Peloton Interactive Inc. named Ford Motor Co. executive Peter Stern as its next chief executive officer, entrusting him to lead a turnaround of the long-struggling fitness company.
Stern, who is currently president of Ford Integrated Services, will join Jan. 1, the company said Thursday. Peloton also delivered its latest financial report, saying that revenue would be $640 million to $660 million in the second fiscal quarter. The midpoint of that range would be down 13% from a year earlier and below the $663.5 million that analysts had projected.
Peloton, which thrived during pandemic lockdowns, has been mired in a deep slump over the past three years. Tech veteran Barry McCarthy was hired in early 2022 to turn around the business — best known for its stationary bikes and online classes — but stepped down earlier this year. Board Chair Karen Boone and director Chris Bruzzo had been serving as interim co-CEOs while Peloton sought its new leader.
As part of its earnings, Peloton also projected second-quarter subscriber numbers that were below analyst estimates, though its outlook for earnings before interest, taxes, depreciation and amortization was slightly better than anticipated — a sign that cost cuts may be bearing fruit. Peloton also pointed to improvements in free cash flow.
“We’re achieving our cost savings targets faster than we expected as a result of strong execution,” the New York-based company said.
For the full year ending next June, Peloton forecast revenue of $2.4 billion to $2.5 billion, the midpoint of which is down 9% from a year earlier. Analysts estimated $2.46 billion. The company expects its connected fitness subscribers to fall 9% at the midpoint of its range to about 2.72 million. Analysts were anticipating 2.81 million.
Ebitda was also the bright spot in the full-year forecast. The midpoint of Peloton’s range is $265 million, well above the $232.4 million analysts had targeted.
In the first quarter, earnings amounted to $115.8 million by that measure. Analysts were predicting $56.6 million. Though revenue fell 2% to $586 million from a year earlier, that was better than the $573 million analysts were predicting.