For years—despite pandemic highs and post-quarantine malaise—Peloton has reported earnings at a bright and clear 8:30 a.m. ET. Not yesterday. Instead, in the morning the company reported different news: it released another recall of 833,000 original Bike Plus unitsbefore releasing first-quarter 2026 results after markets close at 4 p.m.
Peloton CEO Peter Stern immediately addressed the recall during the company's earnings conference call, laying out the facts: There were just three reports of breakdowns and two injuries, plus the company was offering free seat replacements. Later, in response to analyst questions, Stern said the impact of the recall “will be immaterial and is reflected in our full-year guidance.”
To be fair, the scale of this is less than the company's first recall in 2023, which impacted over 2 million original Peloton bikes with 35 reported breakdowns and 13 injuries. But it still casts a shadow over what would otherwise be a positive earnings outlook for the company. Peloton surprised investors by beating expectations with a second straight profitable quarter and an upbeat outlook for the holiday season. Stock closed down 14 percent today.
But that's the Peloton thing. He's doing something promising – even good. And then Mr Big is dying. Maybe he'll run an insensitive holiday ad. Prices go up and his die-hard fans feel worthless and devalued. He announces another recall. Or another round of layoffs after layoffs were announced.. Either way, Peloton's story has been a constant clash between progress and a company shooting itself in the foot.
All of this makes it difficult to say what Peloton's future looks like. On the one hand, managers seem to be confident that recent ambitious hardware upgrade and introduction of AI-powered fitness features is going to help the company return to its glory days. (If that weren't the case, it would be even bolder to price the Tread Plus at around $7,000.) On the other hand, Peloton fans seem divided.
New products announced on October 1 caused strong emotions among subreddits And Official Peloton Facebook Group. Many long-time users are annoyed by the lack of trade-in programs or upgrade kits for the new motorcycle display. This seems doubly egregious when the new hardware is essentially the same machine with a new tablet attached to it. You don't have to dig too deep to find Peloton advocates, but it's hard to classify this announcement as a “solid win” within the community. And if longtime stalwarts believe so, then where exactly does Peloton get its confidence?
The longer trend has been a slow and gradual path to recovery. Since former CEO John Foley stepped down, missteps have increased exponentially. fierce patent fightsand drama in general. It could be argued that this took approximately two years under subsequent CEO Barry McCarthy (and the mysterious ship metaphor) to stop bleeding. Stern, the current CEO, has made it clear that his strategy is to focus on restoring profitability, improving cash flow and improving efficiency so the struggling company can think about growth again.
It's frank boring. While McCarthy, like his predecessor Foley, might be expected to say something out of pocket every now and then, Stern was as enthusiastically gentle as a CEO can be. (He ended yesterday's conversation with a banal joke about “a veritable smorgasbord of new content for Thanksgiving.) Perhaps this is what Peloton needed from the very beginning: to have adults at the helm so that the company could get boring for once.
Because this has always been the most mysterious part of the Peloton story. The company has always had a winning formula for a good product. And loyal subscriber base. Despite the end of pandemic restrictions, it fell so fast and hard because Peloton couldn't get out of its own way. Given the timing of yesterday's recall and earnings report, I don't think Peloton is quite ready to completely abandon its dramatic success just yet. But for fans and investors alike, the day Peloton headlines Not automatically causing anxiety would be a real relief.
