Peloton’s stock price fell by as much as 25 per cent following reports that the company was halting production of its fitness products.
The firm is taking the action as consumer demand for its connected bikes and treadmills slows and it looks to control costs, according to internal documents seen by CNBC.
Peloton, which became a popular pandemic purchase as people exercised at home, plans to pause production of its Bike in February and March, said CNBC.
It had already paused production of its premium Bike+ in December and will continue that until June.
It will also pause production of its Treadmill for six weeks beginning in February, and will not manufacture the Tread+ at all in 2022.
The company has been left with thousands of bikes and treadmills in its warehouses and is trying to reset its inventory levels, according to CNBC.
“It is clear that we underestimated the reopening impact on our company and the overall industry,” Chief Financial Officer Jill Woodworth said on Peloton’s last earnings call in November.
In a confidential presentation dated 10 January, the company stated that demand for its equipment has seen a “significant reduction” due to increased competition and shoppers price sensitivity, says CNBC.
Peloton recently announced that it would add $250 and $350 in delivery and set-up costs to its original Bike and Tread, blaming the increases on supply-chain costs.
The Independent has reached out to Peloton, which is due to report its earnings on 8 February, for comment.
