Peloton The Peloton bike
Peloton will reportedly pause production of its bikes and treadmills as there has been a "significant reduction" in demand, according to internal documents obtained by CNBC — a decision the brand's CEO later denied, saying they're just "resetting our production levels."
The reported manufacturing halt comes as the company faces a reduction in sales of their at-home fitness products while gyms reopen after shutting down during the COVID-19 pandemic.
Peloton currently has thousands of cycles and treadmills in inventory, the confidential presentation dated Jan. 10, stated, according to CNBC.
Beginning in February, the at-home fitness brand reportedly planned to temporarily stop Bike production for two months and hold off on manufacturing their Tread treadmill for six weeks. Additionally, its more expensive Bike+ will reportedly not be in production again until June. No Tread+ treadmills will be made this year, according to the CNBC-obtained documents.
The production of Tread+ was previously temporarily halted last year following a safety recall.
Peloton did not immediately respond to PEOPLE's request for comment and declined to comment to CNBC.
In a letter published on Peloton's website later Thursday, CEO John Foley denied that production on their exercise equipment was being paused.
"Notably, we've found ourselves in the middle of a once-in-a-hundred year event with the COVID-19 pandemic, and what we anticipated would happen over the course of three years happened in months during 2020, and into 2021," Foley said. "We worked quickly and diligently to meet the demand head-on at a time when the world really needed us, in large part thanks to how hard you worked every day. We feel good about right-sizing our production, and, as we evolve to more seasonal demand curves, we are resetting our production levels for sustainable growth."
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In addition to changes in customer behavior, the brand didn't account for how price increases would affect sales, as well as the lackluster interest in their new product, Peloton Guide, a $495 strength training device, according to the CNBC report. The company said this is a sign of "a more challenging post-Covid demand environment," CNBC reported.
Later this month, Peloton will start charging an additional $250 delivery fee for the Bike and $350 for the Tread.
The production halt follows a blockbuster late 2020 and early 2021 for the company that saw high demand for items amid the pandemic. As of mid-January 2021, Peloton's stock was going for $171.09 a share. Now, after the CNBC report's release, Peloton's stock shares fell more than 20%, to $24.22.