Peloton’s shares were up over 13% in mid-morning trading as a number of private equity firms consider a potential buyout of the at-home fitness company, as per a CNBC report.
Last week, the company reported lower revenue and losses, resulting in the CEO’s departure. The company has seen back-to-back 13 straight quarters of losses — and a takeover could help refinance its debt.
In its quarterly earnings report released last Thursday, the company’s fiscal third-quarter revenue was $717.7 million, down from $748.9 million a year ago. Its net loss narrowed to $167.3 million, or 45 cents per share, from $275.9 million, or 79 cents a share, a year earlier.
The company announced 400 job cuts and the departure of CEO Barry McCarthy, who took the position in 2022. Karen Boone and Chris Bruzzo were reported to serve as interim co-CEOs until the company completes its search for McCarthy’s replacement.
When gyms and fitness centers were closed during the pandemic, Peloton bikes were popular as a means of exercising at home. But the company has struggled to sell its products in the post-pandemic era. Peloton’s strategy of offering a free subscription to attract new users failed to convert them into paid subscribers, and it had to drop the program.
Last year, the company partnered with fitness apparel brand Lululemon to integrate Peloton’s content into Lululemon’s exercise app. As part of the collaboration, Lululemon became Peloton’s primary athletic apparel partner. The strategy failed to save Peloton from losses, and currently, Lululemon itself is suffering from a decline in sales.