Peloton forecasts weak revenue for holiday quarter

STORY: Shares of Peloton Interactive slumped on Thursday after the exercise bike maker posted a bigger-than-expected loss and forecast quarterly revenue that was below Wall Street estimates as it grapples with weak demand for its fitness equipment.

In a letter to shareholders, Peloton said there are risks it will underachieve its forecast, adding that given macro-economic uncertainties demand is likely to remain “challenged."

Peloton was all the rage among fitness enthusiasts during the health crisis, with the company hitting a peak market valuation of nearly $50 billion in early 2021.

But with people returning to gyms, demand for Peloton fitness equipment has dwindled, and the company has imposed a wide range of cost-cutting measures this year in an effort to steer the company back to growth.

Peloton's current market cap is $2.8 billion.

CEO Barry McCarthy has led the turnaround effort and said on a post-earnings call: "Our one job is to ensure the viability of the business, which a year ago was in doubt. And I believe that is no longer the case."

Peloton has tweaked bike prices, expanded to third-party retailers and is focusing on digital subscription plans to stimulate demand, which one analyst said may boost future product sales.