Raphael Stevens

Peloton unveiled a new marketing strategy designed to capture a new customer base.
The company is introducing a new, tiered pricing structure for its digital app that includes a free membership option.
“[We’re] now leaning in for the first time to the idea that OK, not everyone is going to bring premium Peloton hardware into their home,” Tom Cortese, Peloton’s co-founder and chief product officer, told CNBC.

When Peloton unveiled its 2019 holiday commercial depicting a husband who gifted his wife a stationary bike for Christmas, the ad was widely panned as sexist, dystopian and reminiscent of a hostage video.
People took umbrage at the commercial’s characters – a white, upper-middle-class family – and said it sent a range of dangerous messages about everything from gender norms to body dysmorphia. 

While the controversy eventually faded from the headlines, the public remembered. The ad solidified Peloton’s nascent identity as a high-end bike company reserved for a certain type of person at a certain income level.
Now, the company is ready to change that perception. 
Peloton on Tuesday is launching a new marketing campaign that bills the retailer as a company for anyone, regardless of age, fitness level and income – or whether they shelled out thousands for a pricey piece of equipment. 
The brand relaunch comes a little over a year into Barry McCarthy’s tenure as CEO. He has worked to transform Peloton from a hardware-focused company into one that’s just as invested in its app and the high-margin subscription revenue that it brings. 

Source: Peloton

Since McCarthy, a former Netflix and Spotify executive, replaced founder John Foley in February 2022, the company has been on the defense.

It has worked to rein in its gargantuan costs, remedy recalls and find new revenue streams as demand for its connected fitness products slowed and consumers became more cautious about their discretionary spending. 
While the company has yet to return to profitability, it has managed to stop the bleeding. With a new marketing chief at the helm, Peloton says it’s ready to reintroduce itself to the world and shed the image the holiday ad seared into some minds.
“We know that the perception externally does not match the reality of who we are,” Peloton’s chief marketing officer, Leslie Berland, who started with the company in January and led the relaunch, told CNBC in an interview. “This company historically has been thought of as an in-home bike company for fitness enthusiasts but over the years, it has evolved into something that is much more bigger, much broader than that.” 

Peloton focuses on the app

The relaunch comes along with a new, tiered app strategy that includes an unlimited free membership option (with no credit card required) and levels that cost $12.99 and $24 monthly.
The content people will have access to varies by the level and, in some cases, legacy users will have less access come December when a grace period ends. Currently, people who pay $12.99 a month to use the Peloton app can do a bike class every day, but in December, they’ll only be able to do three per month.
The relaunch includes a “Gym” function that allows users to take Peloton’s app into the gym with them and create custom workouts. 

Arrows pointing outwards

Source: Peloton

Peloton is also saying goodbye to its trademark fire engine red and black colors in favor of a new mix of hues it says better captures the “energy” of a workout and the “afterglow” that comes. New branding materials include shades of purple, pink, green and a lighter red.
In a splashy 90-second marketing video shared with CNBC, Peloton’s app takes center stage. It shows people of all shapes, sizes, fitness abilities and ages using it to take strength and yoga classes at home, but also in gyms, which have long been considered a threat to Peloton’s business. 
While Peloton features its Bike, Tread and Row machines in the clip, it does not show the hardware until about 30 seconds into the video.

The message is a far cry from Peloton’s earlier commercials and marketing materials, which predominantly featured ultra-fit athletes using its equipment.
“[We’re] now leaning in for the first time to the idea that OK, not everyone is going to bring premium Peloton hardware into their home,” Tom Cortese, Peloton’s co-founder and chief product officer, told CNBC in an interview. “Our members have a phone, we’re on their phone, they take their phone where they want to go and if you want to put [the Peloton app] on someone else’s hardware, that’s fine, and if you want to bring it into someone else’s gym, that’s great.”
Peloton insisted the focus on selling subscriptions does not mean it has abandoned its hardware business, and said the company is on a dual track with both. The new campaign focuses on the app because there’s been so little advertising of it, and market research shows just 4% of consumers know about it, the company said.
“When we first started coming out of Covid, and the press likes to be tough on Peloton, it was ‘everyone’s going back to the gyms’ but we know that our members were using our products in the gym,” said Jennifer Cotter, Peloton’s chief content officer.  

Arrows pointing outwards

Source: Peloton

She pointed out that Peloton’s strength training content, not its cycling or running classes, is the No. 1 type of class for digital members and the No. 2 among those who have Peloton hardware. It shows how eager users are to consume Peloton content that has nothing to do with its equipment.
“When it comes to this initiative, we’re just excited that No. 1, our members will feel reflected and new members will feel like Peloton is for them,” said Cotter. “And then, you know, the tiering structure allows us to welcome people up the ramp.” 
Briana Deserio, 32, has been a Peloton member since the early days of the pandemic. She said the brand’s competitive and aspirational appeal originally led her to buy a Bike. 
When briefed about the company’s new marketing strategy, she told CNBC she supports the move and its focus on being inclusive. But she said there’s a chance making Peloton accessible to everyone could dilute its brand.
“It’s kind of like a club and now everyone’s coming into the club,” said Deserio. 
Berland, Peloton’s new marketing chief, isn’t concerned about the brand losing strength. She said the new marketing strategy reflects what the company already is.
“Our members, our instructors, our classes, our content. That is unchanged. The company has evolved into all of this,” said Berland. “It’s time for the brand and the marketing to represent all of that and all of its vibrancy.”

