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  • Peloton CEO Dara Tresseder is leaving the company for Autodesk just weeks after a broader executive change
  • Meanwhile, Peloton and Planet Fitness stocks are heading in a downtrend after recent disappointing quarterly reports.
  • However, surveys suggest that wellness remains top of mind for Americans โ€” and some companies will benefit more than others

The stock prices of fitness giants Peloton and Planet Fitness continue to fall after Covid. Peloton in particular has faced a tough move, cutting staff numbers and cutting costs with third-party solutions. In the past few weeks, the company has bled several high-profile executives, including Peloton CMO Dara Tresseder.

However, recent surveys show that 62% of Americans consider health and wellness a top priority. In fact, this is the “last thing” they give up during a potential slump, beyond socializing, drinking, and even their daily caffeine rush.

These results show just how deeply consumers value their health in the wake of the pandemic – and what they are willing to give up to keep going.

Which begs the question: Where does the separation lie?

Peloton Marketing Director Says Goodbye

Peloton CMO (Chief Marketing Officer) Dara Tresseder announced her departure this week amid recent changes to the beleaguered home fitness giant.

Tresseder, whose last day will be October 4, first joined Peloton in 2020 after stints at high-profile companies such as Goldman Sachs and Apple. It plans to take on the CMO mantle at software maker Autodesk. Peloton has not announced a potential replacement for the soon-to-be vacant CMO position.

As Senior Vice President of Marketing, Membership and Communications, Tresseder has overseen many Peloton milestones.

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She oversaw celebrity content partnerships with Usain Bolt and Beyoncรฉ, urged their expansion to Australia, and announced a nationwide bike rental program. Treseder has also launched four new products on the market, including the new $3,195 Peloton rowing machine that was released just last week.

"During her tenure 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," Peloton briefly commented on her departure on Monday.

A rush of corporate jolts

Peloton's chief marketing officer isn't the first high-profile name to leave the company this month.

Just two weeks ago, Peloton co-founder John Foley resigned from his position as Chairman, effective immediately.

Co-founder and legal chief Hisao Koshi put his notice of exit on October 3, while Chief Commercial Officer Kevin Cornells has resigned effective last week.

The company's restructuring comes as Peloton struggles to correct its course after a successful year during the pandemic. CEO Barry McCarthy, who took over the position last February, has made a number of changes in his attempt to return the company to profitability.

Peloton year peaked

Covid home fitness fans have enjoyed more than a year of rapid expansion as lockdowns and work-from-home arrangements have led to a massive revolution in home exercise.

The company, which went public in 2019, has boomed, as gyms have closed and expensive exercise equipment has taken their place. Peloton stock peaked at around $167 in October 2020 at the height of WFH.

But when Covid restrictions eased, people went back to the office and gyms reopened, Peloton's products were no longer favored โ€” as did its stockpile. Sunken profits didn't help; In the last quarter of the year, Peloton posted a loss of $1.24 billion, its sixth consecutive decline.

As of Monday's close, Peloton is oscillating near the cash-equity territory at $8.22 per share.

Dramatic remake

But the company does not accept its fate. CEO Barry McCarthy, who came to Peloton after taking a position at Spotify and Netflix
prompted massive changes to revive the sunken company.

Aside from mass layoffs and outsourcing manufacturing, it has also pushed Peloton products to Amazon, with rumors circulating that the company will move to third-party delivery only by the end of the year. McCarthy, along with Peloton CMO Treseder, introduced the bike rental option and expanded Peloton's digital subscribers.

Meanwhile, at Planet Fitness...

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

Joseph Altupelo, an analyst at Raymond James, revised the company's rating, citing Planet Fitness' "resilient, recession-resistant business model" as a strength in the current environment. It also targeted the company's value position, store expansions and lower near-term debt maturities as positives for the company's prospects.

Evaluated far from recent highs, the company's stock is believed to be well positioned for growth as well. Planet Fitness stock has shrunk 22.6% last month and 38.4% since January. However, its stock has risen nearly 110% over the past five years. (Ostensibly, the recent losses in Planet Fitness stock come after reported earnings of $224.4 million that didn't live up to expectations.)

Contrasting journeys and a lot of possibilities

The Planet Fitness pandemic performed the opposite of that of Peloton.

While the WFH era has been good news for at-home fitness, global shutdowns have decimated gym profits. But when the world reopened, the company jumped into expansion mode. Last quarter, Planet Fitness opened 34 new gyms with plans for an additional 1,000 in the US alone.

Planet Fitness is in an extraordinarily strong macroeconomic position.

With inflation continuing to hit consumers' wallets, many are pulling back on non-essential spending. But with memberships starting at just $10 per month, Planet Fitness offers tremendous value for people who can't afford to pay through the nose to stay healthy with an expensive membership or home equipment.

This value expands beyond high inflation. As noted by CEO Chris Rondo, Planet Fitness added 1.1 million members and doubled the number of its stores during the Great Recession, proving that consumers appreciate healthy budget options when money is tight.

Although the company's recent forecasts have missed out, its quarterly earnings confirm this potential. Planet Fitness added 300,000 new customers last quarter, bringing its membership to 16.5 million.

Barring more shutdown orders, it seems likely that gyms with tight budgets, rather than expensive equipment, will drive fitness spending in the tough economic climate.

Don't forget the influencers

CMO's departure of Peloton and the potential of Planet Fitness's stock represent exciting developments for investors. But outside of public companies is the age of home fitness with social media influencers and creative brands.

Portable workouts and sweaty socializing on demand

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

Popular popular picks included free YouTube tutorials, Planet Fitness virtual workouts, Nike Training Club, Beachbody on Demand, and countless Roku fitness channels. Several apps have also been pushed into the mainstream, such as the TrueCoach mobile fitness app; Strava running and cycling app; Tone & Sculpt Training and Nutrition Service.

Each app offered its own at-home fitness experience, from high-intensity workouts to meditative yoga to competitive running. And unlike some Peloton digital subscriptions, these subscriptions rarely require exclusive or expensive equipment.

The WFH era also provided a huge impetus to push fitness enthusiasts towards social media influencers, many of whom saw their subscriber count swell into the millions.

Although it's not a new phenomenon, fitness gurus on social media have taken the opportunity to welcome new members to the burgeoning fitness culture. Five-year-olds and their words at the gym have been replaced by tagging fitness influencers in sweaty selfies, livestream comments and other digital social connections.

High-tech fitness innovations

Of course, the Peloton and Instagram models weren't the only ones taking the profits. Many high-tech and at-home workout brands have also carved out their own cash niches during the pandemic.

One such example is the Mirror, a Lululemon-owned smart mirror that works like a wall-mounted tablet. Mirror's subscription services allow users to take part in online classes, watch fitness videos, and get in shape during workouts.

Zwift has also gained notoriety during the pandemic as a beloved cycling platform that pits user avatars against other racers on a virtual track.

A few brands, such as NordicTrack and Nautilus, compete directly with Peloton, offering more affordable prices on bikes, ellipticals, and treadmills.

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