Peloton expects to lose $ 165 million in revenue due to recall – fr

Peloton expects to lose $ 165 million in revenue due to recall – fr

NEW YORK – Peloton said on Thursday that the recall of its treadmills will reduce revenue by $ 165 million in the current quarter.

The company agreed to recall around 125,000 of its Tread + treadmills on Wednesday, after refusing to do so for weeks as the machine was linked to the death of a child and the injuries of 29 others. Peloton also agreed to stop selling the treadmills.

In a call with Wall Street analysts Thursday, CEO John Foley again apologized for not working with the security committee earlier. He acknowledged that there was work to be done to repair Peloton’s image.

Last month, the US Consumer Product Safety Commission warned people with children and pets to immediately stop using the Peloton Tread + treadmill after a 6-year-old was pulled under the back of the treadmill and died. The other children’s injuries, which were also shot under the Tread +, included broken bones and cuts.

The Safety Commission, which is still studying the Peloton Tread + treadmill, said its design, including the strap and its height from the ground, made it more dangerous than other brands.

Peloton said the $ 165 million in revenue this quarter includes $ 105 million in missed treadmill sales and $ 50 million that will be used to provide full reimbursement to those who wish to return the recalled treadmills, which cost $ 4,200 each.

The company estimates that around 10% of the recalled treadmills will be returned by the end of June, but said more could be returned later as people have until November of next year to get a full refund.

Peloton, best known for its stationary bikes, saw sales skyrocket during the pandemic as virus-wary people avoided gyms and worked out at home.

On Thursday, the company said sales soared 141% to $ 1.26 billion in the quarter ended March 31, compared to the same period a year ago. It posted a loss of $ 8.6 million in the quarter, or 3 cents per share, which was better than the loss of 11 cents per share expected by Wall Street analysts, according to Zacks Investment Research.

Shares of New York-based Peloton Interactive Inc., which are down 45% year-to-date, rose nearly 6% after hours on Thursday.


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