Peloton Interactive shares plunged by 15% during pre-market trading on Thursday following the release of the company’s latest financial results. The New York City-based exercise equipment and media company reported an operating loss of $1.2 billion during its fiscal fourth quarter. This amounts to a loss of $3.68 per share.
The company’s operating revenue for the quarter stands at $678.9 million; a year-on-year decline of 28% from last year. Revenue also fell short of the $685.9 million revenue that analysts projected.
Although a financial disappointment, CEO Barry McCarthy insists that this loss reflects the changes that Peloton has introduced in an effort to overcome numerous obstacles facing the business.
“The loss reflects the substantial progress we made this last quarter re-architecting the business to reduce the current and future inventory overhang, converting fixed to variable costs, and addressing numerous supply chain issues,” McCarthy wrote in a letter to shareholders.
According to the company’s financial outlook for Q1, revenues are expected to continue declining to $625-$650 million; a 21% slump from the previous year. This estimate is based on the recent hardware price increases faced by the company as well as the expected seasonal demand slump.