Peloton Can’t Stop Destroying Itself
Peloton's stock has plummeted 89% over the past five years, contrasting sharply with the S&P 500's 91% increase. The company has struggled post-pandemic, posting heavy losses and a recent revenue decline of 6.6% to $610 million. Despite a slight net income of $21.6 million, Peloton anticipates further revenue shrinkage and has laid off 6% of its staff as part of a $100 million cost-cutting plan. CEO Peter Stern's comments suggest a lack of direction, and the company faces additional challenges from tariffs.
During the COVID-19 pandemic, Peloton (NASDAQ: PTON) bikes were popular among people who could use them and afford them at home. Once the pandemic ended, the theory goes, people went back to gyms. Whatever the reason, Peloton’s stock is down 89% in the last five years. The S&P 500 is 91% higher.
- Peloton Posted More Bad Earnings
- The Company Keeps Getting Smaller
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Peloton has tried a number of things to recover. For a while, new prosperity might have been found from selling its equipment at Dick’s Sporting Goods (NYSE : DKS). Then it cut a deal with Amazon (NASDAQ: AMZN). It also set up an arrangement to have its bikes at Hilton Hotels.
Peloton posted heavy losses from 2022 to 2024. It may have turned a corner, but its latest financials show it is too early to say. Its revenue for the most recently reported quarter was $610 million, down 6.6%. How much smaller can it get? The chance of a turnaround is unlikely.
Peloton did squeak out the tiniest of net incomes at $21.6 million. It does not make up for the hundreds of millions of dollars the company has lost. The company also said its revenue for the year would shrink.
CEO Peter Stern made the oddest of comments, “A profound shift is underway in how we define a life well-lived.” Thank you for nothing, Mr. Stern.
Mr. Stern could also not help laying off what CNBC says is about 6% of staff. It is part of a plan to cut another $100 million in expenses. Clearly the company believes it is in bad shape. To make matters worse, Peloton will be affected by tariffs.
Stern might as well leave. There is no reason for Peloton to bother with another CEO who can’t save the company.
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