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(Boursier.com) — Platoon Interactive dropped up to 20% in session on Wall Street on Tuesday, after the publication of disappointing accounts for the third quarter of its staggered fiscal year. The title, however, reduced its losses in the evening, to finish all the same down 8.7% to $ 12.90.
The American manufacturer of home sports equipment, including high-tech exercise bikes, which had peaked during the sanitary confinements in 2020 and 2021 is facing a marked slowdown in its activity since the American economy has resumed. almost normal course, with in particular the reopening of the sports halls.
Heavy losses and sharply declining sales
the turnover for the group’s third fiscal quarter thus collapsed by 23.6% compared to the same period of 2021, at $964.3 million, weighed down by a drop in demand for its stationary bikes and treadmills. The 4th quarter should not allow a recovery in activity, with Peloton predicting sales of $675-700m vs. $821.7m expected by Refinitiv consensus. The group has acknowledged that some customers may unsubscribe as Peloton will increase the prices of its streaming fitness class subscriptions on June 1.
Unsold inventory coupled with rising costs resulted in a hefty quarterly loss for the ex-home fitness star. Net loss widened to $757.1 million ($2.27 per share) from a loss of $8.6 million (3 cents per share) a year earlier. Analysts had expected a loss per share of 83 cents.
$750 million loan from two banks
Last week, the Wall Street Journal and Bloomberg had revealed that the group was looking for fresh capital, and that it would study the sale of 15% to 20% of its capital in order to strengthen its balance sheet. Peloton reportedly contacted potential investors, large corporations and private equity firms.
In order to consolidate its finances, the group recently contracted a loan of 750 million dollars, repayable over 5 years, with JP Morgan and Goldman Sachstwo banks that had piloted its IPO in 2019.
“Hard work” to turn the company around
Peloton ended the third quarter of its staggered fiscal year with “lean capitalization for a company of our size”, acknowledged group boss Barry McCarthy. Its market value is currently $4.7 billion, compared to nearly $56 billion at its record high in January 2021, a plunge of more than 90%…
Corporate turnarounds “represent hard work”, said in a letter to shareholders Mr. McCarthy, who took over the reins of the company last February to replace founder John Foley. “It’s an intellectual challenge as well as an emotional and physical test at all times. It’s a real contact sport,” added the leader.