After Peloton Hit a Wall, What’s the Future of Home Fitness?

By: Keith Wagstaff · May 06, 2024 · Reading Time: 3 minutes

Not Fiscally Fit

When gyms closed during the pandemic, Peloton (PTON) experienced a meteoric rise. Back in November 2020, it announced sales had risen 232% year-over-year.

Now, Peloton faces a very different situation. Last week, its CEO, Barry McCarthy, resigned and the company announced it was laying off 15% of its workforce. And iIt’s not the only home fitness brand that’s struggling.

In March, Bowflex, which offers weights, treadmills, a digital workout app, and more, filed for bankruptcy. CEO Jim Barr blamed “macroeconomic headwinds.”

Riding Downhill

Peloton hasn’t turned a profit since December 2020. Once people could return to gyms, demand for its bikes, which currently start at $1,250, dropped off. At the same time, its fitness app faced competition from lululemon (LULU), Apple (AAPL), and other companies.

When McCarthy, formerly an executive at Netflix (NFLX) and Spotify (SPOT), took the reins in 2022, he laid off employees, closed retail stores, struck deals with Amazon (AMZN) and Dick’s Sporting Goods to sell bikes, and focused more on gaining app subscribers than moving pricey equipment.

Last year, after Peloton recalled unsafe treadmills, the Consumer Product Safety Commission hit the company with a $19 million fine. On Thursday, Peloton said that warm spring weather encouraging people to exercise outside will make the current quarter especially challenging.

The Road Ahead

Peloton said its strategy for the near future includes closing more retail stores, refinancing its debt, and investing in “software, hardware, and content innovation.”

For home fitness companies in general, the landscape is changing. At a conference in January, Planet Fitness interim CEO Craig Benson said consumers have become more interested in weights than cardio, per Axios .

When it comes to cardio, running has gained popularity. It was the most uploaded sport of 2023, according to Strava’s Year in Sport Trend Report , and the number of runners who competed in a race jumped 24% from the previous year. And while running isn’t free as such once you account for gear, and things like tracking apps or watches, it doesn’t require a fitness membership.

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