NEW YORK (AP) – Peloton’s shares tumbled on Thursday after a media report said the exercise and treadmill company was temporarily halting production of its connected fitness products amid waning consumer demand.
Shares fell nearly 24 per cent, or USD7.62 to USD24.22 on Thursday on the report.
Peloton Interactive Inc plans to pause production of its main stationary bikes for two months, from February to March, according to CNBC, citing internal documents. The news site said that it already halted production of its more expensive Bike+ in December and will do so until June.
It won’t manufacture its main treadmill machine for six weeks, beginning next month. And it doesn’t anticipate making any of its more expensive Tread+ treadmill machines in fiscal 2022, according to CNBC.
The move is the latest in a string of bad news for Peloton, which was one of the early pandemic success stories.
In May, it halted production of its Tread+ treadmills, after recalling about 125,000 of its treadmills less than a month after denying they were dangerous. One was linked to the death of a child, while others were linked to injuries of 29 others.
Last August, the company cut the price of its main stationary bike – the product that was the cornerstone of its original popularity – by USD400 because of slower revenue growth.
In November, the company slashed its annual sales outlook, noting it expected annual sales of USD4.4 billion to USD4.8 billion in fiscal 2022, which ends in June. It originally had expected USD5.4 billion.