12:43 p.m. EST. updated on
Peloton Interactive (PTONShares rose on Friday after the connected fitness equipment maker ushered in a series of price hikes for its signature bikes and treadmills.
Bloomberg News also reported that the company plans to cut about 800 jobs while simultaneously closing several stores as part of a “significant and aggressive reduction” of its retail footprint as part of CEO Barry McCarthy’s turnaround strategy.
Pelton said the price of its Bike+ for US customers will increase 25% to $2,495, while the price of its treadmills will increase about 30% to $3,495. Price increases for its fitness equipment were also announced in Canada, the United Kingdom and Germany on Friday, with the price of its original Peloton bike remaining unchanged in all of its markets.
The price increase comes amid the sharpest rise in consumer prices in more than four decades, as well as a series of supply chain changes that have complicated the group’s own production.
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“In April 2022, we reduced the prices of our devices to make the entry point more accessible for new members,” the company said in a statement posted on its website. “Today we are updating the prices of our award-winning premium hardware. Driven by the progress we have made on our transformational journey, we are pursuing a more strategic pricing strategy for our premium products.”
Shares of Peloton rose 6.1% in Friday afternoon trade after announcing a price hike that changed hands at $12.64 each.
Last month, Peloton said it would end production of its flagship exercise bike in-house, instead expanding a manufacturing deal with a group in Taiwan.
Rexon Industrial Corp. will be Pelton’s primary manufacturer of fitness equipment, including its iconic stationary bike and popular treadmill.
Peloton said the change is part of its strategy to simplify its supply chain and focus on technology and materials as part of new CEO McCarthy’s turnaround plans.
Peloton posted a bigger-than-expected third-quarter loss of $2.27 per share in late May, with McCarthy warning that the overall business was “thinly capitalized” with just $879 million in unrestricted cash at the end of the quarter, revealing Details A $750 million loan agreement with Goldman Sachs and JP Morgan.
Looking ahead to the current quarter, Peloton said it sees revenue in the region of $675 million to $700 million and plans to end the period with nearly 3 million subscribers to its affiliate fitness program. .