Peloton CEO denies halting production, blames ‘leaker’ for rumors

(NEXSTAR) – Peloton isn’t halting manufacturing of its bikes and treadmills regardless of Thursday reviews that there can be a pause, the corporate’s CEO stated in a information launch.

Rumors surfaced earlier within the day that the health firm was placing a maintain on manufacturing amid waning shopper demand, sending shares tumbling. In a observe shared with the Peloton Crew, co-founder and CEO John Foley referred to as the rumors “false.”

“It has saddened me to know you learn these items with out the readability and context that you simply deserve. Earlier than I am going on, I need all of you to know that now we have recognized a leaker, and we’re transferring ahead with the suitable authorized motion,” he wrote.

Foley defined the corporate has confronted leaks of confidential info, described as “incomplete, out of context, and never reflective of Peloton’s technique,” this week.

Within the firm’s preliminary second-quarter fiscal outcomes, additionally launched Thursday, Foley stated Peloton is “taking vital corrective actions to enhance our profitability outlook and optimize our prices,” together with “figuring out reductions in our working bills.”

“Rumors that we’re halting all manufacturing of bikes and Treads are false,” Foley said in his company-wide observe. He went on to say that Peloton “[feels] good about right-sizing our manufacturing,” however didn’t present further particulars.

Whereas manufacturing isn’t pausing, layoffs could also be on the horizon. Foley famous in his letter to the corporate that though layoffs have beforehand been seen as “absolutely the final lever we might ever hope to tug,” Peloton “now [needs] to guage our group construction and measurement of our staff.”

Peloton noticed early success at the beginning of the COVID-19 pandemic when many had been pressured to stay residence. As COVID-19 vaccines started rolling out in 2021, gross sales of its bikes, treadmills, and subscriptions stalled.

In November, the corporate noticed its worst day as a publicly-traded firm after telling traders that it’ll doubtless lose more cash than it had anticipated in fiscal 2022. This got here simply months after Foley confirmed a baby had died in a “tragic accident” involving Peloton’s Tread+.

Following the kid’s loss of life, federal security regulators referred to as on People to cease utilizing the treadmill, which was then voluntarily recalled by Peloton.

Then in December, Peloton got here underneath fireplace following a plot twist within the new “Intercourse and the Metropolis” sequence. Within the first episode of the sequence revival, Carrie Bradshaw’s husband, Mr. Large (performed by Chris Noth), suffers a coronary heart assault and dies amid a strenuous train session on his Peloton bike. The loss of life not solely shocked viewers however apparently Peloton executives themselves, who later stated in a press release that they had been unaware of “the context surrounding the scene.”

Regardless of the string of unhealthy information for the corporate, Foley stated “linked health is right here to remain.”

“[It] supplies the comfort folks want to remain energetic and centered and can proceed to be a key a part of the way forward for health. In reality, only a few days in the past, we recorded our highest ever variety of day by day exercises — over 2.9M exercises.”