What Happened To Peloton’s CMO Dara Treseder And The Wellness Industry At Large?

Key takeaways

• Peloton CMO Dara Treseder is leaving the company for Autodesk just weeks after a broader executive shakeup
• Meanwhile, both Peloton and Planet Fitness stock are on the downtrend following recent disappointing quarterly reports
• However, surveys indicate that wellness remains top of mind for Americans – and some companies standing to benefit more than others

Fitness giants Peloton and Planet Fitness’ stock prices continue to plunge post-Covid. Peloton in particular has had a rough go, slashing employee counts and curbing costs with third-party solutions. In the last few weeks, the company has bled multiple high-level executives, including Peloton CMO Dara Treseder.

And yet, recent surveys show that 62% of Americans consider health and wellness a top priority. In fact, it’s the “last thing” they’d compromise during a potential recession, behind socializing, drinking and even their daily caffeine rush.

These results showcase just how highly consumers value their health in the pandemic’s aftermath – and what they’d be willing to give up to keep working out.

Which begs the question: where lies the disconnect?

Peloton’s CMO says goodbye

Peloton CMO (Chief Marketing Officer) Dara Treseder announced her leave this week amid recent shakeups at the beleaguered home fitness giant.

Treseder, whose last day will be 4 October, first joined Peloton in 2020 after stints at high-profile firms like Goldman Sachs and Apple. She plans to take on the CMO mantle at software maker Autodesk. Peloton hasn’t announced a potential replacement for the soon-to-be vacant CMO position.

As senior vice president of marketing, membership and communications, Treseder oversaw several Peloton milestones.

She supervised celebrity content partnerships with Usain Bolt and Beyonce, prodded its expansion to Australia, and heralded a new nationwide bike rental program. Treseder also ushered four new products to market, including Peloton’s new $3,195 rowing machine released just last week.

Peloton briefly commented on her departure Monday, stating: “During her time at the company, Peloton has become one of the most beloved and culturally relevant brands and our Member base has grown from over 2.6 million to over 6.9 million.”

A rush of corporate shakeups

Peloton’s CMO isn’t the first high-profile name to depart the company this month.

Just two weeks ago, Peloton co-founder John Foley stepped down from his board chair position, effective immediately.

Co-founder and Chief Legal Officer Hisao Kushi put in his notice to exit 3 October, while Chief Commercial Officer Kevin Cornils stepped down as of last week.

This corporate restructuring comes as Peloton desperately strives to right its course following a successful year during the pandemic. CEO Barry McCarthy, who took over this past February, has instituted a number of changes in his attempt to bring the company back to profitability.

Peloton’s peaked year

Covid’s home fitness darling enjoyed over a year of rapid expansions as lockdowns and work-from-home arrangements spurred a massive home workout revolution.

The company, which went public in 2019, thrived as gyms shut down and expensive workout equipment took their place. Peloton’s stock peaked around $167 in October 2020 at the height of WFH.

But when Covid restrictions ease, people returned to the office and gyms reopened, Peloton’s products fell out of favor – as did its stock. Sinking profits didn’t help; in Peloton’s last quarter, it reported a $1.24 billion loss, its sixth straight decline in a row.

As of Monday’s close, Peloton teeters near penny stock territory at a mere $8.22 per share.

A dramatic reshaping

But the company isn’t accepting its fate lying down. CEO Barry McCarthy, who came to Peloton after tenures at Spotify and NetflixNFLX
, has pushed for massive changes to revive the drowning company.

Aside from massive layoffs and outsourced manufacturing, he’s also pushed Peloton’s products onto Amazon, with rumors flying that the company will move to third-party delivery only by the end of the year. McCarthy, alongside Peloton CMO Treseder, also introduce a bike rental option and expanded Peloton’s digital subscriber reach.

Meanwhile, at Planet Fitness…

On the other hand, we have budget gym operator Planet Fitness, whose stock popped 3% in premarket trading Monday thanks to a favorable research report.

