Peloton's 4Q earnings expectations
Peloton will announce its latest quarterly earnings 26th August. Here's what to watch out for.
Revenue growth expected to slow
What to watch out for:
Revenues below expectations
Lower subscriber growth
Higher churn
Signs of the pandemic benefit ending and members returning to gyms
Peloton will look to communicate a strong set of revenue figures and address any concerns that demand is decreasing.
Impact of the Tread recall
Peloton’s Tread recall featured heavily in the last quarterly earnings, with analysts questioning whether it would lead to a drop in consideration to other product lines (Bike and Bike+).
What to watch out for:
Higher associated costs
Tread sales resuming earlier than expected
Lower demand for other products
Investors will hope associated costs are lower than expected and the Tread will go back on sale in September.
Seasonality
We expect key performance indicators will be impacted by the summer months, meaning people were outdoors more and training less inside.
What to watch out for:
Engagement (number of workouts per member/month) declining more than expected
Marketing campaigns (Peloton Champions) aimed at increasing engagement delivering good return on investment
Peloton must communicate any declines are seasonally rather than driven by lack of demand.
Increased spending
Peloton mentioned last month it was investing heavily in research and development and marketing.
What to watch out for:
New product launches driven by increased R&D spending
Consideration increasing due to marketing spend
Entering new markets (Spanish speaking countries e.g. Mexico, Spain expected)
Peloton expanding its reach would be a positive sign for investors.
Update on Thursday
I’ll be covering the earnings on Thursday 26th so keep an eye on your inbox.