Peloton’s uphill struggle to generate sales as more people break from health routines forced during the pandemic continued in the third quarter and the company’s revenue outlook sent shares tumbling 17% at the opening bell.
The maker of high-end exercise bikes and treadmills thrived during COVID-19 outbreaks and sales growth for the New York City company doubled in 2020 and surged 120% in its last fiscal year.
The availability of vaccines and easing of COVID-19 restrictions, however, have opened up more workout options and Peloton has suffered. In February the company announced a major restructuring and abandoned plans to open its first U.S. factory, which would have employed 2,000 workers in Ohio. Co-founder John Foley stepped down as CEO and the company said it would cut nearly 3,000 jobs.
The latest data Tuesday raised more questions about how the company will move forward.
“After a couple of years of adoration, Peloton now finds itself in the unenviable position of having to justify its business model is both relevant and operationally sound in a post-pandemic era, said Neil Saunders, managing director of GlobalData. “Quite frankly, the jury is still out on both counts – but today’s results do nothing to make investors lean towards a favorable verdict,”