New York (CNN Business)Peloton’s turnaround plan can’t happen fast enough: The at-home fitness company continues to lose money — and it’s quickly running out of cash.
The once-hot company reported a dismal quarterly financial report Tuesday, with sales tumbling 15% from a year ago. Peloton lost $757 million last quarter.
Peloton (PTON) said it had just $879 million in cash in the bank at the end of the quarter, which has left it “thinly capitalized,” CEO Barry McCarthy said. That forced the company to borrow a significant amount of money from Wall Street to keep its operations running.
As people return to gyms, Peloton has been struggling to maintain its electric growth from the early days of the pandemic. Bike and subscription sales have stagnated. The company has too much inventory, and demand is on the decline.
Peloton is burning through cash and borrowing from Wall Street to stay afloat – CNN
I never liked Peloton. To me it has always been way overpriced, way snobbish and then they started to lock down your machine unless you forcibly paid an extra “safety for the children” fee. The Peloton bike, the standard bearer of the company is on sale for measly $1,195 dropped from $1,495. The full privilege membership at Planet Fitness which allows you to use all the machines anywhere in the world plus spa, sauna and all the crap they have is $700 a year. Or if you are cheap like me and just go for the Basic Fully Paid, you spend $158 the first year and then drop to $79 per year, that comes to a bit over $10 a month the first year and then $6.60 after that and you get to use all the damn equipment 24 hours a day at your local PF.
The expenditure of one Peloton bike equals a 14 year Basic subscription to Planet Fitness and all its machines.
Does not make sense a whole lot, does it?
I have family I’ll not name who got one of these for Christmas more as a “I want it but I’ll say I’m getting it for you” gift. It’s currently acting as a clothes rack and has been for a good while. The subscription was just the cherry ontop of the decadent insult cake.
The fun part is they live between a giant well maintained park and miles of nature trails.
I always thought the Peloton bikes were ridiculously overpriced and their video workouts were unrealistic. People got them because the commercials made it the Cool Thing to have.
The coolness factor only works for so long, and then you need to have a sound business.
I got a stationary bike from my brother, it only had 7 miles on the odometer. His wife wanted it and then my wife thought it’d be great for her. When I gave it away, it was worn out, had 9 (nine) miles on it. ROFLMAO
First time I saw the costs of pelotons system, I thought a person had to be really stupid to get into that.
Don’t forget the value of your time to get to and from the gym, if it isn’t on the way to or from someplace you’re going anyway. A dedicated outing from here to the nearest Planet Fitness would be about 45 minutes round trip, which would eat into the schedule considerably.
On the other hand, I don’t need a fancy expensive high-tech stationary bike; I can get quite a workout with a basic low-tech shovel. (Spade, whatever.)
… Almost time to do some more garden-related exercise. A spade is involved (as well as consumables in the form of heavy sacks of soil amendments and mulch).
Peleton is designed for big city apartment dwellers. Why should I pay for the bike, then pay to watch some overpaid fitness instructor in NYC bark at me on a video screen? I’ll go outside and walk, or do some yardwork. That’s free, and only I get the benefits.
Peleton was, and still is, the single biggest waste of money I think I have ever seen.
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It is a stationary bike. You can get one for free off of local classified, for a small charge, or if you want a brand new one, they can be had for a few hundred.
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Oh, I know, the workouts. It is about the workouts. Well… news flash. You do not need a Peleton bike to subscribe to their service/classes. Any stationary bike will do. But… why subscribe?
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Look at YouTube and there are literally hundreds of spin/bike workouts you can ride along with. Thousands. What is the difference? They are not live. (Then again, neither is most of the Peleton stuff), and because they are not live, the instructor will not call you out by name to congratulate you for your 50th ride, or some other BS. If that motivates you, great, spend the cash, but seriously, why?
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Peleton is just another status symbol. I am old enough to remember Tae Bo, Tony Little, Richard Simmons, and Jillian. And, guess what? Overpriced, and duplicated on You Tube, all of them.
Just a bit of perspective:
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Everyone rips on the ammunition producers for not ramping up production. We’re in an ammo drought, certain calibers are (still) hard to find, and prices are only going up.
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But every drought comes to an end, and investing a lot of coin and man-hours into increased production capacity isn’t always a good long-term choice. After the drought ends, a lot of that equipment and manpower may end up sitting idle to prevent a market glut/oversupply.
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Peloton acted as though the pandemic would last forever. They invested in boosting production and late into the two-year lockdown were meeting demand. But soon, the gyms started re-opening, and now they have excess inventory they can’t give away, and it’s almost certain their manufacturing facilities are being scaled back down.
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Ammunition manufacturers would have been in that same boat if they had expanded when gun owners were panic-buying under Obama or the threat of Hillary. When Trump took office and the demand was greatly reduced, they’d have been holding excess inventory they’d barely have been able to sell at cost.
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(To be clear, I think ammo manufacturers should increase production capacity. But only by maybe 10%, and only if their supply chains can support it. Certainly not doubling [or more] like many — most of whom don’t understand cyclical demand or supply chains — wish they would.)
P.S.: Tam made the same connection. (read her last paragraph)