Peloton CEO sounds the alarm on growing problems

Most people would agree that the Covid pandemic era was one of the worst times in modern history. 

Billions of people worldwide were forced to stay home, temporarily halting their lives and completely restructuring their daily routines. This deprived them of quality time with loved ones and prevented them from creating lifelong memories.

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However, for others, the pandemic helped them get in the best shape of their lives. With so much time on their hands, many people began focusing on their health, using fitness to escape reality for a few hours rather than lounging around and watching television for the rest of the day. 

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When gyms were forced to close because of the pandemic, fitness equipment and media company Peloton became fitness enthusiasts’ saving grace and helped others begin their wellness journeys. 

Peloton provides live and on-demand workout classes for any fitness level and workout style. These workouts can be done using body weight or workout equipment, including spin bikes, treadmills, and rowers. 

Peloton publishes its Q3 earnings report for fiscal 2025.

Image source: Peloton Interactive, Inc.

Peloton marks its third consecutive year of sales declines

Peloton’s  (PTON)  business model boomed during lockdowns, reaching its highest sales, subscriptions, and shares peak ever. 

However, once the confinement period ended and gyms began to reopen, the need and demand for at-home workout equipment declined. This has caused Peloton’s business to struggle since 2021.

Not only did consumers no longer depend on their equipment or fitness videos to get a good workout, but the pandemic’s repercussions also led to economic uncertainty and a slowdown in consumer spending that continues to have a global impact.

Consumers have become more cautious about their financial habits, which Peloton claims has caused a decline in subscriptions and equipment sales. 

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Peloton’s overall membership declined 8% year over year during its third quarter of fiscal 2025.

Paid Connect Fitness subscriptions required for Peloton equipment were down 6%, and paid app subscriptions that grant access to workout videos decreased 15%.

Equipment sales declined 27% yearly, with subscription revenue down 4%, marking the third consecutive year of year-over-year sales declines. 

The results caused its shares to drop by over 14% during morning trading on May 8.

Peloton CEO reveals a new growth strategy

Since becoming Peloton’s CEO in January 2025, Peter Stern revealed he has been developing new strategies to get the business back on track and is very optimistic about the company’s future.

Stern unveiled four key objectives in a shareholders’ letter that the company will focus on to boost growth in fiscal 2026. 

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The first objective aims to improve member outcomes by delivering better equipment, software, and coaching. 

Its second target is to promote brand awareness by expanding its commercial and retail presence and making further marketing investments to create culturally relevant brand marketing.

For its third objective, the company wants to foster loyalty by establishing stronger bonds with members through launching new features that allow members more ways to interact with each other and delivering a better customer experience. 

Its final target is to optimize pricing and reduce costs, achieving $200 million of run-rate cost savings by the end of this fiscal year to increase profitability.

“During this period of economic uncertainty, we believe Peloton is well-positioned to maintain its leadership within the global fitness and wellness industry,” said Stern.

Peloton is so confident about the success of this new strategy that it raised its outlook for the full year of fiscal 2025 across various metrics, including total revenues from $2.45 billion to $2.47 billion and paid Connected Fitness subscriptions from $2.77 million to $2.79 million.

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