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UNITING THE WORLD OF FITNESS
Health Club Management

Health Club Management

News

Peloton hits its first big hurdle as the company grapples with growing pains

Shares in Peloton have fallen after the company revealed it was cutting the price of its original Bike to US$1,495
Results for Q4 saw a loss of US$313.2m against profits of US$89.1m last year
Peloton also predicts its expenses will increase during 2022, impacting margins
The company recalled its treadmill recently in the US, following the death of a child

Shares in Peloton have fallen after the company revealed fourth-quarter losses. It also said that tactical changes to the business will hit profits until 2023.

Fourth-quarter results saw the company reporting losses of US$313.2m against profits of US$89.1m a year ago in spite of revenues having increased 54 per cent to US$936.9m.

Peloton is lowering the price of its original Peloton Bike across all markets to US$1,495 (€1,495, £1,350 GBP) – it's also introducing a longer, 43-month, 0 per cent financing term option for Bike+ and Tread across all regions.

In its financial update to investors, Peloton said: "In the near term, our profitability will be impacted by the price decrease in our original Bike, significant increases in commodity costs and freight rate increases, a sales-mix shift to Tread, investments in marketing to broaden our appeal, accelerated investments in new products and features, investments to scale our member support and logistics operations, and significant investments in systems to support our growth.

"Looking ahead, we expect to return to Adjusted EBITDA profitability for full year 2023.

"Connected Fitness Margin in Q1 will also be significantly impacted by last-mile delivery costs, given the seasonality in our business.

"Peloton’s last-mile logistics is an important aspect of our member experience, but the fixed investments in warehouses, vehicles and people in our delivery network are carried throughout the year.

"Therefore, we will experience fixed-cost inefficiencies during our smaller volume first quarter, but expect significant leverage of these expenses in the remaining quarters of FY 2022."

Following the announcement, shares in Peloton fell by 15 per cent (to US$97), before recovering to around US$107 at the close of markets.

Peloton was one of the big "winners" of the pandemic, as people flocked to connected and digital fitness products and services as health clubs and studios were forced to close their doors.

Sales of Peloton products surged during 2020 and into 2021, more than doubling to US$4bn in the year to 30 June 2021, however, it recalled its treadmills in the US, following the death of a child, resulting in a significant financial and reputational hit.

To read Peloton's letter to investors in full, click here.

Sign up here to get HCM's weekly ezine and every issue of HCM magazine free on digital.
Shares in Peloton have fallen after the company revealed fourth-quarter losses. It also said that tactical changes to the business will hit profits until 2023.
HAF,FIT,IND,PTS,SAM,TEC
2021/THUMB348361_615233_37770.jpg
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Fuel the debate about issues and opportunities across the industry. We’d love to hear from you – [email protected]
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Fuel the debate about issues and opportunities across the industry. We’d love to hear from you – [email protected]
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Catalogue Gallery
Click on a catalogue to view it online
Directory
trade associations
International SPA Association - iSPA: trade associations
Independent service & maintenance
Servicesport UK Limited: Independent service & maintenance
Architects/designers
Zynk Design Consultants: Architects/designers
Spa software
SpaBooker: Spa software
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Skincare
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Red Light Therapy
 Red Light Rising: Red Light Therapy
Management software
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Flooring
Total Vibration Solutions / TVS Sports Surfaces: Flooring
Property & Tenders
Welwyn Garden City
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Diary dates
01-03 Feb 2022
Coventry Building Society Arena, Coventry, United Kingdom
Diary dates
07-10 Apr 2022
Exhibition Centre , Cologne, Germany
Diary dates
15-16 Jun 2022
ExCeL London, London, United Kingdom
Diary dates
01-07 Dec 2022
tbc, Dunedin, New Zealand
Diary dates

News

Peloton hits its first big hurdle as the company grapples with growing pains

Shares in Peloton have fallen after the company revealed it was cutting the price of its original Bike to US$1,495
Results for Q4 saw a loss of US$313.2m against profits of US$89.1m last year
Peloton also predicts its expenses will increase during 2022, impacting margins
The company recalled its treadmill recently in the US, following the death of a child

Shares in Peloton have fallen after the company revealed fourth-quarter losses. It also said that tactical changes to the business will hit profits until 2023.

Fourth-quarter results saw the company reporting losses of US$313.2m against profits of US$89.1m a year ago in spite of revenues having increased 54 per cent to US$936.9m.

Peloton is lowering the price of its original Peloton Bike across all markets to US$1,495 (€1,495, £1,350 GBP) – it's also introducing a longer, 43-month, 0 per cent financing term option for Bike+ and Tread across all regions.

In its financial update to investors, Peloton said: "In the near term, our profitability will be impacted by the price decrease in our original Bike, significant increases in commodity costs and freight rate increases, a sales-mix shift to Tread, investments in marketing to broaden our appeal, accelerated investments in new products and features, investments to scale our member support and logistics operations, and significant investments in systems to support our growth.

"Looking ahead, we expect to return to Adjusted EBITDA profitability for full year 2023.

"Connected Fitness Margin in Q1 will also be significantly impacted by last-mile delivery costs, given the seasonality in our business.

"Peloton’s last-mile logistics is an important aspect of our member experience, but the fixed investments in warehouses, vehicles and people in our delivery network are carried throughout the year.

"Therefore, we will experience fixed-cost inefficiencies during our smaller volume first quarter, but expect significant leverage of these expenses in the remaining quarters of FY 2022."

Following the announcement, shares in Peloton fell by 15 per cent (to US$97), before recovering to around US$107 at the close of markets.

Peloton was one of the big "winners" of the pandemic, as people flocked to connected and digital fitness products and services as health clubs and studios were forced to close their doors.

