Fitness machine maker Peloton is set to trim down the price of its bikes, as people trade in DIY home gyms for the real deal.
Bikes will be some 20 per cent less expensive from this week onwards, across all its markets in the US, UK, Canada, Australia and Germany at $1,495 each.
The company’s pandemic-induced revenue surge began to slow in the fourth quarter of the year, when the home fitness boom began to recede.
At the height of the home fitness wave, due to global lockdown measures, Peloton more than doubled its sales to $4bn in the year to 30 June.
However, the company said It only a expected a revenue of $800m in the first quarter, around $200m less than market forecasts of $1bn.
Slashing the price of its flagship bike will also weigh on near-term profitability, the company said. It is the second time in a year Peloton has reduced the price of its bikes.
The news evidently rocked investor confidence when its shares dived 15 per cent.
Treadmill recall and investigation
Peloton also had to swallow the costs associated with recalling its Tread+ treadmill in May, following reports of multiple injuries and an accident which led to the death of a child.
The company admitted today that US regulators had been investigating the company earlier this year.
Peloton said that the US Securities and Exchange Commission was also probing the company’s public disclosures related to the injuries, as it has been named in a number of lawsuits associated with the recalls.
“We intend to cooperate fully with each of these investigations, and at this time, we are unable to predict the eventual scope, duration or outcome of the investigations,” the company said in a statement.