Interactive fitness company Peloton Interactive PTON has been undergoing a transformation in 2022 that includes a new CEO, cost cuts and employee layoffs. A new plan might include seeing customers assemble products themselves.
What Happened: Peloton CEO Barry McCarthy is leading a turnaround for Peloton after taking the leadership helm in February 2022.
Among the changes that could come are app subscribers viewing workouts on third-party workout machines, a bike redesign and a rower debuting in time for the holiday season.
One potential change also includes making the Peloton Bike redesigned so that customers would assemble it themselves, according to Bloomberg.
McCarthy suggested during the company’s third quarter earnings call that hardware designs could be changed. Peloton currently has crews that build treadmills and bikes at a customer’s home. This service was previously free before being changed to an additional fee of $250 to $350.
The change would see customers assemble the products themselves.
Related Link: Peloton Interactive Exits In House Bike Production As Part Of Turnaround
Why It’s Important: The move to shift assembly to customers could continue Peloton’s restructuring plan to reduce costs.
Instead of using its own shipping and delivery services, going to do-it-yourself assembly could allow Peloton to ship the products via a third-party company like FedEx Inc FDX, the report said.
The company recently announced another round of job cuts.
Peloton also announced that it will be raising costs for the Bike Plus and Tread and closing retail locations next year.
McCarthy, who formerly held senior leadership positions at Netflix Inc NFLX and Spotify Technology SPOT, also envisions marketing the Peloton app to all people in the future, a move similar to Apple Inc AAPL with its Fitness Plus service, compatible with non-Apple-branded products.
The changes being instituted by McCarthy could put more of an emphasis on services and subscription based revenue instead of hardware sales.
Since taking over, McCarthy has been aggressive in cost-cutting measures and making changes within the company, which has seen shares fall significantly over the last year. Investors may want to pay attention to what McCarthy has in store for the fitness brand.
Peloton will issue fourth quarter earnings on Aug. 25, which could provide an updated look at the company's new plans.
PTON Price Action: Peloton shares were down 3.40% at $13.22 on Wednesday, versus a 52-week range of $8.22 to $40.35.
Photo: Courtesy of press.onepeloton.com
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