NEW YORK (BRAIN) — Peloton Interactive reported a fourth-quarter net operating loss of $1.2 billion on Thursday as the indoor fitness company continues its downturn following rapid growth during the pandemic. It was the sixth consecutive quarter of reported losses.
Revenue dropped 28%, from $936.9 million to $678.7 million year-over-year. Connective fitness product revenue dropped 55% to $295.6 million, but subscription revenue increased 36% to $383.1 million.
In a letter to shareholders, Peloton CEO and President Barry McCarthy said the losses were because of restructuring changes. Among those changes earlier this year were ceasing all owned manufacturing operations, backing off future domestic manufacturing plans, and subsequently expanding its partnership in Taiwan. Peloton also announced in February the elimination of 2,800 jobs globally.
"The loss reflects the substantial progress we made this last quarter re-architecting the business to reduce the current and future inventory overhang, converting fixed to variable costs, and addressing numerous supply chain issues," wrote McCarthy, who succeeded co-founder John Foley in February. "This progress, plus the reduced cash flow burn, is the positive story behind the headline loss."
He said from a supply chain perspective, reducing inventory commitments and outsourcing manufacturing for connected fitness hardware were fourth-quarter goals the company met.
Peloton also announced Thursday that Liz Coddington will join the company as CFO. Coddington was part of McCarthy's finance team at Netflix and most recently was with Amazon's AWS business.
On Wednesday, Peloton announced its bike, Guide, and selected accessories and apparel are available at Amazon's U.S. stores. Previously, Peloton products were sold exclusively through the brand's e-commerce sites, inside sales channels, and global showroom.
