Home-exercise-equipment maker Peloton said on Thursday it was recalling more than 2 million exercise bikes, sending shares tumbling.
The company’s stock fell more than 8% in intraday trading and nearly 40% last month.
One source said the company had received 35 reports of original-model bike seatposts breaking or coming off during use. recall notice From the Consumer Product Safety Commission.
Peloton announced that it is voluntarily recalling Model PL-01 bikes sold in the United States from January 2018 through May 2023 to provide customers with home-installable bicycle seatpost replacements. statement Thursday morning on its website.
“It was important for Peloton to actively engage with the CPSC to address this issue,” the company said. I have written. “We worked with them to identify treatments that are approved today.”
The bike recall decision marks a turning point for Peloton, which has resisted equipment recalls. The company recalled the Tread+ and Tread treadmills in 2021 after initially resisting safety commission warnings that child deaths and dozens of injuries were linked to the equipment. Then-CEO John Foley said the company made a mistake by resisting calls to recall the treadmill.
In 2020, Peloton recalled nearly 27,000 bicycle pedals following reports of more than 100 broken pedals and 16 injuries.
Peloton has faced many other challenges in recent years. The company has dealt with volatile earnings, negative press on TV and cooling consumer demand after emerging as a pandemic winner in 2020 when people bought its home exercise equipment in bulk. .
Barry McCarthy, the current chief executive, has been trying to turn the company around since he took over last year, replacing the company’s founder, Mr. Foley. McCarthy cut staff, emphasized subscription strategy, started Equipment resale program.
In a recent letter to shareholders earlier this month, McCarthy said the company had submitted a settlement offer. International Trade Commission dispute It partnered with Dish Network for $75 million, and its subscriptions grew 5% in the most recent quarter.
In the letter, he expressed cautious optimism, saying the company had its best quarter since taking over as chief executive. “There will be challenges and opportunities ahead, but if we continue to perform in the next 12 months as we have in the last 12, we will have achieved something truly special,” he wrote. rice field.
