Just a few years after rapid growth and success, fitness unicorn Peloton is struggling with flat sales and controversy. Analysts say the company’s latest strategy won’t help it overcome or overcome its problems.
company announced Wednesday plans to partner with Hyatt to install its equipment in more than 800 hotels in the U.S., Canada, UK, Germany, Austria and Australia, allowing Hyatt rewards program members to earn points for using the equipment. is. Approximately half of the store rooms will have televisions showing Peloton fitness content.
The announcement comes a day before Peloton’s first-quarter earnings report, which the company is expected to release. 3.75% sales loss. Neil Saunders, managing director of retail at GlobalData, said: luck While this partnership may help increase exposure for Peloton, it likely won’t lead to new sales.The company reported 2023 sales of $743.6 millionThis is down from $792.7 million a year ago, but it expects revenue to return to growth by June.
“The products are very expensive,” Saunders said. “Many consumers who want one already have it and are not in the market to buy a new Peloton product.” Peloton Bikes Cost is $1,445the Bike+ costs $2,495, which is still cheaper than Peloton Row’s $2,995.
“While these deals and partnerships are beneficial to Peloton, they don’t really change the fundamental trajectory of the company,” he added.
The partnership with Hyatt is one of several strategies Peloton has adopted to revive the company’s stagnant growth. In addition to similar partnerships, 5,400 US Hilton hotelsPeloton is leaning retail partners Selling your own products, like Dick’s Sporting Goods and Amazon, takes the pressure off companies. A failed brick-and-mortar showroom.They quietly disbanded last month. free membership Less than a year after the app was introduced, the app failed to attract paid members.
Peloton’s decline was almost as rapid as its rise. At its peak in January 2021, Peloton’s market cap soared to over $45 billion When lockdown forced people to seek out virtual group cycling classes. It has since lost 90% of its value, hovering around $1.14 billion, but has barely maintained the unicorn status it achieved after the crash. 2017 funding round The valuation rose to $1.25 billion. The company’s stock price has fallen to penny stock status at $3.11 per share, which is only part of the $29 IPO.
Peloton didn’t respond luckThis is a comment request from .
unfriendly market
Peloton, founded in 2012 as a fitness equipment company with an interactive platform, has boomed during the pandemic thanks to gym closures and remote work.For that 172% explosive sales In the first six months of 2020, Revenue $1.82 billion That year, it more than doubled to $4 billion. But Peloton didn’t know what to do to achieve rapid success, said Jessica Ramirez, senior retail research analyst at investment firm Jane Hari & Associates.
“I don’t think they thought [about] What will happen after the pandemic?” Ramirez said luck. “When you’re growing a company, you always have to think about the future…because consumers change. Consumers are always changing.”
The company’s stumbling blocks also included a series of controversies, including: sex and the city Peloton ad star Chris Noth was accused of sexual assault in 2021, and the company announced draw a campaign.peloton I remembered The company’s Tread Plus treadmill was launched the same year it was involved in a fatal child accident. Co-founder John Foley will step down as CEO in 2022. purring He claimed he was unable to accurately predict the market and address product recalls. His successor, Barry McCarthy, fired thousands of employees and outsourced operations to third parties to bring the company back into the black.
Even behind the pandemic, scandals and corporate restructuring, Ramirez isn’t convinced the market will be kind to Peloton.
“I think it’s hard to sell Peloton in today’s environment just because consumers are going about their daily lives,” she said.
but also Reduced remote work opportunities People who continue to work from home want to get out of the house and find community in a fitness environment, especially outdoor activities like running.How the running app Strava arrived at this 100 million users By July 2023, the base had doubled in just two years. Nike app users are done 5 million strong. Ramirez said running is not only becoming more popular, but it’s also becoming cheaper and requires only a pair of sneakers.
Success cannot be expected by combining fragments of the recent past. “To be honest, I don’t think this trajectory is very good for the peloton,” Sanders said. “I see this as a company that will continue to shrink, a company that will have to make some very difficult restructuring decisions, and a company that will continue to have low or no profits for the foreseeable future. .”
Redefining success
Despite Peloton’s fair share of problems, Simeon Siegel, managing director and senior retail analyst at BMO Capital, isn’t ready to call Peloton a failure. Too often, shareholders and consumers pass judgment on companies based solely on high initial expectations.
“We judge them relatively,” he said. luck. “Compared to what this business promises, [Peloton] Obviously disappointed.for work, it was a success story. ”
There aren’t many fitness companies that can boast about creating a compelling product. 3 million subscribersargued Siegel. Analysts agreed that Peloton has a superior product and consistent consumer loyalty. In Siegel’s eyes, Peloton will be a failed company if it doesn’t rely on his loyal following and chase growth that doesn’t exist.
“The company has an underlying business that brings in a lot of money,” he said. “Most companies facing challenges can’t say that.”
