Peloton stock jumps by double digits: The connected fitness company’s focus on profitability is paying off, with Q1 FY25 revenues cleanly surpassing expectations.

Dayton says the new ads will try and convey that Peloton is a suite of services for a range of customers with varying fitness goals. We'll start with Suzy for this one. If you were CEO for a day of Peloton, what would you do as the pretend CEO to get Peloton back on track? Suzy Davidkhanian:.

As digital fitness goes mainstream, leading brands Nike, lululemon athletica, Peloton, and Apple are trailblazing a path for lifestyle brands toward a more profitable future.

For instance, the Official Peloton Mom Group on Facebook is a private community of more than 100,000 members. It’s run by the brand, but conversations among members often have nothing to do with Peloton.

Better-than-expected earnings for Etsy and eBay give retailers a glimmer of hope: But continued losses for Wayfair and Peloton show some categories have a longer, difficult road to recovery.

Take Peloton, for example. “[Peloton] focused too much on the pandemic climate, when people were exercising at home,” Droesch said, and did not anticipate demand once they sold the bike and a subscription. This year, Peloton’s D2C ecommerce sales will decline 9.5% to reach $0.56 billion—less than a third of what the company saw in 2021 ($1.73 billion)—per our May 2024 forecast.

Recurring revenue is the key to long-term success for connected fitness: Peloton and Mirror take steps to get people to buy their gear—the first step toward getting them to subscribe.

On today's podcast episode, we discuss the Federal Trade Commission's (FTC) case against Amazon, the tech giants' defense, and what is most likely to come of this. "In Other News," we talk about what to make of Peloton and Lululemon striking a deal and why social media burnout is back on the radar. Tune in to the discussion with our analysts Jacob Bourne and Zak Stambor.

On today's episode, we discuss Peloton's strategy to sell through Amazon, how much people really trust influencers, what to make of The Walt Disney Co.'s new membership program, what to do about a tidal wave of returns, which brand has the least intrusive ads, an explanation of what makes retail apps sticky, how much different countries spend on their militaries, and more. Tune in to the discussion with our vice president of Briefings Stephanie Taglianetti and analysts Dave Frankland and Suzy Davidkhanian.

This year, 42.6 million US adults will use a connected fitness platform such as Peloton at least once a month. This figure ballooned from 24.0 million in 2019.

Connected fitness users are pulling the plug: Our updated forecast shows US adults are heading back to the gym or outdoor fitness routines, leaving Peloton, Mirror, and others behind.

Digital D2C disruptors, like Peloton and Casper, will bring in about $100 billion less in US ecommerce sales than the $134.55 billion of their established counterparts this year, according to our forecast.

Direct-to-consumer (D2C) ecommerce growth has slowed since 2020, but the leading digitally native brands remain popular. In December 2021, the Peloton website raked in 6.7 million visits worldwide, far more than the sites of Warby Parker, Casper, and other top digital natives in the D2C space.

“Peloton never really looked past what their business would look like after selling these super expensive bikes,” Droesch cited as an example. Its outlook only became worse after the pandemic. Its share price opened at $3.41 on May 23—down significantly from its peak of $167.42 on January 13, 2021—yet several private equity firms still recognize its value and are considering a buyout, per CNBC.

Established brands pivot to reembrace wholesale, while digital natives—facing rising ad costs—struggle to find their second act.

So if you think about a company like Peloton never really looked past what their business was going to look like after they sold everyone these super expensive bikes, and then the pandemic ended.

More likely it will be a chance for major brands that sell through Amazon—like Gap, Peloton, and Levi’s—to advertise in the hopes of converting buyers on Amazon or in brick-and-mortar stores. Amazon’s attempt to influence Nielsen TV ratings by publicizing higher internal audience numbers for its football broadcasts illustrates how much the ecommerce giant has riding on this effort.

We project Warby Parker, Blue Apron, Stitch Fix, SmileDirectClub, and Peloton will see declines in D2C ecommerce growth this year; all are now pursuing alternate channels for growth. Underperformers Peloton and Gap are looking for an Amazon lifeline. Despite many D2C brands’ vow to never sell on Amazon, that’s exactly what several are doing to recharge growth.

That’s a lesson that both Peloton and lululemon know well. Peloton sought to develop an apparel line to compete with companies like Nike and lululemon, and lululemon pushed into connected fitness with its $500 million acquisition of Mirror.

Peloton took the plunge in 2022 and began selling its equipment on Amazon, but this year, we predict it will partner with a brick-and-mortar retailer like Target. Peloton can use in-store sales to offset its declining ecommerce sales, which we predict will drop 18.0% this year, per our March 2023 forecast.