Peloton Keeps Growing, and So Do Its Pains

“They’ve got a great thing to offer, but I don’t appreciate how they’re treating a good chunk of their members,” Ms. Stier said. She sold her bike after receiving it, Ms. Stier said, disappointed by the quality and overall experience with the company. She bought another brand.

Since last fall, Peloton has acknowledged logistics problems in keeping up with demand for its bikes, which start at $1,895 and are equipped with a screen that shows subscription workout classes. The nine-year-old company has cited surging demand, shipping logjams, particularly at ports as the bikes are transported to the U.S. from manufacturers overseas, and weather disruptions. The pressures haven’t let up as demand continues to surge from people wanting to exercise at home amid Covid-19.

“Rapidly scaling a business during a global pandemic is difficult,” Peloton Chief Executive John Foley said in November.

The company, which reports financial results Thursday afternoon, projects sales of at least $3.9 billion for the fiscal year ending June 30, more than double the previous fiscal year. Its share price is up 30% in the past three months and has more than quadrupled from a year ago, powered by a still-growing legion of bike owners and investors who take to social media to champion and defend the company.

It isn’t clear what percentage of orders are affected by delays. Still, monthslong wait times for Peloton bikes and treadmills are a common refrain on social media, and the company warns consumers about the delays before they make a purchase. A common gripe based on social media posts and complaints to the Better Business Bureau: Customers get a delivery date that is weeks or months away, only to have their delivery canceled within hours of the expected arrival. Rescheduled dates may be months out.

Another complaint is that customers who finance a Peloton are making payments, sometimes for months, before receiving their bike.

“They are taking our money, not delivering a bike and then continuing to sell and deliver new bikes to new customers,” said Laurie Donnelly, who canceled her order after hers was delayed at the last minute and the new date was months out. She grew angry seeing accounts on social media of people receiving bikes in much shorter windows, and by differing explanations given by the company for the delay.

Peloton said it provides full refunds to anyone who wants one.

“Unfortunately, there are a number of port and pandemic-related issues out of our control that can impact our delivery schedule, and we are doing our best to get affected customers new delivery dates as quickly as possible,” a Peloton spokeswoman said.

She said the company “enables customers in most areas to schedule a convenient delivery date and time window,” adding that inventory as well as delivery issues can lead to delays.

BMO analyst Simeon Siegel said Peloton could see an end to its ability to thrive amid such logistics turmoil. “Before Covid, there were no large competitors that were largely funded, now there are more rivals that have raised meaningful amounts of capital,” he said.

Manufacturers in many industries have suffered production and delivery problems during the pandemic, and Mr. Siegel said a year in, consumers are far more tolerant of long wait times for coveted products. “It’s one thing to not have the units, but to have such a mismatch on deliveries is what’s triggering so much of the frustration,” he said. “It’s a classic indication of a company that grew quicker than its infrastructure.”

Peloton in December agreed to acquire commercial fitness-equipment provider Precor Inc., which will give the company additional U.S. manufacturing capacity.

The problems have given birth to angry would-be customers. Some 10,000 people have joined a Facebook group entirely devoted to Peloton delays, while the Better Business Bureau has registered more than 1,100 complaints about the company in the past year.

In December, Ms. Stier, of Bellingham, Wash., started surveying people on the Peloton delivery Facebook page and crunching the numbers using a Google data-gathering tool in an effort to both track down patterns and to convince Peloton executives that they had a serious problem.

She recently presented her findings to an investor group hosted by a stock analyst who follows the company.

“I started this out of frustration,” she said. “Now I’m doing it more to answer my own questions.”

Write to Sharon Terlep at [email protected]