Shares in exercise bike fitness startup Peloton Interactive sank 7% on Tuesday as the newly listed firm forecast a loss for fiscal 2020 and said it was choosing to focus on growth over profit for now.
Known for its on-demand workout programs on exercise bikes which allow riders to join virtually with other participants, the company in September was the latest in a run of startups to receive a subdued reception from stock market investors this year.
Peloton, which posted a bigger-than-expected quarterly loss, said it expects to report an adjusted loss of between $150 million and $170 million before interest, tax, depreciation and amortization for 2020.
“We are within striking distance of profitability,” Chief Executive John Foley said on a call with analysts on Tuesday.
“I believe if we pulled back on growth we could be profitable tomorrow but that is not what the board and the leadership of Peloton believes we should do.”
Foley said the company is making investments in new products, content and more retail locations, and plans to launch Peloton in Germany this month.
“We think this opportunity globally is so big that we think we’re right on the right balance of investing for future growth,” Foley said.
The company sells exercise equipment and a subscription service for streaming exercise classes. Its flagship product is a stationary bike priced at over $2,200.