Peloton Interactive’s stock price plummeted on Thursday on news that the business would no longer be making its home workout equipment due to falling demand.
which relied on unnamed corporate documents, Peloton will temporarily cease production of its entry-level connected bike next month for a duration of two months and production of its basic treadmill for six weeks. According to the media outlet, the company has no plans to produce any of the more expensive Tread+ machines in fiscal year 2022.
After a child’s death was related to the Tread+ and dozens of individuals were injured with fractured bones, lacerations, and abrasions, Peloton recalled both of its treadmill models in May 2021. Multiple incidences of humans and animals being pushed beneath the treadmill prompted the U.S. Consumer Product Safety Commission to issue a warning to customers the previous month to discontinue using the machines with children and pets.
John Foley, co-founder and CEO of Peloton, issued a statement late Thursday disputing reports that the firm has ceased production of cycles and Treads. Nonetheless, he confirmed that an internal review of Peloton’s organisational structure and staffing levels is underway.
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Peloton is most well-known for its home-workout bike, the Tread, which was released in 2018. The Tread+ features a screen that allows customers to watch live or recorded sessions while riding. After going public in 2019 to the delight of its loyal clientele, the company’s stock soared to $167 by the end of 2020 as Americans fled the COVID-19 pandemic and began working out in the comfort of their own homes.
In 2021, Peloton had already surpassed $4 billion in annual sales thanks to its rapid expansion. Despite the company’s best efforts, it was unable to turn a profit despite investing heavily in marketing to increase its share of the U.S. and international markets.
In a December reboot of the “Sex and the City” series, a character played by actor Chris Noth had a fatal heart attack while taking a spin class on one of its bikes, drawing attention to those efforts and sparking controversy.
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The global disruptions in the supply chain have resulted in a number of operational difficulties for Peloton, such as component shortages and increased transportation costs. The stock price of the company has dropped by 71% in the past year.
Peloton lost $376 million on $805 million in revenue in its most recent reporting period. On February 8 the corporation will reveal its financial results for the second quarter.