Peloton cuts 2022 sales forecast at its apparel unit by a quarter to $150 million, a report says

• Peloton cut 2022 sales goals for its apparel unit by a quarter, CNBC reported.
• It slashed its sales forecast from $200 million to $150 million, per an internal presentation seen by CNBC.
• Apparel accounts for small section of Peloton’s business, but sales had grown rapidly during pandemic.

Peloton has cut the 2022 sales forecast for its apparel unit by a quarter, CNBC reported, citing internal documents from the company.

The connected-fitness company originally forecast that its apparel unit would bring in more than the $200 million in revenue in the year to June 2022, CNBC reported, referring to an internal presentation. But the company has now brought the figure down to around $150 million, according to the presentation, which it attributed to multiple factors including the supply-chain crisis, per CNBC.

A Peloton spokesperson declined to comment to CNBC. The company didn’t immediately respond to Insider’s request for comment, made outside of normal working hours.

The firm has endured a difficult 12 months. Sales of its machines soared during the pandemic as gym-goers worked out from home, but reports emerged in January of pauses in production of its bikes and treadmils due to a slowdown in demand, triggering a sell-off in the firm’s stock. CEO John Foley denied the reports. 

The company has also previously been hit by customer complaints about long waits for delivery and poor customer service, a recall of its Tread+ after one child died and others were injured, and the portrayal of two TV characters suffering heart attacks while using its bike.

Though apparel accounts for a small chunk of Peloton’s overall business, sales from the unit, which is led by Jill Foley, wife of the CEO, had grown rapidly as the home fitness surge of the pandemic boosted demand for athleisure apparel.

The unit’s revenues more than doubled year-over-year to hit $107 million in the year to June 2021, selling almost 2 million items of apparel, CNBC reported, citing the presentation. Peloton said in the presentation that it didn’t have enough supply to keep up with demand, per the report.

Peloton brought in total revenues of just over $4 billion in the year to June 2021, meaning that apparel sales made up around 2.5% of total revenue, based on the figures included in the presentation viewed by CNBC.

CNBC reported that it was unclear whether the figures cited in the presentation were audited.

Peloton had stepped up efforts to develop its clothing business, launching its own apparel brand in September after previously selling clothing through partnerships with Adidas, Lululemon, and Nike.