Peloton took $182 million impairment charge last quarter as inventories piled up

Read Time:2 Minute, 11 Second


A Peloton stationary bike for sale at the company’s showroom in Dedham, Massachusetts, US, on Wednesday, Feb. 3, 2021.

Adam Glanzman | Bloomberg | Getty Images

Peloton’s goodwill took a $182 million hit in its previous fiscal quarter as inventory levels ballooned and consumer demand for its bikes and treadmills waned.

During the three-month period ended March 31, Peloton identified various factors that indicated a “triggering event” for an impairment charge, the company said in a Tuesday 10-Q filing with the Securities and Exchange Commission. The charge was entirely related to its connected fitness products.

Those factors were softening demand, higher costs of inventory and logistics and a sustained decrease in the company’s stock price, Peloton said in the filing. The company’s market cap has fallen to about $4.5 billion from a high of about $50 billion early last year.

Peloton’s losses in the latest quarter mounted to $757.1 million, compared with a loss of $8.6 million a year earlier, the company reported on Tuesday morning.

Sales tumbled 24% to $964.3 million, marking Peloton’s first year-over-year revenue decline since it went public in 2019.

Peloton, which is now run by Chief Executive Officer Barry McCarthy, offered up a weaker-than-anticipated outlook for its current quarter that ends on June 1, saying that demand could continue to be soft in the near term.

As demand dropped off from a pandemic peak, Peloton’s inventories grew sizably during the latest period to total $1.4 billion on the company’s balance sheet, compared with $937.1 million a year earlier. That was almost entirely made up of finished products that are either sitting in warehouses or in transit to be received by the company, Peloton said in it 10-Q filing.

CNBC reported in late January that Peloton was planning to temporarily halt production of some of its equipment in order to reset inventory levels. Then-CEO and co-founder John Foley responded by saying Peloton needed to “right-size” production levels.

McCarthy, the new CEO, said Tuesday that Peloton hasn’t made “quite as much progress in right-sizing production” as it needs to.

He said the company’s supply chain team, now led by Andrew Rendich, had been working closely with partners on ordering parts that have longer lead times.

Peloton has been able to cut its commitments to third-party suppliers from about $550 million as of Dec. 31, to between $120 million and $280 million, the company said in its 10-Q filing.


If you want to know more about business please go to https://updatednews24.com/category/business/

Happy
Happy
0 %
Sad
Sad
0 %
Excited
Excited
0 %
Sleepy
Sleepy
0 %
Angry
Angry
0 %
Surprise
Surprise
0 %
We use cookies to personalise content and ads, to provide social media features and to analyse our traffic. We also share information about your use of our site with our social media, advertising and analytics partners. View more
Cookies settings
Accept
Privacy & Cookie policy
Privacy & Cookies policy
Cookie name Active

Who we are

Suggested text: Our website address is: https://updatednews24.com.

Comments

Suggested text: When visitors leave comments on the site we collect the data shown in the comments form, and also the visitor’s IP address and browser user agent string to help spam detection. An anonymized string created from your email address (also called a hash) may be provided to the Gravatar service to see if you are using it. The Gravatar service privacy policy is available here: https://automattic.com/privacy/. After approval of your comment, your profile picture is visible to the public in the context of your comment.

Media

Suggested text: If you upload images to the website, you should avoid uploading images with embedded location data (EXIF GPS) included. Visitors to the website can download and extract any location data from images on the website.

Cookies

Suggested text: If you leave a comment on our site you may opt-in to saving your name, email address and website in cookies. These are for your convenience so that you do not have to fill in your details again when you leave another comment. These cookies will last for one year. If you visit our login page, we will set a temporary cookie to determine if your browser accepts cookies. This cookie contains no personal data and is discarded when you close your browser. When you log in, we will also set up several cookies to save your login information and your screen display choices. Login cookies last for two days, and screen options cookies last for a year. If you select "Remember Me", your login will persist for two weeks. If you log out of your account, the login cookies will be removed. If you edit or publish an article, an additional cookie will be saved in your browser. This cookie includes no personal data and simply indicates the post ID of the article you just edited. It expires after 1 day.

Embedded content from other websites

Suggested text: Articles on this site may include embedded content (e.g. videos, images, articles, etc.). Embedded content from other websites behaves in the exact same way as if the visitor has visited the other website. These websites may collect data about you, use cookies, embed additional third-party tracking, and monitor your interaction with that embedded content, including tracking your interaction with the embedded content if you have an account and are logged in to that website.

Who we share your data with

Suggested text: If you request a password reset, your IP address will be included in the reset email.

How long we retain your data

Suggested text: If you leave a comment, the comment and its metadata are retained indefinitely. This is so we can recognize and approve any follow-up comments automatically instead of holding them in a moderation queue. For users that register on our website (if any), we also store the personal information they provide in their user profile. All users can see, edit, or delete their personal information at any time (except they cannot change their username). Website administrators can also see and edit that information.

What rights you have over your data

Suggested text: If you have an account on this site, or have left comments, you can request to receive an exported file of the personal data we hold about you, including any data you have provided to us. You can also request that we erase any personal data we hold about you. This does not include any data we are obliged to keep for administrative, legal, or security purposes.

Where we send your data

Suggested text: Visitor comments may be checked through an automated spam detection service.
Save settings
Cookies settings