Peloton Interactive Inc.'s highly anticipated artificial intelligence-powered exercise equipment is experiencing a disappointing market debut, with sluggish sales threatening the company's promised turnaround strategy.
Retail Reality Check
According to managers at dozens of Dick's Sporting Goods and Johnson Fitness & Wellness locations across the United States, the new Cross Training Series has gained only modest traction eight weeks after its launch. While the AI-enhanced treadmill and bike have generated increased foot traffic from curious customers, this interest has failed to translate into significant sales.
The company's shares briefly fell 2.3% to a session low on Tuesday before recovering to trade 1.3% higher. The stock has declined approximately 23% year-to-date, reflecting ongoing investor concerns about Peloton's recovery prospects.
Pricing Problems Persist
Peloton's fundamental challenge remains unchanged: premium pricing that discourages cost-conscious consumers from choosing their products over more affordable competitors. The company implemented substantial price increases across its portfolio, raising equipment costs by an average of 11% and subscription fees by about 19%.
Analysts had previously expressed concerns that these price hikes would undermine Peloton's ability to attract new members, particularly in the current economic climate where consumers are increasingly budget-conscious.
The sales data appears to validate these concerns. As of the second week of November, Amazon's product page for the Bike+ Cross Training Series showed only around 50 purchases over the preceding month. Warehouse movement also remained slow during the same period.
Holiday Season Hopes
Despite the slow start, Peloton maintains optimism about the holiday shopping season. The company has launched aggressive Black Friday promotions, including discounts of up to US$1,500 for treadmill-and-accessory bundles.
These promotions have already shown some positive impact. Since the Black Friday campaign began, the rough number of Amazon sales for the Bike+ has grown to more than 100 units.
Peloton has taken practical steps to prepare for anticipated demand, increasing maritime import volumes compared to previous years according to trade database ImportGenius. The company projects holiday quarter revenue between US$665 million and US$685 million, which would represent essentially flat growth compared to the same period last year.
There are additional encouraging signals beyond the holiday promotions. Visits to Peloton's website were essentially flat year-over-year in October, marking an improvement from the 18% decline recorded in September.
The fitness equipment market typically experiences seasonal patterns that could benefit Peloton. The October launch coincided with a traditionally slower period, with demand usually picking up in early to mid-December and remaining strong through mid-February as consumers act on New Year's fitness resolutions.
The new equipment lineup represents Peloton's first major product refresh under new management. The upgraded portfolio includes redesigned versions of the Bike, Bike+, Tread, and Tread+, along with a Row+ that replaces the previous rowing machine. All feature Peloton IQ, an AI platform offering personalized guidance, insights, and coaching plans.
Peloton has struggled with a multi-year sales slump since pandemic lockdowns ended, as consumers returned to outdoor exercise and traditional gyms. The AI-powered Cross Training Series was intended to reignite growth through technological innovation, but the initial market response suggests the company's pricing strategy may require adjustment to achieve its turnaround objectives.
