Peloton is lowering its projections for the next nine months after the first quarter of its fiscal year saw slowing growth and supply chain issues that are piling on more challenges for the embattled company.
Officially, Peloton recorded $805 million of revenue in the first quarter of its fiscal year, up 6% year over year and up 250% versus two years ago. Subscription revenue nearly doubled to reach $304 million, though connected fitness revenue fell by 17% (to $501 million) compared to last year.
For the full fiscal year, Peloton expects up to 3.45 million connected fitness subscriptions, down from previous projections of 3.63 million subscriptions, and between $4.4 billion and $4.8 billion in total revenue, down from the $5.4 billion estimate provided in August.
“We anticipated fiscal 2022 would be a very challenging year to forecast, given unusual year-ago comparisons, demand uncertainty amid reopening economies, and widely reported supply chain constraints and commodity cost pressures,” CEO John Foley said in a letter to investors.
Peloton is also working to rebuild its image after it was forced to recall its treadmill products earlier this year following reports of one death and dozens of injuries. Several lawsuits have been filed in association with the recalls, and Peloton said in August it has been subpoenaed by the federal government for documents and information related to how the company reported treadmill-related injuries. The company did not provide any update on these legal proceedings in its quarterly news release.
See also: Peloton Subpoenaed by DOJ, DHS Over Reporting of Treadmill Injuries
Peloton’s shares fell earlier this week, possibly because of Apple’s new design patent for a fitness app and the expansion of the tech giant’s Fitness+ service to 15 new countries. Year to date, Peloton’s stock has fallen by over 40%, compared to the S&P 500’s nearly 25% rise.
Foley said, though, that Peloton remains confident in its strategy. “Software and streaming media have redefined at-home fitness and are driving a migration of workouts into the home, a consumer behavioral shift that we believe is still in its early stages,” he noted.
Carl Daikeler, co-founder, chairman and CEO of The Beachbody Company, said in a recent interview with PYMNTS that he believes the future of fitness is a hybrid of at-home and gym-based workouts.
“People love their gyms, but they also love the convenience of a hybrid model — exercising at the gym when they have time, but at home the rest of the time,” Daikeler said. “That’s why at-home fitness is here to stay.”
PYMNTS’ Connected Economy research shows that one-third of all consumers are highly connected in the health pillar, including over half of millennials.
Read more: Hybrid Home, Gym Experience May Be the Future of Connected Fitness
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