Turn up the resistance... Lockdown orders have caused the number of crunches and mountain climbers done on living room floors to skyrocket. But since there are no Push-Up Mutual Funds or Burpee ETFs, we're looking at Peloton. The spin bike company's shares soared 16% Thursday to a record high as demand for its at-home fitness product exploded:
- Sales up +66%: Its $2.2K spin bikes and $4.3K treadmills rode off shelves — and then you pay $39/month to stream classes. A shocking 176K are subscribed to the app without Peloton hardware (aka, DIY Peloton bike on iPad — or one of its other workouts).
- But, a loss: Peloton boosted its sales forecast for the year on all those endorphins, but still posted a $56M loss last quarter.
SoulCycle addicts have withdrawal... The corona-conomy brought Peloton new types of customers who wouldn't have considered buying before the pandemic. People who usually work out at studios or in group classes through their gym memberships caved under cabin fever:
- +94%: Paid subscribers nearly 2X'd since last year to 886K. A record 23K people streamed Peloton's largest class ever.
- 44M: Peloton logged a record-shattering 44M workouts in the quarter (490K workouts per day on average), up from 24M in the December quarter.
Investors predicted this success... Peloton shares more than doubled in the past 1.5 months because investors eyed critical leading indicators. Lagging indicators (like Peloton's earnings report) tell us the result from the past, while leading indicators are more forward-looking. Take Peloton's 7-9 day normal shipping time — it increased to over a month, indicating surging demand, which translates to future sales boosts.