Sales of Peloton products surged during 2020 and into 2021, more than doubling to US$4bn in the year to 30 June 2021, however, it recalled its treadmills in the US, following the death of a child, resulting in a significant financial and reputational hit.

To read Peloton's letter to investors in full, click here.

Sign up here to get HCM's weekly ezine and every issue of HCM magazine free on digital.
Shares in Peloton have fallen after the company revealed fourth-quarter losses. It also said that tactical changes to the business will hit profits until 2023.
HAF,FIT,IND,PTS,SAM,TEC
2021/THUMB348361_615233_37770.jpg

News

Boutique operator 1Rebel has launched its first 1Rebel Labs Studio at its club in Holborn.
The Local Government Association (LGA) has called on the UK government to invest £875m in
Anthony Hamilton, the father of F1 racing driver Lewis Hamilton, is launching a fitness equipment
The pandemic has had an "unprecedented" impact on physical activity levels in England, with 1
The first énergie Fitness club has opened in Spain as part of a push for
A global innovation competition has been launched to find ways to encourage and support more
Innovatise UK Ltd
Innovatise UK Ltd
Luxe Fitness, a Bristol-based gym offering premium service at a budget price has partnered with
Xponential Fitness has acquired Body Fit Training in a deal worth US$44m. The deal takes
Exercise has been highlighted as a crucial weapon in cancer patients’ battle against the disease.
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Nadine Dorries, the recently appointed secretary of state for digital, culture, media and sport at
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People who exercise 3-5 times per week show better mental health
HCM Magazine
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Focusing on dieting has failed to offset the rising tide of obesity, say researchers from the Universities of Arizona and Virginia. A focus on fitness gives better health outcomes
HCM Magazine
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Gyms have a role to play in collaborating with the social prescribing movement to improve the nation’s health, the CEO of the UK’s National Academy of Social Prescribing tells Kate Cracknell
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Screens display power generated from each piece of equipment, allowing people to compete against each other for kilowatt hours produced
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Letters
Fuel the debate about issues and opportunities across the industry. We’d love to hear from you – [email protected]
HCM Magazine
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Fuel the debate about issues and opportunities across the industry. We’d love to hear from you – [email protected]
HCM magazine
As the UK government’s social prescribing initiative gains momentum, Kenny Butler calls on the sector to step up and get involved
HCM magazine
This year’s edition of the IHRSA Global Report which addresses performance from 2020, is a valuable record of the tremendous impact of the COVID-19 pandemic on the sector, creating a benchmark from which to understand the recovery. Kristen Walsh reports for HCM
HCM magazine
In this issue, we’re focusing on sharing insights and thought leadership to highlight opportunities for the development of the sector in terms of both markets and offerings, says Liz Terry, HCM editor
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Research firm Qualtrics surveyed 12,157 consumers across 15 countries in seven languages to create the Les Mills 2021 Global Fitness Report, highlighting the ways consumers are choosing to work out as we emerge from the pandemic. Jak Phillips reports
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David Minton says the healthy movement industry is ten times bigger than the health club sector, and the care industry four times bigger and ask why we’re not rushing to collaborate?
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Our competition need to fasten their seatbelts
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Featured supplier news
Featured supplier news: Luxe Fitness partners with Fisikal to drive digital member journey
Luxe Fitness, a Bristol-based gym offering premium service at a budget price has partnered with Fisikal – an expert in digital business management solutions – to enhance its member experience and digital journey.
Featured supplier news
Featured supplier news: EMS personal training: shockingly simple
People's fitness goals are extremely diverse – ranging from an elite athlete focused on the next goal to someone who dislikes all activity due to chronic back pain.
Featured operator news
Featured operator news: Everyone Active bolsters Everyone on Demand and enters second year with five new partnerships
Everyone Active has signed a number of new deals which will see the operator strengthen its digital product offering, Everyone on Demand.
Featured operator news
Featured operator news: Sporting heroes to officially open £22 million redevelopment at Everyone Active centre
A £22 million redevelopment project will be unveiled at Grange Paddocks Leisure Centre, as part of the official launch of the state-of-the-art centre.
Company profiles
Company profile: énergie Fitness
Empowered Brands, owner of the énergie fitness business, has leveraged more than 18 years of ...
Company profiles
Company profile: Life Fitness
The Life Fitness family of brands offers an unrivalled product portfolio, providing customers with access ...
Catalogue Gallery
Click on a catalogue to view it online
Directory
trade associations
International SPA Association - iSPA: trade associations
Independent service & maintenance
Servicesport UK Limited: Independent service & maintenance
Architects/designers
Zynk Design Consultants: Architects/designers
Spa software
SpaBooker: Spa software
Whole body cryotherapy
Art of Cryo: Whole body cryotherapy
Skincare
Sothys: Skincare
Salt therapy products
Saltability: Salt therapy products
Red Light Therapy
 Red Light Rising: Red Light Therapy
Management software
Premier Software Solutions: Management software
Flooring
Total Vibration Solutions / TVS Sports Surfaces: Flooring
Property & Tenders
Welwyn Garden City
Welwyn Hatfield Borough Council
Property & Tenders
Newport, Shropshire
Lilleshall Sports Academy
Property & Tenders
Diary dates
01-03 Feb 2022
Coventry Building Society Arena, Coventry, United Kingdom
Diary dates
07-10 Apr 2022
Exhibition Centre , Cologne, Germany
Diary dates
15-16 Jun 2022
ExCeL London, London, United Kingdom
Diary dates
01-07 Dec 2022
tbc, Dunedin, New Zealand
Diary dates
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