Peloton reported its first billion-dollar quarter and announced it's investing $100 million to help speed up deliveries amid supply-chain delay
- Peloton reported more than $1 billion in revenue in the second quarter of fiscal year 2021.
- Peloton plans to invest $100 million to expedite the movements of bikes worldwide.
Peloton just had its best quarter ever.
The fitness company reported more than $1 billion in total revenue in the second quarter of fiscal year 2021, sparked by strong sales during the holiday season and increased demand for at-home fitness as the pandemic continues.
Subscribers to the company's $39 per month Connected Fitness membership increased by 134% compared to the same time last year. The company said it recorded its largest single day of Member workouts during the quarter at 1.6 million riders.
The boom in demand for Peloton bikes this year has led to monthslong delays and last-minute cancellations. Some users told Insider's Madeline Stone Peloton's customer service offered little help when customers reported issues with delivery.
The company said delivery challenges stem from pandemic-related slowdowns and congestion in West Coast ports as e-commerce booms. Peloton plans to invest $100 million to expedite the movements of bikes worldwide.
In a letter to shareholders, Peloton said, "While this investment will dampen our near-term profitability, improving our Member experience is our first priority."
In an email to members, the company explained the investment further: "Effective immediately, we are investing over $100 million to help expedite the movement of Bikes and Treads globally, in order to meet our delivery commitments. On average, in the coming months, we will be incurring a transportation and delivery cost that is over ten times our usual cost per Bike and Tread, including, in many cases, shipping them by air instead of by sea."
The company announced plans to acquire Precor, a fitness manufacturer for health clubs and hotels, in December for $420 million, its largest acquisition.