Peloton Interactive is not creating as big as splash in the apparel industry as it hoped

Joe Raedle/Getty Images News

As has been widely expected, Peloton Interactive (PTON +5.9%) slashed the sales projections for its apparel business amid supply chain challenges and waning pandemic period demand, according to corporate documents spotted by CNBC.

The company now forecast that its apparel division will bring in around $150M for its fiscal year after an early projection called for more than $200 million in annual revenue.

Analysts have been warning for several months that Peloton (NASDAQ:PTON) may have been shooting too high with an expectation it could make a big splash in the apparel industry. The business is run by CEO John Foley's wife, which some activist investors think complicates the issue.

The apparel business only account for a small fraction of PTON's total revenue haul. Shares of Peloton Interactive (PTON) rose 5.66% in afternoon trading as they continue to a mild recovery from the 2022 low of $22.81.

Comments

[I'm new here]

Their apparel is ridiculously priced. Only time I’ve ever bought from this is with $100 referral credits and then usually most of it was sold out. I love the coaches at peloton but outside of that the rest of their business is run like shit.

[DenyDenyCounterAccuse]

Bang bang. Called this.
Easy 40% gain in less than a month. Remember folks doesn’t matter where a stock has been matters where it’s going. And in the $20s this puppy was an absolute gift. Thank you shorts. And thank you management who did such a terrible job with a great product that provided us this opportunity for a 40% gain (so far) in less than a month.

[JoeyT]

I sold my puts because I felt like the valuation was getting closer to buyout range and I didn't want to lose any gains. Unfortunately, management is so bad that I almost want my tickets to this dumpster fire back.

Reminds me of GPRO in 2015.

[YO long-short]

@JoeyT --did you ride Gpro down to the teens?

[JoeyT]

@YO long-short Sadly no, GoPro rode ME down into the teens. Was new to trading in 2014 and I probably lost 50%. A lot of good lessons came out of that: not buying into hype, not buying companies who try to switch their core business, not trusting CEO's who are cliches of their target market. Also learned how to not get suckered into bull traps and when to take losses.

Btw did you seen the AMZN buyout rumors? I hope it actually happens so I can reference this thread xD

[jeffk100]

dont worry, they will make a huge splash in the BK court!

[DenyDenyCounterAccuse]

Love all the negativity. Stock is up 20% in last week.
And people using same argument as when this stock was $50,$100 & $150.
When the facts change….

This stock gets taken out close to $50 within 6months. Book it.

[YO long-short]

@DenyDenyCounterAccuse --what facts have changed for the better for Peloton?

[DadRuss72]

A mature company that never should have gone public. Trash. Straight trash.

[Miwicz]

Surprise surprise. More failures and lies from Peloton management

[NYSJ]

What’s funny about this is not you have disgruntled employees leaking docs. This is starting to look like a Netflix documentary.

[Andreas Hopf]

Trophy wife. Trophy business. What could go wrong?

[El Financeiro]

$8B valuation…is not sustainable.

[subpopfinance]

@El Financeiro On a billion dollars+ of annual subscription revenue?

[El Financeiro]

@subpopfinance $1B in subscription revenue that has dramatically slowed. Does it deserve a premium compared to Planet Fitness? More than 2/3 of its $5B revenue is selling the bike. The bikes aren’t selling as fast and have been discounted (ie impacts acquiring new subscription and profitability). It’s a cyclical business. Competition is real…easy for customers to substitute with another equipment. Thus should the valuation be closer to a traditional equipment maker.

PTON’s investment thesis (high growth disruptive company) is not intact. What am I missing for it $8B+ or even more in the current environment?

[Sande traderal]

@subpopfinance and fading?

[Tall Seller]

If $PTON kept enough inventory in stock OR even accepted orders regardless of whether they had to wait for stock to be manufactured, they would sell more. All but 1 time (when they did their drop with Adidas), their apparel had no inventory available, when I tried to buy off them. That’s not a good way to operate. There are ways to solve this but they didn’t even try.

[4121]

@Tall Seller

Same as with bikes. Not so long ago they did not have enough of them and you had to wait a long time to get them.

[Tall Seller]

…they cooks give me the choice even….

“We’ll accept your order but you may have to wait X length of time”.

Why wouldn’t they do this? Anyway. It’s solvable….which is a good thing I guess, if they try.

[Julian Beatty]

Chapter 11.

[Clark158f1]

Whats not to like ? Declining equipment sales or declining apparel sales.

I'll take door number three. Increased losses.

[LivefromDaGutter]

Trash