Please ensure Javascript is enabled for purposes of website accessibility
Free Article Join Over 1 Million Premium Members And Get More In-Depth Stock Guidance and Research

Peloton's Delivery Pain Could Be Nautilus' Sales Gain

By Rich Duprey - Nov 25, 2020 at 11:11AM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Shipment delays are causing disgruntled customers to seek out other fitness equipment manufacturers.

Delivery issues that have been building up throughout the pandemic for Peloton Interactive ( PTON -2.02% ) could begin spilling over, hurting its own sales while helping those of rivals like Nautilus ( NLS 2.18% ).

Management recently admitted the delays customers are experiencing are "unacceptably long," but the problems are primarily the result of port issues as it receives shipments from overseas manufacturers, according to The Wall Street Journal.

Woman on an exercise machine

Image source: Nautilus.

Cycling past disappointment

Peloton's business, as well as those of other home fitness equipment makers, has exploded during the pandemic as gyms were forced to close. 

While the manufacturers expect some subscribers to their connected fitness classes to go back to their previous out-of-home workout schedules when the pandemic is finally brought under control, they're using the opportunity to try to win new loyal customers.

The Journal, though, reports of growing online dissension among Peloton customers, some of whom have formed support groups to discuss how to use Peloton's fitness courses with another company's equipment.

Nautilus is expecting full-year 2020 sales to surge 75% over the year-ago period, hitting as much as $565 million. Third-quarter sales were up 152% year over year, a record for the company, while operating profits of $44 million were the highest in the company's history.

The Journal says privately held Icon expects to notch $1 billion in revenue this year.

Undoubtedly a portion of those sales are coming from previous Peloton customers who report some deliveries have been delayed until well into January 2021.

While the trend is worrisome, it hasn't affected Peloton all that much. Its own quarterly earnings report saw sales triple from the third quarter in 2019.

The sales growth comes despite Peloton's equipment prices being substantially higher than the competition. But high prices coupled with long delays in receiving orders may convince consumers there are better options available.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis – even one of our own – helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Peloton Interactive, Inc. Stock Quote
Peloton Interactive, Inc.
PTON
$43.55 (-2.02%) $0.90
Nautilus, Inc. Stock Quote
Nautilus, Inc.
NLS
$7.02 (2.18%) $0.15

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning service.

Stock Advisor Returns
624%
 
S&P 500 Returns
141%

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 12/05/2021.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Our Most Popular Articles

Premium Investing Services

Invest better with the Motley Fool. Get stock recommendations, portfolio guidance, and more from the Motley Fool's premium services.