Arrows pointing outwards

Source: Peloton

Liz Coddington, Peloton’s chief financial officer, said creating different points of entry to the company’s content will set it up for long-term growth. 
“What we’re doing is we are opening up the total addressable market to Peloton to people who may not have considered us in the past because we weren’t really speaking to them,” said Coddington.
“The real goal truly is just to bring more people into the ecosystem of Peloton however they want to come in, and then help them on their journey in how they want to consume our content over time, whether it’s through the free option, through the lower tier or through the higher tier or eventually buying or renting our hardware,” she said.
The company has not incorporated potential upside from the app and marketing strategy into its financial outlook, and said some paid app members will likely downgrade to the free membership option. 
In the past, churn rates have briefly spiked when Peloton changed prices, but soon returned to typical levels, she said. 
“We are optimistic about it,” said Coddington. “But it’s hard to know until we know.” More

JAB Holding is preparing to take Panera Brands public through an initial public offering by switching up its leadership.
Panera Brands CEO Niren Chaudhary will be succeeded by Einstein Bros. Bagels CEO Jose Dueñas, effective July 1.
The restaurant company’s revenue surpassed $4.8 billion last year.

Customers patronize an open Panera Bread location in the Walt Whitman Mall on March 26, 2020 in Huntington Station, New York.
Bruce Bennett | Getty Images

Panera Bread’s parent company is switching up its leadership as it prepares to go public again.
The announcement, made Tuesday, confirms that the restaurant company is interested in an initial public offering after calling off a deal last year with Danny Meyer’s SPAC to go public again.

The arrangement would have exchanged shares of USHG Acquisition for the sandwich chain’s stock and allowed the company to survive a merger with Panera’s subsidiary Rye Merger. However, Panera scrapped those plans in July, citing market conditions.
JAB Holding, the investment arm of the Reimann family, bought Panera Bread in 2017 for $7.5 billion, taking it private. The firm combined the sandwich chain with Einstein Bros. Bagels and Caribou Coffee to form Panera Brands.
In the press release, Panera Brands said the leadership changes are “in preparation for its eventual IPO.”
Current CEO Niren Chaudhary will step down July 1 but plans to stick around as chairman of the company’s board. Chaudhary served as chief executive for four years after joining the company from Krispy Kreme. JAB Holding also owned the doughnut chain before its IPO in 2021 and still retains a 45% ownership stake, according to Factset.
Einstein Bros. Bagels CEO Jose Dueñas will take the reins from Chaudhary. Before joining the bagel chain in 2019, he served as chief brand officer for Sonic Drive-In. His resume also includes time at Darden Restaurants’ Olive Garden and Kellogg.

In 2022, Panera Brands’ revenue surpassed $4.8 billion. Panera Bread, the largest chain in the portfolio, has long been known as a technology leader in the restaurant industry. Digital orders account for more than half of the chain’s total sales, and its loyalty program has 53 million members. Panera Bread has also been testing A.I. drive-thru order taking and Amazon’s palm-scanning technology.
Panera Brands isn’t the only restaurant company publicly talking about going public. On Friday, Mediterranean fast-casual chain Cava filed to go public through an IPO. More

Lowe’s cut its full-year sales outlook.
The home improvement retailer beat first-quarter earnings and revenue expectations.
The company’s shares dipped in premarket trading.

A Lowe’s Home Improvement Warehouse worker collects carts in a parking lot on August 17, 2022 in Houston, Texas. 
Brandon Bell | Getty Images News | Getty Images

Lowe’s cut its full-year outlook Tuesday, as lumber prices fell and do-it-yourself customers bought fewer discretionary items.
The home improvement retailer lowered its forecast even as it beat Wall Street’s revenue and earnings expectations for the fiscal first quarter.

Shares of the company were down more than 1% in early trading.
Here’s what the company reported for the three-month period ended May 5 compared with what Wall Street was expecting, based on a survey of analysts by Refinitiv:

Earnings per share: $3.67 adjusted vs. $3.44 expected
Revenue: $22.35 billion vs. $21.6 billion expected

Lowe’s net income for the three-month period was $2.26 billion, or $3.77 per share, compared with $2.33 billion, or $3.51 per share, a year earlier.
Net sales fell nearly 6% to $22.35 billion from $23.66 billion in the year-ago period, but exceeded Wall Street’s expectations.
Comparable sales dropped 4.3% in the fiscal first quarter. That’s lower than the 3.4% decline that Wall Street expected, according to StreetAccount.

