Peloton Projects Sales Decline and Will Cut Jobs in Turnaround Bid

Peloton Interactive Inc. projected a sales decline for the current quarter and said it would once again cut jobs, but the company preached confidence in a turnaround plan under new management.

Revenue in the fiscal first quarter will be $525 million to $545 million, Peloton said Thursday, missing Wall Street estimates with a decline of 12 percent at the midpoint. It expects full-year revenue for fiscal 2026 to range from $2.4 billion to $2.5 billion, representing a 2 percent year-over-year drop but meeting analyst estimates.

The New York-based fitness technology company generated revenue of $607 million in the quarter ending in June. Though that declined 6 percent, it still beat estimates. Total subscriptions on Peloton hardware fell 6 percent, while the number of app-based subscriptions dropped 11 percent. Still, overall gross profit improved and operating expenses shrank by 20 percent.

While sales once again tumbled in the June period, the company touted that workout time for hardware users increased 4 percent year over year in the quarter. It also beat out its own fiscal 2025 guidance and increased free cash flow.

Shares of Peloton rose 9.2 percent in premarket trading.

Under new chief executive officer Peter Stern, the company is looking to turn around its operations with continued cost cutting, new products, an infusion of artificial intelligence for more personalized workouts and a deeper focus on initiatives related to cardio. Stern promised investors new product launches before the end of the calendar year.

“In our next chapter, we will build upon our leadership in cardio to support our members’ entire wellness journey, accelerating our progress in strength and mobility and exploring new frontiers in mental well-being, sleep and recovery, nutrition and hydration,” Stern said.

But the road ahead will be rough for employees. The company is once again cutting jobs to reduce costs, a lever it pulled several times under prior management. This time, it’s laying off 6 percent of its workers globally.

“Our operating expenses remain too high, which hinders our ability to invest in our future,” said Stern, a former digital services executive at Apple Inc. and Ford Motor Co. He didn’t specify how many jobs would be eliminated and said that the moves are “necessary for the long-term health” of the business.

Stern said Peloton would also expand its microstore lineup — small boutiques within shopping mall walkways — from one to 10 in the US, expand third-party retail availability and send its instructors to more events. The company is also creating a unified division for selling its equipment to gyms and pledged an expansion internationally.

And the company will become “more sophisticated” in its use of promotions, while also adjusting prices to factor in costs related to tariffs, shipping and returns. It didn’t specify when it would implement those changes or if bike and treadmill sticker prices would drastically increase. The company also didn’t discuss any changes to subscription pricing.

By Samantha Murphy Kelly

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Peloton CEO to Step Down as Company Cuts 15 percent of Jobs

The company has continued to struggle with growing “at scale” and issued a warning in February that revenue may not start increasing again until the fourth quarter.