Cari Gundee rides her peloton exercise bike at her home in San Anselmo, California on April 6, 2020.
Ezra Shaw | Getty Images
Peloton’s CEO promises to concerned customers who are still waiting for their bikes and treadmills that the company will work quickly to provide clearer answers as to when they might be arriving.
“We are determined to do everything possible to shorten our delivery times and give customers security for the delivery dates we offer,” said Chief Executive John Foley during a call for earnings on Thursday. “We will continue to make significant investments to get our products to the US safer and faster.”
The demand for Pelotons home fitness equipment has increased during the Covid pandemic. So much so that Peloton couldn’t keep up. It has also suffered as unloading times at West Coast ports are four times longer than a year ago – a backlog that has hit a number of companies, including other home fitness manufacturers.
The Peloton website currently states that some items can take anywhere from eight to ten weeks to ship. Previously, the time window for ordering to delivery was closer to four to six weeks. Some customers have reported having their deliveries delayed multiple times without showing a clear, updated home delivery window.
Foley stated Thursday that the company more than doubled its customer support team over the past year to keep up with AC requests.
“We will continue to invest in systems, teams and manufacturing capabilities to ensure we don’t disappoint our customers in the future,” he said. “We plan to return to normal ordering by delivery [windows] well before the end of this calendar year. I would say mid to late spring … we’ll be in good shape again before you know. ”
Peloton posted second-quarter revenue growth of 128% Thursday, marking its first billion dollar quarter. As a result of the higher sales, Peloton now expects total annual sales of over $ 4 billion, compared to previous forecasts of more than $ 3.9 billion. Analysts had asked for $ 3.95 billion.
However, the earnings outlook for fiscal year 2021 remained unchanged. Additional investment in the supply chain to remove bottlenecks should weigh on profits in the short term. Peloton announced Thursday that it will invest more than $ 100 million in air freight and expedited ocean freight over the next six months to help expedite deliveries.
The long-term goal is to build up a larger inventory in the USA. Exercise equipment maker Precor, valued at $ 420 million, is currently being acquired to add more manufacturing capacity to its home turf.
Peloton stock fell more than 8% in expanded trading Thursday, after rising more than 365% in the past 12 months.