Peloton named a former Apple executive as its new boss on Friday in hopes of reviving the struggling company — and the move immediately paid big dividends with the stock rising nearly 30%.
Peter Stern, who co-founded Apple Fitness+ before moving on to his current role as president of Ford’s digital services business, has been tasked with the challenge of driving a turnaround for the exercise bike maker after demand declined following the pandemic. Facing a challenge.
Peloton has been run by an interim co-CEO since May, when Barry McCarthy, a former Spotify and Netflix executive, took over. stepped down After just over two years.
Stern, 52, will take over as CEO and chairman on January 1.
Chairman Jay Hogg said in a statement, “Peter is an experienced strategist with a track record of driving sustainable growth through innovation, and we have full confidence in his ability to lead Peloton during this important time.” ”
“He brings meaningful expertise in scaling various technology-oriented platforms and a deep understanding of the health and wellness sector – making him uniquely suited to serve as Peloton’s next CEO.”
The company’s interim co-CEO Karen Boone will remain in the role through the end of the calendar year, while co-CEO Chris Bruzzo will step down on Friday.
Both Boone and Bruzzo will remain on Peloton’s board.
Peloton — which was founded in 2012 — is hoping Stern will help expand its customer base, as the company works to rely on ongoing subscription fees rather than its one-time bike sales.
The company made cuts in May 15% of its workforce – It has reduced staff numbers for the fifth time since 2021 as it struggles to regain its footing in the fitness industry.
Peloton shares were up 28% at $8.44 on Tuesday — after hitting a peak of more than $160 at the height of the pandemic in December 2020.
Stern’s appointment comes after the Manhattan-based company reported a net loss of $900,000 in the first fiscal quarter ended Sept. 30 and warned of disappointing sales and membership numbers during the holiday season.
Peloton’s net loss was effectively zero cents per share, beating expectations for a loss of 16 cents per share. That was a significant improvement from the massive loss of $159.3 million, or 44 cents per share, during the same period last year.
Sales fell to $586 million in the first quarter, down about 1.6% from $596 million last year, but better than expectations of $574.8 million.
But as Peloton prepares for the holiday season — typically its best quarter with most other retailers — the company warned that revenue could fall between $640 million and $660 million, according to StreetAccount. That’s $671.4 million less than expected.
Its subscription division is unlikely to fare much better. According to StreetAccount, Peloton said it expects to have between 560,000 and 580,000 paid app customers by the end of the current quarter, down from expectations of 608,200.
In the first quarter, Peloton cut operating expenses by 30% compared to the previous year. It posted approximately $116 million in adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) and approximately $11 million in free cash flow.
According to StreetAccount, the bike maker is expecting adjusted EBITDA between $20 million to $30 million during the current quarter, up from estimates of $13.9 million.
Despite the disappointing holiday forecast, the company raised its full-year EBITDA guidance to between $240 million and $290 million. Peloton previously expected adjusted EBITDA between $200 million and $250 million.
Peloton is forecasting revenue between $2.4 billion and $2.5 billion, which is in line with LSEG analysts’ expectations of about $2.5 billion.
The gains were driven by aggressive cost-cutting measures and price increases.
During the first quarter, Peloton increased the recommended retail prices for its Bike and Bike+ in its international markets and increased the price of its Row in North America.
