© Reuters. FILE PHOTO: A stationary bicycle inside of a Peloton store is pictured in the Manhattan borough of New York City, U.S., January 25, 2022. REUTERS/Carlo Allegri/File Photo/File Photo
(Reuters) -Peloton Interactive on Wednesday pushed back its cash-flow positive target to 2024 after it failed to achieve it this year as expected earlier, sending its shares tumbling down 26% in premarket trading.
The interactive fitness equipment maker cited higher marketing spend for the holiday season and costs associated with the recall of 2.2 million exercise bikes for failing to achieve its goal of break-even cash flow in the second half of fiscal 2023.
“We do expect to achieve this objective once again in the second half of FY24,” Peloton (NASDAQ:) CEO Barry McCarthy said in a letter to shareholders on Wednesday.
The company also forecast first-quarter revenue between $580 million and $600 million, below Refinitiv estimates of $655.9 million, as a shift in consumer spending toward travel and experiences hurt demand for its exercise equipment.
Demand for its connected bikes, which had spiked during the pandemic, has seen a sharp revision post pandemic as some people return to gyms, while many others cut back on discretionary spending amid high inflation.
Peloton’s revenue in the fourth quarter fell to $642.1 million from $678.7 million a year earlier.
Revenue from connected fitness products fell to $220.4 million from $295.6 million, while subscription revenue were up to $421.7 million from $383.1 million a year earlier.
