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New York (AP) - The up-and-coming fitness equipment provider Peloton expects the widespread recall of its treadmills to have manageable financial consequences.
In the current quarter, sales will decrease by a total of 165 million dollars, said CFO Jill Woodworth.
It had the effect of a lifeblood on the share: Before this forecast, it was up to six percent in the red in after-hours trading, after which it turned into positive territory and gained more than five percent.
In the third fiscal quarter, which ended at the end of March, Peloton generated billions in sales for the second time in a row.
The proceeds reached 1.26 billion dollars (1.04 billion euros) - after around 525 million dollars in the same period last year.
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The bottom line is that Peloton ended the quarter with a loss of $ 8.6 million.
Among other things, the company had made $ 100 million to fix delivery delays with faster air and ship transport.
Peloton also bought a US manufacturer to increase production in the country.
Peloton, best known for networked training bikes, had grown rapidly since the beginning of the corona pandemic due to closed fitness studios.
The company's business model includes selling high-priced equipment as well as monthly subscriptions for training hours.
These subscription revenues increased 144 percent year over year to $ 239.4 million.
Peloton now has a good two million subscription customers.
Most recently, they trained on their devices an average of 26 times a month - after only 17.7 times a year ago.
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Peloton announced the recall of its two treadmill models on Wednesday.
The $ 4,000 Tread + treadmill has been classified as dangerous because it could pull children under the back roller of the treadmill.
With the somewhat cheaper Tread model, the screen could break off and injure users, warned Peloton and the consumer protection agency CPSC.
In Germany, Peloton does not sell the treadmills, but restricts itself to its training bikes.
Overall, the treadmills only had a manageable share in the peloton business.
By stopping their sales, sales will drop by $ 105 million, it said.
The company expects subscription revenues to decline by $ 10 million - and has $ 50 million ready for buybacks.
Peloton had initially only sold the cheaper Tread treadmill in Great Britain and Canada, the market launch in the USA was planned for May.
With this model, only other screws would have to be used for the display, said company boss John Foley.
With Tread +, however, changes in the production process are necessary.
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Peloton threatens a wave of lawsuits because of the treadmills.
A number of law firms are rounding up clients for mass proceedings, and the first class actions have already been filed in US courts.
In addition to affected customers, law firms are also calling on shareholders to participate in the proceedings in order to sue for compensation for price losses allegedly caused by the security deficiencies.
Prior to the recall, Peloton shares were priced at $ 98, then plummeted to $ 82.
With the recovery in after-hours trading after the quarterly figures were released, it moved back to more than $ 88.
© dpa-infocom, dpa: 210507-99-505137 / 2