Peloton, an American-based exercise equipment manufacturer is finding it difficult to meet up with the enormous demand for its products. The manufacturer’s losses are, however, growing as well, as it tries to get exercise bikes to buyers forced to stay home amid the lockdown.
Market records show that Peloton Interactive Inc. sales exceeded $500 million in its most recent quarter, a new landmark that propelled the connected exercise-equipment company’s young shares toward record highs in after-hours trading.
Recently, Peloton PTON, 4.99% reported that quarterly sales hit $524.6 million, up 66% from the previous year.
This happened, all thanks to a spike in sales for its exercise bikes in the last few weeks of the company’s fiscal third quarter, as COVID-19 began to spread in the U.S. and force shelter-in-place orders that kept people indoors.
Sales of its equipment raised from 61% to $420.2 million, even though sales of the company’s treadmill stopped March 19.
“During the last few weeks of Q3, we saw a significant increase in demand for our bike, which has continued into Q4 so far,” the company representative revealed in a letter to shareholders.
The exercise-equipment company backed up its projection of continuing hot sales by increasing its guidance for the full year by nearly $200 million, less than two months before the fiscal year comes to a close.
Peloton now expects annual sales of $1.72 billion to $1.74 billion, after previously guiding for $1.53 billion to $1.55 billion.
In the stock market, Peloton shares spiked nearly 11% in after-hours trading Wednesday after closing with a 5% gain at $38.03. Shares were estimated to hit record highs, trading above the company’s intraday high of $39.25. The young Peloton stocks only went public in September at $29 a share.
READ ALSO: Singer, Adele Stuns Fans With Drastic Weight Loss
Even though Peloton sales spiked, its losses still grew as the company faced prevailing costs and expenses from shipping its bikes amid an increase in overall shipping.
Peloton recorded a loss of $55.6 million, or 20 cents a share, up from $38.6 million a year ago. According to FactSet, Financial Analysts on average were expecting a loss of 18 cents a share,
Higher expenditure aren’t Peloton’s only issue with shipping. The company in a recent statement said that it is struggling to fulfill orders to customers, and also expects that to continue, along with the temporary pause in sales of its treadmills.
“We entered Q4 with a backlog of bike deliveries in all geographies and sales continue to surpass expectations in the first several weeks of Q4 due to COVID-19,” the letter to shareholders reads. “Unfortunately, the unexpected sharp increase in sales has created an imbalance of supply and demand in many geographies, causing elongated order-to-delivery windows for our customers. … We do not expect to materially improve order-to-delivery windows before the end of Q4.” revealed the letter.