Fitness company Peloton reported another successful quarter, as demand for home gyms and online fitness classes has increased during the pandemic. Peloton increased the revenue forecast for the entire fiscal year, but warned about the growth of logistics costs.
Shares of Peloton (PTON), increased by nearly 346% since the beginning of the year, rose 2% in Friday trading (at time of writing) after the company has published the results of the first quarter of fiscal 2021, which ended September 30.
The Peloton, which became public just over a year ago (26 September 2019), reported profit per share for the second consecutive quarter: $0.20, down $0.09 to greater than the analyst estimate of $0.11 per share, and significantly better compared to the net loss per share -$1.29 in the first quarter of the fin. 2020.
Total quarterly revenue rose to $69.3 million from the net loss of $49.8 million a year earlier.
The total income of the 1st quarter increased by 232% to $757,9 million, which also exceeded Wall Street expectations of $748,04 million to See the quarterly history of revenue and profit Peloton for the last 2 years can link.
It is known that fitness company Peloton gets a larger share of their income from sales of bikes and treadmills with displays, and to a lesser extent, from subscriptions to its digital platform for online classes in various types of fitness. However, the company does not give separate figures for these segments revenues.
Available bikes and treadmills Peloton cost from $1895 to $4295, as presented in the September new products: treadmill and bike Tread will cost less than $3000 and $2495 respectively, and will appear in early 2021.
Analyst at CFRA Research Camille Januszewski, among others, stated that a rating of “buy” many analysts for the stock Peloton was based on the expected popularity of the issue of the cheaper new machines.
Subscription for owners of simulators are $39 per month and provide for a family using multiple clients. For those who do not have the equipment, the monthly digital subscription for $13,99 available through the app on iOS and Android.
Peloton announced that as of September 30, the number of fitness subscribers of its digital platforms exceeded 1.33 million, which is 137% higher than a year earlier. The management of the company said during the quarter the team Peloton continued to increase the amount of content on the platform, creating more than 2,400 new fitness classes.
A good indicator is that the Peloton continued to demonstrate a high level of involvement of its users and the record low percentage of those who refuses her fitness services.
In a pandemic and closing gyms the average number of training audience Peloton has increased to 20.7 per training per month compared to 11.7 a year earlier.
Average monthly churn in the first quarter was 0.65% compared to 0.75 percent in the previous quarter.
Forward-looking statements Peloton
The company expects another success from the celebration of the second quarter, predicting that the number of users will increase from 1.33 million to 1.63 million, customer churn needs to be kept below -0.85% while revenues for the first time to reach $1 billion, although estimates are more modest, amounting to $939 million.
Peloton raised its earnings forecast for the whole fin. 2021 from the range of $3.5 billion – $3.65 billion to $3.9 billion, which is above average analytical forecast of $3.63 billion
The company also expects to reach 2.17 million users by the end of the year and further reduce churn in 2021 fin. year: below 0.9% compared with the previous forecast of less than 1%.
“Fly in the ointment” in the Peloton
The negative side of the increased demand, the Peloton will be a decline in profits due to the rapid opening of new production capacities and the additional costs associated with the delivery, which she will incur during the festive season.
The company recognized that the delivery of equipment delayed, and customers complain about poor quality of service, repeating his earlier statement that he plans to work in conditions of limited supply “for the foreseeable future.”
“As we rapidly scale our organization to meet the extraordinary demand for our products, we understand that some of our members were faced with long delays associated with obtaining our products or requests for support,” said Peloton CEO John Foley in a letter to shareholders.
“The growth in the number of cases of coronavirus in the US Peloton provides the perfect conditions for confirmation of his thesis about a new approach to fitness,” said Landon Luxembourg, senior analyst at Third Bridge in new York before publication of the quarterly report of the company.
However, Monaco have also expressed concerns that the increased demand might create problems: “the Current short-term problem for the Peloton, remains the rate of production and delays in the supply chain, which manifests itself in the form of an extended window of delivery and carries a risk of potential failure of consumers from orders”.