Peloton recall to cost company $165 million in lost sales
May 6, 2021. Summarized by summa-bot.
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A Peloton Interactive Inc. Tread exercise machine for sale at the company's showroom in Dedham, Massachusetts, U.S., on Wednesday, Feb. 3, 2021. Peloton Interactive Inc. is scheduled to release earnings figures on February 4. Photographer: Adam Glanzman/Bloomberg via Getty Images
Peloton is estimating its treadmill recall will cost the company about $165 million in lost revenue during the the current quarter, and result in a $16 million hit to its profits.
New York (CNN Business)Peloton is estimating its treadmill recall will cost the company about $165 million in lost revenue during the the current quarter, and result in a $16 million hit to its profits.
The company said $50 million in lost revenue would come from refunds to owners of the treadmill who want to return them, roughly 10% of the units that are already in the hands of customers.
Beyond the lost revenue, the company said its costs will increase from paying to ship the returns.
"However, our unit sales remain significantly higher than pre-covid levels. " She said the company expects the number of exercise bikes it sells from April through June this year to be three times higher than there were in the same months of 2019 — a year before the pandemic.