It was the storm we all saw coming – Peloton got a huge blow in the first quarter as demand for home fitness equipment continues to fall from record highs amid pandemic lockdowns and restrictions.
The company lost a whopping $757 million in the quarter, with revenue declining more than 15% year-over-year over the same period.
The reason is simple: too much stock and too little demand, like the company predicts only $700 million in sales for the second quarter, sending shares plunging as much as 15% during early trading hours on Tuesday.
Related: Paddling up a steep hill: Peloton cuts thousands of workers and offers them a free 1-year subscription
“As discussed last quarter, we expected fiscal 2022 to be a very challenging year to forecast given unusual year-ago comparisons, demand uncertainty amid reopening economies and widely reported supply chain constraints and pressures on commodity costs,” it said. Platoon CEO Barry. McCarthy said in a letter to shareholders† “While we are pleased to have delivered results in the first quarter that slightly exceeded our expectations, a softer-than-expected start to the second quarter and a challenging view of our near-term operating performance lead us to reassess our outlook for the fiscal year. to calibrate.”
But this isn’t the most shocking news for the company that has had its share of public scandals and poignant moments, including recalls, ill-timed commercials and unexpected leadership changes. This is what led the company to the position it is in today.
June 2021: A new report shows hackers can spy on users while using their bikes and treadmills at home
“The issue reported to us by McAfee requires an attacker to connect directly to one of the USB ports on the tablet on the Bike+ or the Tread,” said Adrian Stone, VP and head of global information security at Peloton , said in a statement when the security issue first became public. “They could then modify the software on the device and then install malware or access data communicated between the device and our services.”
Peloton assured users that the problem was “already fixed” as users would be prompted to install a new software update that would nip the problem in the bud.
August 2021: DOJ launches investigation into Peloton for injuries sustained by customers on their Tread+ devices
The company admitted it had been sued by the DOJ for reported injuries via an SEC filing.
Related: Report says hackers can spy on you when you’re on your platoon bike, treadmill
“We have received reports of a number of injuries related to our Tread+ product, one of which resulted in the death of a child. In April 2021, the U.S. Consumer Product Safety Commission (“CPSC”) warned consumers about the safety risks of the Tread+ and is continuing to investigate the matter. We are also subject to investigations by DOJ, DHS and the SEC regarding this matter. We intend to cooperate fully with each of these investigations, and at this time we cannot predict the ultimate size, duration or outcome of the investigations,” the file said.
December 2021 and January 22: PR nightmares arise during the heart attack blunders
Both And just like that… and billions showed main characters having heart attacks while using a Peloton bike.
Peloton even tried to clap back with a commercial in which Mr. Pig from the Sex and the city reboot and showed him that he was still alive.
However, the damage was already done by then.
February 2022: CEO John Foley resigns, 2,800 employees laid off
The company announced that founder and CEO John Foley would step down and cut 20% of its workforce.
“Peloton is at an important crossroads and we are taking decisive steps. Our focus is on building on the already great experience of Peloton members, while optimizing our organization to deliver profitable growth,” said Foley in a statement. company statement then. “With today’s announcements, we are taking action to ensure Peloton takes advantage of the great long-term connected fitness opportunity. This restructuring program is the result of careful planning to address key areas of the business and realign our operations so that we can execute our growth opportunities in an efficient and disciplined manner.”
The company reportedly offered laid-off employees a free one-year subscription to its services as compensation.
April 2022: Subscription prices rise, equipment prices fall
The subscription price for all-access Peloton in the US, effective June 1, this year, will increase from $39 to $44 per month and will remain the same for international members. For those who don’t have Peloton equipment, the subscriptions remain at $12.99 per month.
Last month, Peloton slashed the prices of its bicycles and treadmills, with the former dropping from $1,745 to $1,445 (including a $250 shipping and installation fee), the Bike+ from $2,495 to $1,995 and the Tread machine from $2,845 to $2,695 (Includes a $350 shipping and setup fee.)
Related: Peloton Claps Back On Gruesome ‘Sex and the City’ Reboot Scene: ‘He’s Alive’