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Recall costs contribute to Peloton's losses and revenue declines

Published August 24, 2023

NEW YORK (BRAIN) — Peloton’s fiscal year has concluded with $1.13 billion in revenue, down 48% from the prior year and 64% from the year before that. 

The company’s net loss for the year was $1.26 billion, partly a result of a costly seatpost recall that was announced in May.

In the fourth fiscal quarter, revenue was $642.1 million, down from $678.7 million in the same period last year. Subscription revenue rose 10% in the quarter, but sales of connected fitness products revenue were down 25% and the number of members declined 5% to 6.5 million.

President and CEO Barry McCarthy said the seatpost recall was more costly than expected, in part because members paused their subscription. “An estimated 15,000 to 20,000 of our 2.2 million impacted members elected to pause their monthly subscriptions in Q4 pending the receipt of a replacement seat post,” he said in a letter to shareholders.

The company said the seatpost recall had cost $48.4 million so far, and costs could increase. The company also still is facing costs related to an earlier recall of the Tread+ treadmills. The company announced the Tread+ will return to the market in time for this year’s holiday season, retailing for about $6,000. 


Topics associated with this article: Earnings/Financial Reports

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