Peloton CEO apologizes for not recalling deadly treadmills sooner
Peloton Interactive on Thursday reiterated it had erred when it refused to recall its treadmills after a child died and dozens more were were injured in accidents involving its pricey exercise equipment.
"We made a mistake in our response. We should have been more open to a productive dialogue from the outside, and for that I apologize," John Foley, CEO and co-founder of the company told an earnings call with Wall Street analysts on Thursday.
Foley's words echoed a mea culpa made Wednesday, when the company revealed separate recalls of both its Tread+ and Tread treadmills. Peloton estimated the recalls would cost it $165 million. That's nearly three times its profits for all of 2020, when Peloton recorded net income of $63.6 million.
Foley spoke after Peloton reported a loss of $8.6 million in the fiscal third quarter ended March 31. It posted revenue of $1.26 billion in the period, exceeding Wall Street expectations of $1.11 billion.
Acknowledging the potential damage to the Peloton brand, the company plans to work to "get back on the right side of the line with trust and safety," said Foley, who vowed to work with U.S. Consumer Product Safety Commission.
Peloton's recall of both its Tread and Tread+ treadmills came after more than 70 incidents, including the death of one child and 29 other instances where users sustained injuries such as broken bones and cuts, the company and the CPSC announced Wednesday. The machines cost between $2,500 and $4,400 each and customers typically pay an additional monthly fee for streaming exercise classes for users. They can weigh more than 400 pounds.
The recalls came a month after the CPSC warned households with children and pets to immediately stop using Peloton Tread+ treadmills, and two months after Peloton cautioned people to keep children and pets away from the exercise equipment.
Peloton expects to deliver a software fix for the Tread+ with a "code to help prevent misuse" in the next couple of days, Foley said. The company does not expect the product to return to the market until a hardware fix is devised and approved by the CPSC. The repair will involve "something more robust, that would physically keep objects from getting under the back" of the treadmill.
The less expensive Tread should be coming back on the market sooner, perhaps in July, Foley said. Sold mostly in the U.K. and Canada, the Tread was recalled due to incidents that had screws attaching its consoles to its treadmills loosening and in some cases falling.