Peloton Stock Falls On Treadmill Recall, CEO Apologizes Ahead Of Q1 Earnings

Peloton stock tumbled Wednesday ahead of earnings Thursday after the high-end exercise equipment maker announced a voluntary recall of its treadmills.




X



In April, the Consumer Product Safety Commission said users with small children or pets should stop using the company’s treadmill following the death of a child.

Peloton (PTON) initially pushed back against the announcement calling it “inaccurate and misleading.”

But on Wednesday Peloton issued a voluntary recall of all its Tread and Tread treadmill machines warning customers to stop using the equipment and to contact the company for a refund.

“I want to be clear, Peloton made a mistake in our initial response to the Consumer Product Safety Commission’s request that we recall the Tread . We should have engaged more productively with them from the outset. For that, I apologize,” Peloton CEO John Foley said in a CPSC release.


IBD Live: A New Tool For Daily Stock Market Analysis


Peloton Stock, Earnings

Shares fell 12.2% to 84.86 on the stock market today. Peloton stock fell below its 50-day and 200-day lines last month on the treadmill’s safety concerns, according to MarketSmith chart analysis.

Among other stocks targeting online fitness, Lululemon (LULU) edged up 0.4%, and Nike (NKE) gained 1.7% helped by strong earnings from Under Armour (UAA), which jumped 10%.

The treadmill recall announcement came ahead of Peloton’s first-quarter earnings report late Thursday.

Estimates: A loss of 11 cents per share vs. a loss of 20 cents per share in the year-ago quarter.

Results: Check back Thursday after the close.

Peloton stock was hot during the coronavirus pandemic as gyms were forced to close.

But even as gyms reopen across the U.S. as vaccination efforts increase, Peloton hasn’t seen a slowdown in demand for its products bike or treadmill products.

Follow Gillian Rich on Twitter for investing news and more.

YOU MAY ALSO LIKE:

Is Peloton Stock A Buy With Earnings Around The Corner?

These Are The 5 Best Stocks To Buy And Watch Now

Find The Latest Stocks Hitting Buy Zones With MarketSmith