Peloton's $1,999 Bike Hits Costco Shelves, But Can It Pedal Away from $40M in Losses?

About a year ago, Peloton fell 20% after a recall that cost the company $40 million and left 20,000 members in a holding pattern, waiting for replacement seat posts… 

Well fast forward to today and the fitness giant is sweating its way back into relevance by partnering with Costco to sell its Bike+ in 300 stores, priced at a cool $1,999. But will this move help Peloton pedal back to profitability, or is it just another spin class going nowhere fast?

In an effort to recapture its former 2020-like glory (or at least stop the freefall) Peloton has turned to Costco, the home of bulk toilet paper, bargain Kirkland wine, and now, premium exercise bikes. From Nov. 1 to Feb. 15, Costco will be selling Peloton’s Bike+ in 300 stores at a price tag of $1,999, while Costco.com will list it for $2,199. This is a pretty steep discount from Peloton’s usual $2,495 price, but let’s be real: you go to Costco for deals, not to pay retail.

The question is, will Costco’s membership base (already known for prioritizing value over impulse) go for this pricey fitness gear? According to Peloton’s Chief Emerging Business Officer Dion Camp Sanders, this partnership could be the start of something beautiful. Costco’s members, who are younger, wealthier, and obsessed with wellness, seem to fit right into Peloton’s target market. 

In fact, nearly half of Costco’s new memberships in the past year have come from people under 40, many of whom have the space and disposable income to justify a home gym. The real challenge? Convincing them that spending nearly two grand on a bike is a better deal than those bulk frozen pizzas and rotisserie chickens.

This isn’t Peloton’s first rodeo with third-party retailers. They’ve already teamed up with Amazon and Dick’s Sporting Goods, plus struck deals with Hyatt Hotels to get their bikes into fitness centers. Add a partnership with Costco to the mix, and Peloton is clearly casting a wide net, hoping to lure in as many potential buyers as possible.

Peloton’s sales are still in decline. And with that ugly recall lingering in the rearview mirror, it remains to be seen whether these new strategies can steer the company back on course. With a loss of over $40 million and a reputation that’s taken a few bruises, Peloton’s spinning hard to keep from falling off the bike.

Peloton stock is down 4% year to date.

I’m gonna keep this quick. Our last alert spiked 203% in under four hours. And our next trade could drop any moment. If you want in on the action, click here to join the 2,000+ traders and become a Stocks.News Premium Member today.

Stock.News has positions in Amazon.