Peloton Sales Figures Leap

Peloton (NASDAQ:PTON) said Thursday its fiscal third-quarter sales grew 141%, as recent investments in its supply chain allowed it to improve the pace of deliveries.

However, even as the company made progress in easing delivery bottlenecks — brought on by its popularity as a way to exercise at home during the coronavirus pandemic — it faced another challenge: the need to recall all of its treadmills after one child died and dozens were injured in accidents involving the Tread+ machine.

Peloton shares initially fell after its financial results were released. The report didn’t disclose any details about the impact of the recall, or its outlook.

But the stock swiftly recouped losses after the company provided more details on its earnings call. Peloton shares were recently up more than 4% in extended trading.

The company expects the treadmill recall — which has halted sales of its two models and delayed the planned launch of a less-expensive version in the U.S. — to reduce fourth-quarter sales by $165 million.

It now expects fourth-quarter sales of $915 million, which is lower than the $1.12 billion analysts were expecting.

Peloton also expects to incur added costs because it’s offering customers full refunds and will waive all treadmill customers’ membership fees for three months. This should reduce its fourth-quarter adjusted EBITDA by about $16 million, Peloton said.

PLTN shares jumped $7.38, or 8.8%, to begin Friday at $91.16.