Peloton faces continued shipping delays for its products causing long wait times and poor customer service, despite strong growth in the first quarter of this year.

The at-home connected fitness company said delays for its products will extend into the foreseeable future during an earnings call Thursday, sending its stock price down 0.9% at close on Friday.

Demand for Peloton’s products has surged during the pandemic as consumers turn to home workouts while gyms and fitness studios are closed or operating at limited capacity. But the company has struggled to keep up and will now take costly measures to improve customer service before a critical holiday shopping period.

“It pains us that we’ve been underperforming recently versus the high standard we strive for,” said John Foley, CEO, on a conference call. “Wait times for our products have been unacceptably long.”


Company sales jumped 242% in the first quarter to $757.9 million, beating analyst estimates of $734.5 million. Net earnings were $69.3 million, or $0.20 per share, beating estimates of $0.13 per share. 

Foley attributed the increase in demand to steady sales driven by the pandemic, lowered pricing on its original fitness bike and launch of a new higher-end model, Bike+. Foley said that the demand for Bike+ in particular quickly exceeded company estimates causing wait “to balloon.”

He also said that external factors such as port congestion, warehouse closures and natural disasters have impacted scheduled deliveries.

In response, the company is continuing to add manufacturing capacity, investing in air shipments and using expedited logistics to improve delivery times. It will also grow its member support team to manage high call volume and limit customer service wait times.

“I would put all these issues in the bucket of good problems to have for a company growing as quickly as they are,” said Rohit Kulkarni, senior analyst at MKM Partners. “They’re clearly supply-constrained, not demand-constrained.”

But investors are reacting to the number of alternatives in the growing home fitness space that may affect Peloton’s incremental customer growth right before a critical holiday shopping period, said Kulkarni. 

Mirror, Tonal, Tempo and SoulCycle’s at-home exercise bike are just a few of its competitors in the increasingly crowded connected-fitness industry.

Peloton’s increased investments in logistics will have an effect on its bottom line in the coming quarters. Foley said on the call that the company feels these expenses are the right trade-off in the short term.

Peloton’s customer growth for its connected fitness products has increased dramatically over the last year as consumers seek alternatives to gyms and fitness studios shuttered by the pandemic. The company posted 243,000 new connected fitness subscriptions in the first quarter, bringing the total to over 1.33 million, up 137% from last year.  

Its $12.99 paid digital subscriptions grew 382% to over 510,000. The Digital membership grants access to the full library of Peloton live and on-demand classes, serving as a funnel for customers toward its pricier connected fitness subscriptions that require Peloton products.

“They get exposed to the content, the quality, the breadth, the variety,” said Paul Golding, consumer lifestyle analyst at Macquarie Capital. “They see some of the offerings that they’re missing out on without a connected hardware component.”

For the upcoming fiscal quarter, Peloton forecasted adding another 300,000 connected fitness subscriptions for a total of 1.63 million and reaching $1 billion in total revenue. 

It raised its estimate of full year total connected fitness subscriptions to 2.17 million and total revenue to $3.9 billion or more, representing 114% year-over-year growth.