Peloton, the fitness company known for its connected exercise bikes, has seen its shares fall after it posted a wider-than-expected loss and falling sales due to a bike recall and seasonality.
The company reported a net loss of $47.9 million for the quarter ended June 30, compared to a loss of $25.2 million in the same period a year ago. Revenue fell to $524.6 million from $758.9 million a year ago.
The company attributed the decline in revenue to a recall of its Tread+ treadmill, which was linked to the death of a child, as well as seasonality. The recall led to a $60 million charge in the quarter.
Peloton also said it was seeing a slowdown in demand for its connected fitness products, which include its exercise bikes and treadmills. The company said it was seeing a “modest” decline in demand for its connected fitness products in the U.S. and Europe.
The company said it was taking steps to address the slowdown, including expanding its product lineup and increasing its marketing efforts.
Despite the decline in revenue, Peloton said it was seeing strong demand for its digital subscription services, which include its app and streaming classes. The company said it had more than 1.1 million digital subscribers at the end of the quarter, up from 860,000 a year ago.
Peloton said it was also seeing strong demand for its apparel and accessories, which it said was helping to offset the decline in connected fitness product sales.
Overall, the company said it was “well-positioned” to capitalize on the long-term growth opportunities in the connected fitness market.
The company’s shares were down more than 10% in after-hours trading following the release of the earnings report.
Peloton’s results come as the company is facing increased competition from other connected fitness companies, such as Mirror and Echelon. The company is also facing increased scrutiny from regulators, who are looking into the safety of its products.
Despite the challenges, Peloton remains optimistic about its long-term prospects. The company said it was “confident” in its ability to continue to drive growth and innovation in the connected fitness market.
