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Peloton could be pedaling toward a comeback.
After struggling to sustain the momentum it had during the COVID-19 pandemic, the fitness equipment company posted an increase in revenue for the first time since 2022 on Thursday, resulting in a 35% spike in its stock price. Before the earnings call, Peloton shares were down 45% on the year until Wednesday’s surge.
The company rode high during the COVID-19 pandemic when gyms were closed, people were home, and the company’s interactive bike provided both a sense of workout and community when both were hard to come by. But as life returned to normal, Peloton struggled to sustain its momentum.
The result has been layoffs, leadership changes, and restructuring, all of which seem to have contributed to this week’s surprisingly good news. Earlier this year, Peloton cut about $15 million in costs and laid off 15% of its workforce. As part of the restructuring, CEO Barry McCarthy stepped down. The company posted losses of $30.5 million for the quarter compared to losses of nearly $242 million the previous year.
Peloton has since been run by two board members and is expected to announce a replacement for McCarthy before its next earnings call in the fall. While the sales growth was just 0.2%, that was well ahead of expectations. Sales had dropped for eight straight quarters since 2022, and analysts projected they would again. Instead, revenue rose to $644 million, a small $1.5 million increase but well ahead of the expectations for a $10 million–plus dip.
“From Q3 to Q4, the narrative has changed from Peloton needing a life jacket immediately to being able to tread water for a bit longer,” said Paul Cerro, chief investment officer at Cedar Grove Capital Management.
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