The CEO of the company took a break from the quiet period to address a number of reports related to poor device sales. The executive denied that the company was going to stop production of its entire bicycle and treadmill line.
There are rumors that we are stopping all production of bikes and treads.
In the middle of a once-in-a-hundred year event with the COVID-19 pandemic, what we anticipated would happen over the course of three years happened in months during 2020.
>
Thanks to how hard you worked, we were able to meet the demand head-on at a time when the world really needed us. As we evolve to more seasonal demand curves, we are adjusting our production levels for sustainable growth.
In a separate statement, he states:
As we discussed last quarter, we are taking significant corrective actions to improve our profitability outlook. We will be moving to a more variable cost structure, improving gross margin, and identifying reductions in operating expenses as we build a more focused Peloton.
He says that the firm expects to give more information about the moves when it reports its earnings on February 8. The executive was careful to push back on the report that production on all four of its bicycle/treadmill devices will halt for weeks or months.
Reports of restructuring and layoffs were acknowledged by the consulting firm, McKinsey. He writes that in the past they said layoffs would be the last lever they would ever hope to pull. We need to evaluate our organization structure and size with care and compassion. As part of our efforts to make our business more flexible, we are considering all options.
Reports of increased adoption have been seen as confirmation that Peloton overplayed its hand. The company experienced a drop in shares last year, following a huge rise in 2020, due to the strength of the pandemic demand.
All Rights Reserved © 2024
