Peloton Says Tread Recall Will Reduce Quarterly Sales By $212 Million
After the Peloton Tread+ was linked to the death of a child, as well as over 80 separate injuries, Peloton have reduced its projected quarterly revenue for April-June to AU$1.176 million, explaining that recalls and delayed product releases would reduce their sales during the current quarter by AU$212 million.
Surprisingly, shares gained 5 per cent after the announcement, as shareholders were expecting a far worse result.
Chief Executive Officer John Foley said the financial impact would be “short term” and that the company is working on a software update that requires a passcode to use the Tread+. He also said that Peloton expect roughly 10 per cent of Tread+ users to seek a refund, and that shipping times are back to pre-pandemic levels.
“While progress has been made, additional work remains to reduce delivery times across the remainder of our product portfolio and regions,” Foley said..