Peloton Earnings: Recall of the Tread+ Will Cost $165 Million
Peloton Interactive (NASDAQ: PTON) reported its fiscal year 2021 third-quarter results last week and the No. 1 question shareholders had on their minds was: How much is the Tread+ recall going to cost?
In March, the U.S. Consumer Safety Protection Commission informed Peloton (CPSC) it had concerns over the safety of its Tread+ product after tragic injuries (and at least one death) were reported involving children. After hesitating initially, Peloton issued a recall of all Tread+ products on May 5 and offered full refunds. Management also apologized for its initial hesitation and acknowledged that it should have moved quicker to issue the recall.
During the earnings conference call, management anticipated this would be top of mind and was prepared to answer questions. In short, the company said the recall will cost $165 million, but there is more to the story.
Source Fool.com
