(Reuters) -Peloton Interactive Inc will recall 2.2 million exercise bikes due to the risk of injuries from a seat-related issue, the company said on Thursday, sending its shares down 7%.
The voluntary recall piles on more pressure on Peloton as it works to tackle waning demand for its fitness equipment amid an uncertain economy.
“We have identified 35 reports of seat posts breaking out of 2,160,000 units sold in the United States, as of April 30,” Peloton said in a statement, after disclosing the defect earlier this month.
During the January to March quarter, Peloton said it had accrued $8.4 million as an estimated expense related to “voluntary corrective action plan” involving the defect.
The U.S. Consumer Product Safety Commission, in a separate statement on Thursday, said consumers should immediately stop using the recalled exercise bikes and contact Peloton for a free repair.
This recall involves Peloton Bikes with model number PL01 sold from January 2018 to May 2023 in the United States and is one of the company’s flagship products.
The seat post can break unexpectedly during use, creating a potential fall and injury risk, Peloton said. There is no impact to Peloton Bike+ Members nor Peloton original Bike owners in the UK, Germany, and Australia, it added.
“We’ve noted Peloton temporarily stopped selling Bike the past few days (Bike+ still available). Clearly negative, but we believe this headline may appear scarier than the actual announcement,” BMO Capital Markets analyst Simeon Siegel said in a note.
The Bike and Bike+ products contribute to a “significant majority” of Peloton’s sales, as per its latest annual filing.
The latest recall comes after the virtual workout company had agreed to pay a $19 million fine earlier this year for failing to promptly report a defect with its Tread+ treadmill that could cause serious injury.
(Reporting by Kannaki Deka in Bengaluru; Editing by Shailesh Kuber)