:32 a.m. in New York. The shares have more than tripled this year.
The COVID-19 pandemic has boosted demand for Peloton’s products and services as consumers look for new ways to work out at home. Many gyms across the U.S. were forced to shut down this year, giving the company an opportunity to lure new customers and subscribers. Keybanc Capital Markets analyst Edward Yruma called Peloton’s revenue growth in the quarter “extraordinary,” and said the “very strong price/value consumer proposition,” is also driving the shares.
Connected fitness subscribers—people, households or commercial properties that paid for a subscription to a Peloton machine or requested a “pause” to their subscription for up to three months—reached 1.09 million in the latest quarter. Wall Street estimated 1.08 million.
Workouts soared 333% in the period, with the average subscriber doing almost 25 workouts a month. That’s up from 12 per month a year earlier.
The company expects the number of connected fitness subscribers to grow about 90% in its next fiscal year.
Earlier this week, the company announced it is cutting the price of its flagship bike by a few hundred dollars and unveiled a new higher-end bike. Next year, it’s also releasing a cheaper treadmill.
On its earnings call, Peloton executives said the new treadmill will have a larger positive impact in fiscal 2022 than in 2021, and the company views the treadmill as eventually being a bigger opportunity than its bikes. Peloton also said it is resuming sales of major products in most markets after pausing treadmill deliveries due to COVID-19.
The company said that almost all of its 103 stores have re-opened after COVID-19 related closures, which could help the company sell the new products.
J.C. Penney posts steep sales decline for Q2
J.C. Penney Co. (No. 32) sales plunged 45% in the second quarter as the department-store chain entered bankruptcy and struggled with an accelerated shift away from physical stores and the COVID-19 outbreak.
Net sales fell to $1.39 billion in the period ended Aug. 1 from $2.51 billion a year earlier, the company reported in a regulatory filing Thursday.
The retailer’s lenders have agreed to team up with landlords Simon Property Group Inc. and Brookfield Property Partners to buy the troubled company, which has struggled for years with changing consumer tastes and falling traffic at malls. The outbreak of the pandemic accelerated this trend and prompted its Chapter 11 filing in May.
The company reported $64 million in advisory fees and $50 million in debtor-in-possesion financing fees. Including gains related to the termination of leases, reorganization costs totaled $108 million in the second quarter.