Peloton reports 66% increase in sales as coronavirus keeps consumers working out at home
Pelotonreported a 66% increase in sales in the most recent quarter as consumers stuck in lockdown flocked to by its high tech at-home workout equipment.
- It ended the quarter with over 866,100 connected
fitnesssubscribers in total – those that have either purchased bike or the treadmill – a 94% increase from this time last year.
- Analysts say that even if gyms do reopen, the company is still well-positioned for the future as new social distancing norms may continue to keep consumers at home.
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While gyms and fitness centers around the world remain closed and some weigh up bankruptcy options, at-home high tech fitness pioneer Peloton is experiencing a boom.
On Wednesday, the company reported its third-quarter results, revealing that sales were up 66% during the quarter as more people invested in its high-tech
It ended the quarter with over 866,100 connected fitness subscribers in total – the customers that have bought either the bike or the treadmill – which marked a 94% increase from this time last year.
Subscribers of its app were also up 64% by the end of the quarter versus this time last year.
Moreover, its average net monthly net churn, a metric used to measure customer retention, hit its lowest rate in four years.
"Our global Connected Fitness Subscriber base saw significant growth in the third quarter. Our growth was aided by increased demand for our products driven by the extraordinary circumstances facing our global community with the
"Connected Fitness Product revenue exceeded our expectations across all geographies driven by strong demand for our Bike and performance of Tread,' it said.
The company has been struggling to keep up with the demand.
"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 said, adding that it is entering the fourth quarter with a backlog of bike deliveries.
In mid-March, it paused any advertising spend that it was able to as demand was so high. It is now mostly benefiting from customer referrals, it said.
Peloton's situation stands in stark contrast to the traditional players in the fitness industry that have been forced to shutter locations and see business dry up. Gold's Gym and 24 Hour Fitness are among those that are either considering bankruptcy options or have already taken the plunge.
And analysts say even if gyms do reopen, Peloton is still well-positioned for the future as new social distancing norms may continue to keep consumers at home.
"We continue to see a long runway for growth for Peloton," Bernstein analyst Jamie Merriman wrote in a note to clients on Thursday. "The new normal of social distancing is likely to increase the market opportunity as more consumers look for alternative ways to exercise and stay healthy."Read the original article on Business Insider
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