Peloton headwinds stiffen as people break pandemic routines
ABC News
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 has shares tumbling more than 20% before the opening bell
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 more than 20% before 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.
On Tuesday the company announced a binding commitment letter with JP Morgan and Goldman Sachs to borrow $750 million, but new CEO Barry McCarthy said in a letter to shareholders Peloton ended the quarter with $879 million in cash, “which leaves us thinly capitalized for a business of our scale.”