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Peloton Bike and Treadmill Sales Slow As People Return to Gym

  • Peloton reported weaker-than-expected earnings results on Thursday, sending its stock price lower.
  • The company is facing more challenging conditions as the world reopens and people return to gyms.
  • Data shows that foot traffic to fitness centers in the US is reaching 2019 levels. 

Peloton’s pandemic-fueled sales peak is officially over.

The high-tech fitness company reported weaker-than-expected first-quarter earnings results and lowered its forecast for fiscal 2022 on Thursday, sending its stock price down by as much as 33% in premarket trading on Friday

Sales of its connected fitness products – its high-tech treadmill and bike – fell by 17% during the quarter. It also saw its smallest quarterly gain in connected fitness subscriber growth since the company went public in September 2019.

After blockbuster growth at the height of the pandemic, the company is under pressure to keep the momentum going as the world starts to return to normal and customers have the option to head back to gyms.

In a call with investors on Thursday, Peloton CEO, John Foley, acknowledged that the coming year would be hard to forecast because of unusually high demand in fiscal 2021.

The company is confident that the consumer shift to at-home fitness services is still in its infancy and there is plenty more room for growth.

“This trend was well-underway prior to the pandemic, and has clearly been accelerated by the growing awareness and adoption of connected fitness,” Peloton said in a statement Thursday.

But data shows that customers may be tiring of home workouts and are choosing to return to gyms. According to foot traffic data from Jefferies, visits to fitness centers in the US are returning to 2019 levels. Gym visits were down by about 8% in early October compared with the same period in 2019, according to the firm.

“We’re definitely seeing clear data that show people are getting comfortable again to return to the gym,” Jefferies analyst Randal Konik told CNBC.

“What’s likely going to happen is demand for gyms will accelerate pretty dramatically,” he said, while demand for at-home fitness equipment “is likely to stay somewhat strong.” 

Earlier Thursday, gym chain Planet Fitness reported its third-quarter results and celebrated a near return to its pre-pandemic peak in terms of membership numbers. It currently has 15 million members – at its peak, it had 15.5 million. 

“People are choosing bricks and mortar. They’re coming back faster than we’ve ever seen. They’re rejoining our clubs faster than we’ve ever seen. The Gen Z’s are joining faster than we’ve ever seen,” CEO Chris Rondeau said on CNBC’s Mad Money.

“All the winds are blowing the right direction, and the sails are wide open,” he said.

https://www.businessinsider.com/peloton-bike-treadmill-sales-slow-gym-pandemic-covid-2021-11