Peloton has slashed the price of its original exercise bike by nearly 20 percent as fitness enthusiasts who got their COVID vaccines return to gyms.
The fitness equipment startup has slashed the price of its original bike to $1,495 — a price drop of nearly 20 percent from the $2,245 it cost this time last year.
This is the second time Peloton has lowered the price of the original bike. When the Bike+ machine debuted last September for $2,495, the price of the original bike was reduced to $1,895.
The popular maker of home fitness equipment became hugely popular during the pandemic as people desperate to stay fit while the gyms were closed bought its bikes.
That also caused the company’s share price to rise. But gyms reopened last fall and masking rules eased further this year as the availability of COVID vaccines increased, with many people now choosing to return to the weight room and in-person group class.
For the first fiscal quarter of 2022, which began in July, Peloton forecasts sales will reach $800 million — a drop from 2021 revenue of $936.9 million that reflects the Bike’s price cut.
As of today, Peloton has slashed the price of its original bike to $1,495 — a price drop of nearly 20 percent from the $2,245 it cost this time last year.
The company’s stock price fell 1.86 percent on Thursday and Peloton shares are down nearly 24 percent so far — a bigger-than-expected loss
Peloton predicts sales will reach $800 million in 2022 — a drop from 2021 revenue of $936.9 million that reflects the bike’s price cut
The forecast is well below the $1.01 billion recommended by Wall Street analysts, according to CNBC.
The company’s stock price fell 1.86 percent on Thursday and Peloton shares are down nearly 24 percent so far — a bigger-than-expected loss.
A Peleton spokesperson tried to put a brave face on the disturbing numbers in a letter to shareholders, claiming it cut prices to try to attract more customers: “We know price remains a barrier and are delighted to most popular product at a reasonable price. attractive price level for every day.’
Peloton is looking for ways to grow sales and find new customers, which has been particularly difficult after they recalled their treadmill earlier this year due to the death of a child who was pulled under the belt and the injuries of 29 others.
However, the company — which is worth $34 billion — is beginning to shift its business plan to pick up treadmill sales again, despite the fact that they were less profitable than those of its cycles.
Tread, a cheaper version of its original treadmill, will debut in the United States, Canada and the UK next week for $2,495.
The company is also rumored to be releasing additional home gym equipment, such as a rower, according to CNBC.
In June, it launched a corporate wellness program where companies can sign up and offer employees subsidized access to Peloton’s digital fitness memberships. Customized features include team tagging and group exercises aimed at fostering office camaraderie and expanding Peloton’s membership base.
Peloton recalled its $4,000 treadmills earlier this year. Tread, a cheaper version of its original treadmill, will debut next week in the United States, Canada and the UK for $2,495
Peloton temporarily stopped making their treadmills due to the death of one child and the injuries of 29 others. A video released by the Consumer Product Safety Commission shows a young boy walking behind the Peloton Tread+ with a large pink ball while a young girl sits on it, being pulled under the treadmill
Samsung, Wayfair, software giant SAP and British telecommunications company Sky were among the first to join the program, CNBC reports.
According to the news channel, Peloton has also found a problem with the way it has accounted for its inventory. An audit of their 2021 fiscal year, which ended on June 30, identified “material weaknesses” in the internal controls that govern the company’s financial reporting.
Peloton revealed disappointing first-quarter earnings prospects ahead of higher raw material costs and freight rates plus plans to increase market spending – not to mention equipment price cuts – in the coming months.
CNBC reported that Wall Street expected a loss of 45 cents per share at the end of fiscal year 2021. In reality, they lost $1.45 a share.
However, Wall Street also forecast revenue of $927.2 million and Peloton surpassed that, with revenue of $936.9 million — up 54 percent from $607.1 million a year earlier.
The company ended the fiscal year with 2.33 million affiliate fitness subscribers — people who own a Peloton product and also pay a monthly fee to access its digital workout content — up 114 percent from the previous year, according to the report. CNBC.
Digital subscriptions require no Peloton equipment and increased by 176 percent to over 874,000. The company attributed the boom to free trials.
Nevertheless, the growth rate slowed in the third quarter, partly due to the temporary discontinuation of treadmills.
Peloton founder and CEO John Foley (pictured) hopes the company will return to profitability by 2023, which is also when capital expenditures and supply chain investments will decline
Easing pandemic restrictions threaten Peloton as consumers head back to gyms and trade their home workouts for group fitness classes
The next fiscal year, Peloton will face stiff competition from other home fitness companies such as Hydrow, Tonal and Mirror. Easing pandemic restrictions also pose a threat as consumers head back to gyms and trade their home workouts for group fitness classes.
Peloton founder and CEO John Foley wrote in a letter to shareholders: “The past year was a turning point for the connected fitness industry, with a significant increase in awareness and demand following the onset of the Covid-19 pandemic.”
Foley hopes the company will return to profitability by 2023, as reported by CNBC, which is also when capital expenditures and supply chain investments will decline.