Back in the early days of the pandemic, the Peloton room was all the rage. People were stuck at home in lockdowns, and they needed a designated place at home to get in a workout — or blow off some steam.
But today, the world is less closed as vaccination rates increase and people become more accustomed to navigating life with COVID-19. As a result, Peloton sales are down, and there’s a possibility that the company’s at-home fitness reign will no longer go uncontested.
Peloton Interactive Inc. reported on Thursday its smallest quarterly gain in subscribers since it went public in 2019. The company also said that fewer people are joining its online workouts. At the beginning of October, The Wall Street Journal also released a report about once-Peloton die-hards feeling burnt out from the online workouts, and instead craving a change of pace and time outdoors.
John Foley | Credit: Peloton
The company announced it had reeled in previous forecasts for the fiscal year’s end on June 30, stating that annual revenue might fall 20 percent short of earlier predictions. Following the news, the company’s shares tanked 25 percent in trading after-hours.
“A softer than anticipated start to [the quarter] and challenged visibility into our near-term operating performance is leading us to recalibrate our fiscal year outlook,” John Foley, Peloton CEO, wrote in a shareholder letter.
There’s also evidence that gyms are starting to make a resurgence, potentially drawing some Pelotoners with the allure of working out with others in person. Planet Fitness reported on Thursday that it had rebounded to pre-pandemic sales growth levels, which spurred the company to up its forecasts for the year’s revenue and consider new store openings through the end of 2021.
Rebecca Blacker, a broker with Warburg Realty, told Inman in an email that the Peloton buzz she used to get from buyers at the pandemic’s height has died down significantly.
Rebecca Blacker | Credit: Warburg Realty
“A year ago, all I would hear is, ‘Where am I going to put my Peloton?'” Blacker said. “But I’m not hearing talk of the Peloton much anymore. Now that gyms are open and lifting their restrictions, buyers have less of a desire to have a Peloton in their home.”
For ultra-luxury buyers, the story may be slightly different, however. Luxury developer Tyler Jones of Blue Heron recently told Inman that buyers still want a lot of space and extra rooms in new homes they build, including a home gym. However, Jones and other luxury agents also told Inman that luxury buyers also want to be in locations with ample outdoor space and access to nature, which may mean that Peloton fitness class subscription is allowed to lapse more frequently without renewal, as homeowners take advantage of outdoor recreation opportunities.
Peloton’s reputation as a luxury item may also be hindering its growth in the long run, the company suggested on Thursday. Despite a small boost in sales and growth among younger, less affluent consumers after lowering the price of its original stationary bike by 20 percent over the summer, Foley suggested that move may not have done enough in terms of combating the overall waning consumer demand, and that the company would be adjusting its marketing strategy to address the perception gap.
“Among non-Members, there remains a lingering perception that Peloton is a luxury item,” Foley said in the shareholder letter.
Until the company can bring that perception back down to earth, everyday homeowners may revert to using their spare rooms for office space and storage, while everyday consumers may keep turning to other, traditional solutions to their exercise and social needs, outside of the home.
“We’ve been in our homes long enough in the last two years,” Blacker said. “People want to get out. Now you can go to the gym, socialize a bit — and [even] use the Peloton there.”
