Internal Docs Report: Peloton Slashed Sales Goals
CNBC obtained internal documents that reveal Peloton has faced supply chain challenges in its athleisure journey
Another day, another leak. CNBC has obtained internal documents revealing that Peloton has reduced its 2022 sales targets for its apparel division. The new insider reports come just over a week after Peloton CEO John Foley addressed his team and revealed that a leaker had been identified.
According to internal documents, “momentum” for the apparel line, which is overseen by Peloton VP of Apparel Jill Foley, the wife of CEO John Foley, is fading.
CNBC reports that in the fiscal year that ended in June 2020, Peloton’s apparel division sold 800,000 units, bringing in around $41 million. The total revenue for the year was $1.8 billion. In 2021, with athleisure still remaining popular, Peloton ran into supply issues and couldn’t keep up with demand. Peloton sold under 2 million units, bringing in $107 million. The report indicates that Peloton’s total revenue was $4 billion in the fiscal year ended June 30, 2021.
Peloton’s forecast may have been more optimistic than realistic, as has happened in the past. The fitness company had hoped for more than $200 million in annual revenue, but now expects $150 million. Peloton cites supply chain issues and other “macro factors.”
The fitness company is celebrating Black History Month with apparel designed by artist Erwin Hines.
Peloton, which previously collaborated with Lululemon, Nike, and Adidas, decided to forge its own path, employing its own private label. The interactive fitness company had hoped that its move to fitness apparel and athleisure would continue to drive Peloton’s brand forward. Jill Foley, Peloton’s Vice President of Apparel, had indicated that the company’s vision was to “enhance members’ lifestyles, not just one part of their day.”
Some speculate that Peloton expanded into apparel to send a message to Lululemon, which launched Mirror. Regardless of Peloton’s reasons, management for the fitness company indicated at an investor conference last fall that apparel meant playing the long game, implying that it could be a “winner take all” scenario.
The fitness company closed out 2021 with engaging Lululemon in a legal battle. Lululemon had threatened to sue Peloton over it’s new private-label line that launched in the fall. The athleisure company claims that Peloton’s designs infringe on its patents, an accusation that Peloton says lacks merit. Peloton filed a lawsuit in Manhattan federal court, requesting that the court declare Lululemon’s allegations are invalid.
More recently, Peloton recently hired McKinsey & Co., a management consulting group, as it reviews its cost-structure and contemplates job cuts.
