Peloton Sees Apparel Sales Slow

Peloton has slashed yet another sales forecast — this time apparel.

Pointing to the power of its community and ability to diversify revenue, the smart biker maker saw apparel as a key growth vector.

• Peloton first began selling clothing in 2014, partnering with activewear brands.
• By 2020, it was selling 600K units of branded apparel in a single quarter.
• Last year, the company launched its own private-label apparel brand.

For context: From 2020 to 2021, revenue from Peloton’s apparel business doubled, reaching $100M in sales. In a January 2021 interview, CEO John Foley reported that clothing was “growing faster than the rest of the business.”

What’s happening: In recent documents obtained by CNBC, an expected twofold YoY increase has been significantly downgraded, from $200M to $150M. The internal report cites supply chain disruptions, as well as predicting a softening of demand for athleisure as more people venture beyond the home.

Elsewhere, however, all signs point to a growing demand for activewear. With the global activewear sector set to reach $546B by 2024, brands from Nike and lululemon to Gymshark and Alo Yoga have benefited.

What it means: It looks like another market correction for Peloton, who rose to extraordinary (and unsustainable) heights because of pandemic-juiced demand.