As of: 08/27/2021 10:27 a.m.
At the fitness equipment manufacturer Peloton, there are clear signs that the corona boom is subsiding. Growth is slowing and competition in the home device market is increasing. And there are other problems.
In the Corona crisis, the US fitness equipment manufacturer Peloton was one of the big beneficiaries with networked training bikes and fitness equipment for home use in view of closed fitness studios. The company’s business model also includes selling monthly subscriptions for training hours. The result: Peloton achieved high growth rates. The rush of customers was enormous. But after the boom in the Corona crisis, the growth is now slowing down significantly.
In the past fiscal quarter to the end of June, the company increased sales year-on-year by 54 percent to $ 936.9 million, which corresponds to 797 million euros. In the previous quarter, however, it had more than doubled to over a billion dollars. The peloton share price initially plummeted sharply on the stock exchange.
The bottom line is a loss
The violent price reaction shows how much the dynamics in the financial markets are determined by expectations and hopes. An increase in sales, which would be a great success for many other companies, can, under certain circumstances, be considered a bitter disappointment.
But it is not just the possible end of the corona boom that is causing problems for the company. The peloton management warned that higher costs and sharp price reductions for some products are likely to weigh on the balance sheet in the current quarter. Peloton is confronted with increasing competition in the market for fitness equipment for home use, which is probably one of the reasons for the strong discounts on workout bikes.
Another reason for nervousness among investors was the fact that Peloton admitted an unspecified accounting problem. The company didn’t make any money in the past quarter either, with a loss of $ 313 million.
Problems with the treadmill
In addition, stores recently suffered from a temporary halt in sales of the Tread + peloton treadmills, which had to be recalled in May due to a number of accidents. The $ 4,000 Tread + treadmill has been classified as dangerous because it could pull children under the back roller of the treadmill.
With the somewhat cheaper Tread model, the screen could break off and injure the user, warned Peloton and the US consumer protection agency CPSC. In Germany, Peloton does not sell the treadmills, but restricts itself to its training bikes.