Peloton reports drop in stationary bike and treadmill sales 1:03
New York (CNN Business) --
New York (CNN Business) --
Peloton CEO John Foley acknowledged Thursday that the company is "considering all options," including layoffs and production restrictions, after a report that the company's fitness stopped manufacturing its bikes and treadmills caused the stock to plunge.
His statement did not reference any specific reports, but said "rumors that we are stopping all production of bikes and Treads" were "false."
Foley's statement came hours after CNBC reported that starting in February, Peloton plans to pause production of its $1,495 low-end bike for two months and stop making tread machines for six weeks, citing internal documents. .
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The report also said that production of Peloton's Bike+, a high-end bike that costs $2,495, was halted in December and won't resume until June.
Foley said in his statement that the company is "sizing production" in response to "seasonal demand curves."
"We are readjusting our production levels for sustainable growth," he added.
According to internal documents that CNBC says it has seen, company executives are facing a "significant reduction" in demand for Peloton products due to their high prices and increased competition.
CNN Business has not seen the documents.
Foley's statement also alluded to possible job cuts.
The removal of treadmills impacts Peloton actions 1:38
"In the past, we've said layoffs would be absolutely the last lever we'd expect to use," he said.
"However, we now need to assess our organization structure and the size of our team, with the utmost care and compassion. And we are still in the process of considering all options as part of our efforts to make our business more flexible." ".
Peloton (PTON) shares sank almost 24% on Thursday according to the CNBC report, their worst day in more than two months.
In his statement, Foley said the "leaks" of "sensitive information" have "led to a flurry of speculative reporting in the press." He said the information obtained by the media was "incomplete, out of context and does not reflect Peloton's strategy," adding that the company has identified a leaker and is "moving forward with appropriate legal action."
Peloton has attributed some of its problems to inflation and supply chain challenges.
Beginning January 31, customers will be required to pay $250 for delivery and setup of Peloton's $1,495 bike, a service the company previously included in the price.
Customers who purchase Peloton's Tread treadmills will be charged a $350 delivery and installation fee beginning later this month.
"Continued restrictions are driving up costs," the company said.
That announcement came just a few months after Peloton slashed the price of its original home exercise bike to boost sales.
Peloton shares took a hit in 2021, losing 76% of their value, after soaring in 2020. The company revealed in its most recent earnings report that sales of its exercise bikes and treadmills fell 17%.
Those two machines are the company's daily bread and represent 60% of its business.
The shares are down 32% for the year.
Peloton (PTON) reports earnings on February 8.