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Peloton’s original bike model has a potential safety issue with some seat posts that the fitness and media company has plans to address.
The issue has resulted in certain seat posts suffering a break while their owners used them, Peloton said in a Thursday filing with the Securities and Exchange Commission. The Peloton Bike+ has not been impacted.
Peloton said it "determined that a corrective action plan is warranted" for the potential issue with the seat posts during its third quarter.
A Peloton exercise bike is seen after the ringing of the opening bell for the company's IPO at the Nasdaq Market site in New York City, September 26, 2019. REUTERS/Shannon Stapleton/File Photo/File Photo (Reuters Photos)
There have been nearly three dozen instances of seat post breaks, 12 of which involved injuries, according to the filing. One person broke their wrist in an incident.
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The company noted in the filing that the 35 reports were "out of over 2.4 million units sold in the U.S. and Canada."
The Consumer Product Safety Commission has been voluntarily informed, Peloton said. The fix for the corrective action plan, once hammered out in collaboration with the CPSC, would get rolled out to customers, according to the filing.
Jen Van Santvoord rides her Peloton exercise bike at her home on April 07, 2020 in San Anselmo, California. (Photo by Ezra Shaw/Getty Images) ((Photo by Ezra Shaw/Getty Images) / Getty Images)
Peloton reported the corrective action plan for the issue had brought a $8.4 million "estimated contingent loss expense" in the quarter. The expenses "were not material to the current period financial performance," the company said in the filing.
Peloton has previously interacted with the CPSC. Earlier in the year, the CPSC announced an agreement with Peloton that involved a $19 million penalty after the company allegedly "failed to immediately report" hazardous defects in its treadmill product, Tread+, to the agency.
PELOTON FINED $19 MILLION FOR NOT REPORTING TREADMILL SAFETY ISSUES
It did a 2020 recall related to a clip-in bike pedal issue, according to a recall notice on the CPSC website.
In the third-quarter filing that included the seat post issue, Peloton said its revenue came in at $748.9 million, a 22% drop from 2022’s third-quarter when it was $964.3 million. Its net loss shrank to $275.9 million.
Peloton's shares have tumbled approximately 90% in the past year. (Peloton)
Peloton’s stock, at about $7.9 on Friday afternoon, has climbed nearly 3% price-wise from the start of the day. It has seen an over 54% drop in the past year.
| Ticker | Security | Last | Change | Change % |
|---|---|---|---|---|
| PTON | PELOTON INTERACTIVE INC. | 7.81 | +0.17 | +2.23% |
Barry McCarthy has been CEO of the company since February 2022, when co-founder John Foley left the role.
PELOTON CO-FOUNDERS JOHN FOLEY, HISAO KUSHI RESIGN IN LEADERSHIP SHAKEUP
FOX Business reached out to Peloton for additional comment on the seat posts.
Phillip Nieto contributed to this report.
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