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.
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?