CNBC is reporting that Peloton has decided to halt production of the Bike, Bike+, and Tread as part of their ongoing effort to get their costs under control. To be clear, this does not mean that these devices will be unavailable for purchase; it simply means that Peloton has too many machines currently in inventory and will not produce more for the time being.
CNBC obtained internal documents from a January 10 presentation that described slowing demand due to consumer price hesitancy and increased competition from other companies.
The production halt durations vary by product. The documents reveal that Peloton paused production of the Bike+ back in December and this will remain in effect until June. The original Bike production will be paused from February to March, and production of the Tread will be paused for six weeks beginning in February.
The documents also reveal that Peloton does not plan to produce any Tread+ machines in the 2022 fiscal year. The Tread+ has not been in production or available for sale since last year’s safety recall.
The documents also contain information about the launch of the Peloton Guide, Peloton’s newest and first device and first connected strength product. According to CNBC, the official launch of the Peloton Guide was originally scheduled for February 2022, but this could be pushed back to April 2022. They’ve also already dropped the price by $100 even though the product has not yet officially launched.
Peloton’s stock price has already fallen more than 20% since CNBC broke the news earlier today.
Earlier this week we reported that Peloton hired the consulting firm McKinsey to look at ways to cut costs, and is considering cutting jobs and closing showrooms. These developments follow the news that Peloton is effectively increasing the price of Bike and Tread devices by eliminating free delivery and set-up.
Peloton’s Q2 2022 Earnings Call is scheduled for February 8.
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