As part of a larger overhaul, Peloton will outsource all final-mile deliveries. The company will discontinue in-house deliveries and close 16 warehouses that supported the operation. In the next weeks, fitness company Peloton intends to hand over its final-mile business to J.B. Hunt and XPO. A company spokesman confirmed Friday that Peloton Interactive Inc. will outsource all of its final-mile warehousing and delivery functions to existing partners J.B. Hunt Transportation Services Inc. (NASDAQ: JBHT) and XPO Logistics Inc. (NYSE: XPO) and will discontinue in-house final-mile delivery operations. The change will take place in the next weeks, according to the spokeswoman. Furthermore, the ailing fitness company will close all 16 warehouses that formerly offered in-house delivery. The changes are anticipated to decrease Peloton’s (NASDAQ: PTON) per-product delivery expenses in half, according to President and CEO Barry McCarthy in a message outlining a sweeping restructure of the New York-based company. McCarthy also stated that the change will result in a “substantial reduction” in Peloton’s delivery crew. He stated that the company has been working with its third-party logistics partners to improve the delivery experience. McCarthy stated that Peloton is “seeing positive momentum” in terms of client satisfaction. Without going into detail about the delivery issues, he stated that the effort “has been a difficulty.” We won’t be able to solve it overnight, but we don’t have a choice but to make it work. The corporation did not specify how much of the final-mile delivery was done in-house vs how much was outsourced. According to the memo, Peloton will hike rates on its Bike+ and Tread products as part of the restructuring. It will also considerably cut its North American in-store network. Furthermore, all Peloton employees, with the exception of those hired to work remotely, will be obliged to return to their offices full-time by mid-November. During the epidemic, Peloton saw a surge in product demand as many gyms closed and more people switched to at-home exercise. However, the company underestimated the duration of the at-home workout fad as gyms reopened and COVID-related fears subsided. Equipment sales and supporting subscriptions have stalled. Meanwhile, the corporation is saddled with excess inventory at a time of diminishing demand. Peloton reported a significant net loss of more than $757 million in its fiscal third quarter, compared to an $8.6 million net loss in the same quarter in fiscal 2021. Revenue fell 24% year on year to $964.3 million. On August 25, the corporation will release its fourth-quarter and full-year fiscal 2022 results. Peloton stock increased 13.6% on Friday to close at $13.53. Over the last year, the stock has dropped 88%.
According to a company spokesman, Peloton Interactive Inc. will outsource all of its final-mile storage and delivery services to longstanding partners J.B. Hunt Transport Services Inc. (NASDAQ: JBHT) and XPO Logistics Inc. (NYSE: XPO), and will discontinue in-house final-mile delivery operations.
The change will take place in the next weeks, according to the spokeswoman. According to the spokeswoman, the ailing fitness company would also close all 16 warehouses that have handled in-house delivery.
The changes are anticipated to reduce Peloton’s (NASDAQ: PTON) per-product delivery expenses by 50%, according to President and CEO Barry McCarthy in a message outlining a sweeping restructure of the New York-based company. McCarthy also stated that the change will result in a “substantial reduction” in Peloton’s delivery crew.
He stated that the company has been working with its third-party logistics partners to improve the delivery experience. McCarthy stated that Peloton is “seeing positive momentum” in terms of client satisfaction. Without going into detail about the delivery issues, he stated that the effort “has been a difficulty.” We won’t be able to solve it overnight, but we don’t have a choice but to make it work.
The corporation did not specify how much of the final-mile delivery was done in-house vs how much was outsourced.
According to the memo, Peloton will hike rates on its Bike+ and Tread products as part of the restructuring. It will also considerably cut its North American in-store network. Furthermore, all Peloton employees, with the exception of those hired to work remotely, will be obliged to return to their offices full-time by mid-November.
During the epidemic, Peloton saw a surge in product demand as many gyms closed and more people switched to at-home exercise. However, the company underestimated the duration of the at-home workout fad as gyms reopened and COVID-related fears subsided. Equipment sales and supporting subscriptions have stalled. Meanwhile, the corporation is saddled with excess inventory at a time of diminishing demand.
Peloton reported a significant net loss of more than $757 million in its fiscal third quarter, compared to an $8.6 million net loss in the same quarter in fiscal 2021. Revenue fell 24% year on year to $964.3 million. On August 25, the corporation will release its fourth-quarter and full-year fiscal 2022 results.
Peloton stock increased 13.6% on Friday to close at $13.53. Over the last year, the stock has dropped 88%.
