Peloton CEO John Foley jumped back on the horse, or bike, during his company’s third-quarter earnings call and apologized for the Tread+ problems, but an upbeat earnings report restored optimism.
“As a company, we believe strongly in the future of at-home connected fitness and we know we have a responsibility to be an industry leader in product safety. We are a members first organization, and that means for all of us at Peloton, the safety of our member community comes first,” Foley told analysts.
“I want to be clear, though, Peloton made a mistake in our initial response to the Consumer Product Safety Commission’s request that we recall our Tread+ product. … stopping the sales of our product while we cooperated more closely with the CPSC is something we should have considered sooner. For that, I apologize.”
Foley had said Wednesday the recall of Tread+ and Tread treadmills after one child’s death and other reports of injuries was the “right thing to do.”
The recall news had dropped Peloton stock from almost $100 per share to close to $80, but the earnings call – and good news on revenue of $1.26 billion – helped.
Wall Street had been expecting revenue of $1.11 billion, and Friday afternoon, shares were back up near $85.
The report also listed a 144% increase in subscription revenue to $239.4 million, with connected-fitness subscribers up grew 135% year over year to 2.08 million.
The CPSC will go through a review process with the Tread+, and Foley said sales will cease for now.
“While this process typically takes six to eight weeks, it could take longer,” Foley added. “So we can’t offer an on sale or revise launch date at this time.”
Peloton will also be waiving monthly all-access subscriptions for its Tread and Tread+ members for three months.