By Aishwarya Jain
(Reuters) -Peloton Interactive forecast 2026 revenue above estimates and said it would cut 6% of its global workforce to boost cost savings under an ongoing turnaround effort, sending the exercise-bike maker’s shares more than 11% higher.
The company also posted a surprise fourth-quarter profit on Thursday and said it will “adjust prices” to offset the impact of extra costs associated with tariffs.
It expects a $65 million hit from tariffs on 2026 free cash flow, the latest U.S. company to brace for uncertainties around how the Trump administration’s changing trade policies will affect sourcing, costs and demand.
The layoffs, along with plans to slash indirect costs and relocate some offices, are expected to help save an additional $100 million by the end of its next fiscal year, Peloton said.
As of Thursday, the company has already actioned about half of these savings via workforce reductions and expects to realize the rest over the coming months, CFO Liz Coddington said on the earnings conference call.
CEO Peter Stern, who joined the company in January from Ford Motor, had kicked off the turnaround effort to address a slump in sales of Peloton’s high-end stationary bikes and treadmills following a boom during the COVID lockdowns, when people were looking to work out at home.
In a sign the cost push was bearing fruit, operating expenses fell 20% in the fourth quarter, while general and administrative expenses were down 33% from last year.
Gross margin from its connected fitness products such as technology-enabled home exercise machines rose 900 basis points to 17.3% from a year ago. Gross profit in the segment rose 96% to $34.4 million.
Peloton posted quarterly profit of 5 cents per share, compared with Wall Street estimates for a loss of 6 cents per share.
The company forecast 2026 revenue between $2.4 billion and $2.5 billion, higher than analysts’ estimate of $2.41 billion, according to data compiled by LSEG.
Total revenue for the quarter ended June was $606.9 million. Analysts, on average, were expecting revenue of $579.80 million in the fourth quarter.
(Reporting by Aishwarya Jain in Bengaluru; Editing by Devika Syamnath)
