Although gyms and fitness centers around the world remain closed and others weigh up bankruptcy options, state of the art fitness pioneer Peloton is experiencing a surge in sales.
The company posted its third-quarter results on Wednesday, revealing that revenue increased 66 per cent over the quarter as more people invested in their high-tech home fitness bike, treadmill, or exercise app.
It ended the quarter with more than 866,100 linked fitness subscribers in total - the customers who purchased either the bike or the treadmill - representing a rise of 94 percent from this period in 2019. Peloton's high-tech stationary bike each cost $2,245.
Peloton's solid revenue came as more people bought their fitness equipment and tuned into their live classes to try and break a sweat while confined at home during the coronavirus crisis.
The strength and results also prompted Peloton to boost its full-year sales perspective. The company disclosed the increased demand for their bikes continues into the fourth quarter. The company added that it's seeing new clients - those who didn't consider purchasing one of their bikes before the Covid-19 crisis.
During a post-earnings call, Chairman and Chief Executive Officer John Foley told investors that the pandemic would change fitness habits for customers in the long term.
Additionally, Peloton posted a profit of $23.5 million on an adjusted Ebitda basis versus its own previous guidance range of -$35 million to -$25 million, indicating that the positive results were also a surprise to Peloton executives. Peloton still posted a net loss of -$55.6 million for the period, given the strongly improved Ebitda estimates.
Connected Fitness Product sales helped the company beat estimates across all geographies steered by rising demand for the company's bike, Peloton disclosed in a media release. "In the past few weeks of the third quarter, we saw a significant rise in demand for our bike which has continued into the fourth quarter so far," the company said.
Peloton Chief Financial Officer Jill Woodworth said the company was entering the fourth quarter with backlogged orders in each region, and sales continued to meet expectations.
To speed up distribution, she added that Peloton was taking a hit on its profit margins. The corporation announced in November that it had acquired Tonic, one of their manufacturers based in Taiwan.
On Thursday, Peloton president William Lynch told analysts they hoped to streamline their bike supply between Tonic and Rexon, another Taiwan-based manufacturer.
