Peloton is now pedaling to Amazon shoppers

Peloton is now pedaling to Amazon shoppers

Peloton is now pedaling to Amazon shoppers

It sounds like more bad news for Peloton as the once-thriving exercise company continues to fly downhill – and fast.



Ezra Shaw | Getty Images

The company reported fourth-quarter 2022 earnings, which came in at a net loss of $1.2 billion (including the company’s $415 million attributed to restructuring changes) and a 28% decline in revenue. compared to the same period a year earlier, making it the company’s sixth consecutive year. quarter of the shortfall.

Peloton also predicted that it would not break even in cash flow until the second half of fiscal 2023.

“The loss reflects the substantial progress we have made over the past quarter in reorganizing the business to reduce current and future excess inventory, converting fixed costs to variable costs and resolving numerous supply chain issues. supply,” Peloton CEO and Chairman Barry McCarthy said in a letter to shareholders. “This progress, along with the reduction in cash burn, is the positive story behind the overall loss.”

McCarthy then discussed the layoffs that hit the company earlier this month (about 760 employees) and how releasing those employees would open up space to cut expenses, before announcing that the company will hire Liz Coddington as Chief Financial Officer of Peloton, formerly of Amazon’s AWS Division.

The announcement comes as no shock, as on Wednesday Peloton revealed that it would be partnering with Amazon to start selling its popular bike ($1,445) and Peloton Guide strength training program ($295) and accessories like dumbbells, water bottles and resistance bands across the retailer marking Pleoton’s first-ever partnership with a third-party retailer.

Moving away from direct-to-consumer might once have seemed bleak for the recognizable brand, but now feels opportunistic.

So opportunistic, in fact, that Peloton shares soared more than 20% on Wednesday on the news.

“Yesterday we announced that first-generation bikes, guides, apparel and accessories are on sale on amazon.com in the United States. Amazon has become the number one default shopping destination for hundreds of millions of customers around the world,” McCarthy told the shareholder on Thursday. letter. “Our Peloton store on amazon.com will bring a selection of our products closer to US Amazon customers and allow us to act directly on the fitness-related shopping queries that occur weekly on Amazon.”

Peloton’s Bike+ and Tread will still only be available through Peloton, direct to consumer.

But on Thursday’s news of mounting losses, the company’s shares fell another 20%.

Still, McCarthy remains optimistic about the company’s future, despite continued loss forecasts throughout the year and beyond.

“If the past is any prologue, we will continue to evolve our operating model and improve our management of the business, including our approach to managing retail stores, third-party distribution, international, apparel, and corporate health and well-being. But when, over time, we look in the rearview mirror, I think the fourth quarter will have been the culmination of write-offs and restructuring charges related to inventory and supply chain issues and the beginning of the comeback story for Peloton,” he wrote.

For those who have followed Peloton’s downward spiral over the past year, this comes as no surprise – the brand has essentially been in freefall thanks to several factors, including massive layoffs and restructuring changes (including the departure of CEO John Foley), rumors of an acquisition by Nike or Amazon, multiple lawsuits for insecure equipment, and the cessation of production of certain weight machines.

“A lot has changed at Peloton in a relatively short time. I understand that. I know that sometimes comes with a lot of adversity and challenges,” former CEO John Foley said of the company more early this year. “However, I deeply believe that going back to basics, in many ways, will help us execute with precision and innovation, and it will have an even greater long-term impact for all of us who are part of the Peloton journey.”

As of Thursday afternoon, Peloton was still down 19% 24-hours and 90% year-over-year.

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