Peloton Continues Its Downhill Ride As Revenue Drops For A Third Straight Quarter

Contents

Summary

7 best fitness tracking apps that don’t require a subscription

Working to make exercise fun and engaging

Why go to spin class when you have spin class at home?

I tried the NexGym 15-Day Fitness Program, and it’s more intense than you think

Summary

Peloton faced significant declines post-lockdown, with a stock price plummeting to under $7 per share.
The company is struggling to regain investor confidence with declining revenue and hardware sales.
Despite challenges, Peloton remains profitable, focusing on cost-cutting measures and new leadership hires.

For some reason, a bunch of people were stuck in their homes bored from 2020 to early 2021. With few healthier ways to occupy one’s time alone than exercise, Peloton seized the day, and its premium, user-friendly exercise bikes and other workout equipment became practically a thing of legend.

Peloton didn’t die when the lockdown lifted and demand shifted. But fluctuating trends and a handful of injury controversies did cause it to collapse almost completely. Once traded at over $160 per share, the once-beloved manufacturer of premium exercise equipment saw its stock price settle south of a paltry $7. It’s trying to mount a comeback, and hired a new CEO, Peter Stern, in January, but it’s looking like an uphill battle. The latest financial report outlines the company’s third straight quarter of declining revenue — but it’s still turning a profit, and looks to continue clawing its way back into investors’ good graces (Source: Bloomberg).

7 best fitness tracking apps that don’t require a subscription

These apps offer great features without locking the basics behind a paywall

Working to make exercise fun and engaging

Why go to spin class when you have spin class at home?

A smartwatch on the wrist of someone riding a stationary bike.

Source: Samsung

Peloton equipment pairs easily with wearables like Samsung Galaxy Watches.

The third straight report of falling revenue left investors shook, and resulted in a nearly 17% drop in share price almost immediately — the biggest dip for Peloton in almost a year. Hardware sales dropped by 27% over the last three months, and app subscriptions by 4%. With its exercise hardware produced in Vietnam and apparel imported from China, the company also foresees tariff implementations cutting up to $5 million in its cash flow over the fiscal fourth quarter, which runs from April to June.

“During this period of economic uncertainty, we believe Peloton is well-positioned to maintain its leadership within the global fitness and wellness industry.” Peter Stern, Peloton CEO

Impressively, though, Peloton’s projected annual revenue of just below $2.5 billion leaves room for over $300 million in earnings. Despite slow subscriber growth, the new CEO has managed to keep the company profitable by focusing on cost-cutting. A new Chief Operating Officer (in oversight of the supply chain) has already been hired, and plans for a new head of marketing are apparently underway.

Rebuilding a nearly evaporated company can be slow-going, though. If Stern is able to drag Peloton back from the brink and return it to the forefront of the modern exercise zeitgeist, it could be quite the case study of success.