Demand for Peloton's (NASDAQ: PTON) pricey connected-fitness products is tumbling, and with a recession likely looming, the situation probably isn't going to improve anytime soon. There are only so many people willing to spend $1,500 on an exercise bike, which then requires a $44 monthly subscription. And there are even fewer people willing to shell out more than $3,000 for the company's new rowing machine.

Peloton made the mistake of assuming that pandemic-era trends would continue indefinitely, and that was a costly error. The company posted a net loss of $2.8 billion in fiscal 2022 on $3.6 billion of revenue, and cash flow wasn't much better.

On top of having a cost structure that needs some serious trimming, the plunge in demand has bloated Peloton's inventory. The company was sitting on $1.1 billion of inventory at the end of June, even after taking significant impairment charges in the fourth quarter.

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Source Fool.com