Lockdown restrictions introduced by governments across the world to try and contain the COVID-19 pandemic have helped push sales of at-home fitness bike brand Peloton past half a billion dollars for the first three months of the year – but increased costs have seen losses worsen compared to last year.
The boom in exercising at home has seen sales boom at many companies across the fitness sector and it’s no surprise that the New York City-based company, launched on Kickstarter in 2013 and which secured an IPO on the NASDAQ exchange last year, is among them.
In a letter to shareholders, the company said that sales reached $524.6 million in the first three months of 2020, the third quarter of Peloton’s financial year, up 66 per cent year-on-year.
Equipment – the company’s exercise bikes and treadmills, with their built-in screens – saw sales growth of 61 per cent to $420.2 million, with big growth towards the end of the quarter as people in its core market of the US were told to stay at home.
Subscriptions to the workouts Peloton streams to users, meanwhile, rose 92 per cent year-on-year to $98.2 million.
However, unexpected increases in costs primarily relating to shipping hit its bottom line, with losses for the quarter totalling $55.6 billion, a 44 per cent increase on the first quarter of 2018.
Sales of the treadmill were paused on 19 March, but Peloton says that the growth in orders for its bikes has continued into the final quarter of its financial year, which ends on 30 June.
The company now expects annual sales of between $1.72 billion and $1.74 billion, a $200 million increase on its previous guidance to the market.
However, it cautioned that it is having problems with actually getting orders to people who have ordered its bikes, something that it expects will continue in the fourth quarter.
The company said: “We entered Q4 with a backlog of bike deliveries in all geographies and sales continue to surpass expectations in the first several weeks of Q4 due to COVID-19,” the letter to shareholders reads.
“Unfortunately, the unexpected sharp increase in sales has created an imbalance of supply and demand in many geographies, causing elongated order-to-delivery windows for our customers.”
It added: “We do not expect to materially improve order-to-delivery windows before the end of Q4.”
The company’s studios in New York City and London and 97 showrooms in the US, Canada, UK and Canada are all currently closed.
Peloton’s share price reached record heights following the announcement of the results, a sharp contrast from the hit it took in early December when $1 billion was knocked off the company’s market value due to the backlash to its pre-Christmas advertising campaign.
The advert, which depicted a slim woman being given a Peloton bike by her partner for Christmas then giving him a present the following year of a video of her using the bike each day, was widely condemned for being sexist and reinforcing body stereotypes.
More recently, as lockdowns spread across the US and elsewhere in March, the company’s profile received a boost in the media after world number one-ranked golfer Rory McIlroy – dubbed a “Peloton stud” by Golf Digest – challenged rivals to workouts on the platform.
Simon has been news editor at road.cc since 2009, reporting on 10 editions and counting of pro cycling’s biggest races such as the Tour de France, stories on issues including infrastructure and campaigning, and interviewing some of the biggest names in cycling. A law and languages graduate, published translator and former retail analyst, his background has proved invaluable in reporting on issues as diverse as cycling-related court cases, anti-doping investigations, and the bike industry. He splits his time between London and Cambridge, and loves taking his miniature schnauzer Elodie on adventures in the basket of her Elephant Bike.