This post was originally published on this site
Investing.com – Peloton stock (NASDAQ:PTON) fell 5.5% Tuesday on fears the company’s decision to charge for setup and delivery of its bicycles and treadmills will create dissonance amongst consumers at a time when it’s struggling to sell more of its fitness equipment.
Just five months back, the company lowered the price of its flagship exercise bike to grow its consumer base. That attempt fell flat owing to its image of being a maker of premium products.
Effective January 31, Peloton will charge $250 for setup and delivery of its bicycles and $350 for its treadmills. These services once came bundled with the price of the equipment. The price of the bike in the U.S. will now jump to $1,745 while Peloton Tread will cost $2,845.
Peloton also said it will hike the base price of both pieces of equipment for customers in the U.K., Germany and Australia, although delivery and setup will continue to come with no separate charge.
Last year’s reopening of the economy brought a rude surprise to Peloton, one of the biggest winners of the pandemic when stuck-at-home people used its machines to exercise at home. As the pandemic waned, the company struggled to retain its clients as people returned to their walks and runs and to gyms.
The company also struggled with the recall of its treadmill machine. The stock is now trading at less than $31, less than one-fifth of its high of $166.50.
Late last month, Raymond James analyst Aaron Kessler drew attention to another soft quarter for the company amid increasing costs and supply chain bottlenecks.
For the second quarter ended December, Peloton expects revenue to come in between $1.1 billion and $1.2 billion. For the full year, the company has guided for revenue of $4.4 billion to $4.8 billion.
