Peloton Interactive Inc. shares plummeted 32% in early trading Friday after the company cut its annual revenue forecast by as much as $1 billion and lowered its projections for subscribers and profit margins.
The fitness company—best known for its exercise bikes and remote classes—now expects sales of $4.4 billion to $4.8 billion in fiscal 2022, which ends next June. Less than three months ago, it had been predicting revenue of $5.4 billion. On an earnings call with analysts, Peloton said it underestimated the impact of economic reopenings.
The grim outlook sent the stock down to as low as $56.80 in premarket trading. Several analysts downgraded their ratings on the stock.
The news comes in the same week the brand debuted its holiday campaign—its largest spend yet—positing actor Brett Gelman as Scrooge.
Even before the swoon, Peloton shares were down 43% this year.
Peloton was a pandemic phenomenon, with customers flocking to home-exercise services during lockdowns. Now people are heading back to the office, school and gyms, sapping demand for the company’s equipment. Supply-chain constraints, as well as the soaring costs of commodities and freight, also are weighing on Peloton.
“We anticipated fiscal 2022 would be a very challenging year to forecast,” management said in a letter to shareholders Thursday. “We will be taking concrete steps to reexamine our expense base and adjust our operating costs.”