Raymond James analyst Joseph Altobello adjusted the firm’s rating, noting Planet Fitness’ “resilient and recession-resistant business model” as a strength in the current environment. He further targeted the company’s value position, store expansions and low near-term debt maturities as positives for the company’s prospects.

And with a valuation that’s well off recent highs, he believes the company’s stock is also well-positioned for growth. Planet Fitness stock has shrunk 22.6% in the past month and 38.4% since January. However, its stock is up nearly 110% over the last five years. (Ostensibly, recent Planet Fitness stock losses follow reported earnings of $224.4 million that fell short of expectations.)

Opposing journeys and plenty of potential

Planet Fitness’ pandemic performance was rather opposite that of Peloton’s.

While the WFH era spelled good news for at-home fitness, global lockdowns decimated the gym’s profits. But when the world reopened, the company surged into expansion mode. In the latest quarter, Planet Fitness has opened 34 new gyms with plans for an additional 1,000 in place in the U.S. alone.

Planet Fitness sits in an unusually robust macroeconomic position.

As inflation continues to bash consumer wallets, many are pulling back on unnecessary spending. But with memberships starting at just $10 a month, Planet Fitness offers enormous value for people who can’t afford to pay through the nose to maintain their health with an expensive membership or home equipment.

That value expands beyond high inflation. As CEO Chris Rondeau pointed out, Planet Fitness added 1.1 million members and doubled its store count during the Great Recession, proving that consumers value budget health options when money gets tight.

Despite the company’s recent expectations miss, its quarterly earnings reaffirm this potential. Planet Fitness added 300,000 net new customers last quarter, bringing its membership count to 16.5 million.

Barring more shutdown orders, it seems likely that budget gyms, rather than expensive gear, will drive fitness spending in rough economic climes.

Don’t forget the influencers

Peloton’s CMO departure and Planet Fitness’ stock potential represent exciting developments for investors. But beyond the pale of public corporations, the era of home fitness burgeons with social media influencers and creative workout brands.

Portable workouts and sweaty socialization on demand

During the pandemic, those who couldn’t afford the cost or space for expensive gear turned to another source for their fitness journeys: the internet. A variety of streaming services cropped up as popular alternatives, varying across price points and portability.

Popular popular picks included free YouTube tutorials, Planet Fitness’ virtual workouts, the Nike Training Club, Beachbody on Demand and countless Roku fitness channels. Several apps also pushed into the mainstream, like mobile fitness app TrueCoach; running and cycling app Strava; and workout and nutrition service Tone & Sculpt.

Each app offered its own take on at-home fitness, from high intensity training to meditative yoga to competitive running. And unlike some of Peloton’s digital subscriptions, they rarely required exclusive or expensive equipment.

The WFH era also provided massive impetus to push fitness lovers toward social media influencers, many of whom saw their subscriber counts swell into the millions.

Though not a new phenomenon, social media fitness gurus seized the opportunity to welcome new members into their thriving fitness culture. Clammy high-fives and grunting gym bros were replaced by tagging fitness influencers in sweaty selfies, live feed comments and other digitized socializations.

High-tech fitness innovations

Of course, Peloton and Instagram models weren’t the only ones who raked in the profits. A multitude of high-tech, at-home workout brands also carved their own cash-flushed niches during the pandemic.

One such example is Mirror, a Lululemon-owned smart mirror that operates like a wall-mounted tablet. Mirror’s subscription services permit users to participate in online classes, watch fitness videos and correct their form during workouts.

Zwift also gained notoriety during the pandemic as a gamified cycling platform that pitted user avatars against other racers on a virtual course.

A few brands, like NordicTrack and Nautilus, also competed directly with Peloton, offering more affordable takes on bikes, ellipticals and treadmills.

Peloton CMO or Planet Fitness stock: Why choose?

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