From record highs to problematic lows, Peloton’s pandemic whirlwind appears to be worsening.
The latest development: The connected fitness company has hired consulting firm McKinsey to review its cost structure. The smart bike maker is also considering eliminating some jobs.
In particular, Peloton’s apparel division and retail showrooms could be targeted.
Speaking to CNBC, an unnamed Peloton employee said: “Morale is at an all-time low… The company is spinning out so fast.”
Backslide. After rising more than 440% in 2020, Peloton’s shares declined 76% last year, cutting its market cap from $44B to $10B.
- November 2021: Peloton missed earnings estimates, scaled back FY2022 revenue forecast by up to $1B, and implemented a hiring freeze.
- December 2021: Google searches for Peloton declined, signaling softening demand for its connected equipment.
- January 2022: Pointing to weak holiday sales, analysts cut Peloton’s revenue and subscriber estimates for fiscal Q2.
Hard reset. Before charting a path forward, Peloton has to find its footing. Meanwhile, brick-and-mortar operators like Planet Fitness and Xponential Fitness are flexing on their at-home competitors, citing strong growth.