(CNN) — Peloton investors are going to have to take a meditation class (or several) after its latest earnings report that sent its shares plunging by about a third.
The once-hot fitness company reported late Thursday that sales of its stationary bikes and treadmills, which make up 60% of its business, fell 17%. Revenue grew just 6% to $805 million, which was below analysts' expectations.
In a call with analysts, Peloton's Chief Financial Officer Jill Woodworth said it's "clear that we underestimated the reopening impact on our company and the overall industry."
Simply put, more people are returning to brick-and-mortar gyms or buying a Peloton rival.
Planet Fitness' stock closed 12% higher Thursday after reporting a strong earnings report and revealing that its membership levels nearly returned to its pre-pandemic peak of nearly 16 million. Its stock is up 25% for the year.
Peloton's move to slash the price of its lower-end bike by 20% to $1,495 in August was also a disappointment. "While the price drop led to conversion rates that exceeded our forecast, overall traffic has not met our initial expectations," admitted Woodworth.
The news wiped away about $9 billion off Peloton's market value, a stark contrast from 2020 when it was one of the biggest winners in the COVID-19 lockdown as people exercised at home. The stock is on track to lose about 70% year-to-date.
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