The home improvement retailer said it now expects total sales for the full year to range between $87 billion and $89 billion, lower than the $88 billion to $90 billion it had previously forecast. It said it projects comparable sales to decline by 2% to 4% this fiscal year, below the flat to down 2% that it had said before.
It said adjusted earnings per share will range between $13.20 and $13.60, below its previous range of $13.60 to $14.00.
CEO Marvin Ellison said in the company’s news release that lumber deflation, unfavorable weather and lower spending by DIY customers hurt quarterly sales. He said the lowered forecast reflects weaker-than-expected consumer demand.
Yet, he added, Lowe’s digital sales and its comparable sales among home professionals rose in the first quarter compared with the year-ago period.
He said the company remains “optimistic about the medium-to-long term outlook for home improvement and our ability to continue to grow market share.”
Lowe’s is the latest retailer to warn of slower sales ahead, as consumers become thriftier and reluctant to spend on big-ticket and discretionary items. Many other retailers, including Walmart, Target and Home Depot, also noticed fewer purchases outside of the necessities.
For Lowe’s and Home Depot, however, the time of year adds significance. Spring is the biggest sales season for home improvement.
The companies are not only competing for shoppers’ dollars as higher prices for groceries and more take up more of household budgets. They also are dealing with a shift in demand, as the spree of Covid pandemic-fueled home projects fades and consumers juggle other spending priorities, such as commutes, summer vacations and meals at restaurants.
Lowe’s competitor, Home Depot, posted a rare revenue miss with its quarterly report last week. The company missed sales expectations for the second consecutive quarter and cut its full-year forecast, as customers skipped big-ticket items like grills and opted for smaller, less expensive home projects.
Like Lowe’s, Home Depot also chalked up lower sales to colder and wetter weather in the western U.S. and falling lumber prices.
Shares of Lowe’s closed Monday at $203.15, bringing the company’s market value to $121.15 billion. Its stock is up nearly 2% so far this year, trailing the S&P 500’s gains of 9%. More

United is planning to add 35 flights to the Denver International Airport, its fastest-growing hub.
New nonstop routes include service to Greensboro, North Carolina; Dayton, Ohio; Lexington, Kentucky; and San Juan, Puerto Rico.
United is also slated to open a new lounge and reopen one of two remodeled clubs.

A row of United Airlines passenger planes parked at gates at Denver International Airport in Denver, Colorado.
Robert Alexander | Getty Images

United Airlines plans to beef up its schedule and add new lounges at Denver International Airport, the carrier’s bet that demand for flights at its fastest-growing hub will keep rising.
United said Tuesday that it will add 35 flights at the Colorado airport this year. New nonstop routes include service to Greensboro, North Carolina; Dayton, Ohio; Lexington, Kentucky; and San Juan, Puerto Rico. The airline’s Denver service this summer will average 450 daily departures, a spokeswoman said.

United was the airport’s largest carrier last year with 46% market share, compared with Southwest Airlines’ 31% share, Frontier Airlines with 10%, Delta Air Lines with 5% and American Airlines with 4%, according to airport data.
But its new service comes as shifting travel patterns during the pandemic are forcing airlines to rethink their networks and where to best deploy planes, which are in short supply.
Airport passenger traffic expanded rapidly during the pandemic as the city grew and travelers sought outdoor destinations amid restrictions aimed at stopping Covid-19 from spreading. Last year, the Denver airport handled a record of more than 69 million passengers, making it the world’s third busiest, up from 16th in 2019, according to Airports Council International.
In comparison, San Francisco, another United hub, which enjoyed a corporate travel business before the pandemic, served 57.5 million passengers in 2019 and just 42.3 million last year.
United is also slated to open a new lounge and reopen one of two large remodeled clubs the latest sign of airlines scrambling to make room for scores of high-spending travelers.
Last year, United opened a grab-and-go mini lounge at Denver aimed at travelers connecting to other flights. More

Elon Musk’s SpaceX is set to join the Federal Aviation Administration as a co-defendant to fight an environmental lawsuit brought after the first Starship test flight.
The groups suing the FAA are alleging the agency should have conducted a more in-depth environmental study on the likely impacts of SpaceX activity before allowing the company to launch its Starship rocket.
SpaceX CFO Bret Johnsen said Starship delays could harm the company financially and disrupt the deployment of its Starlink satellite internet service.

An aerial view of a Starship prototype stacked on a Super Heavy booster at the company’s Starbase facility outside of Brownsville, Texas.

Elon Musk’s SpaceX is set to join the Federal Aviation Administration as a co-defendant to fight a lawsuit brought by environmental groups following the company’s first test flight of Starship, the world’s largest rocket, which ended in a mid-flight explosion last month.
In a motion filed Friday in court, SpaceX requested that federal judge Carl Nichols allow the company to join the FAA as a defendant against environmental and cultural-heritage nonprofit groups that sued the aerospace regulator earlier this month. 

The plaintiffs “do not oppose” the company’s intervention, per the filings. Jared Margolis, a senior attorney with the Center for Biological Diversity and lead counsel for the plaintiffs, said it’s “standard and expected for the applicant to intervene in a case where their permit is at issue.”  
The groups suing the FAA alleged that the agency should have conducted a more in-depth environmental study on the likely impacts of SpaceX activity before allowing the company to launch the world’s largest rocket, Starship, from its Starbase facility, a spaceport on the Gulf Coast near Brownsville, Texas. 
The groups also alleged that the “mitigations” the agency required of SpaceX were not enough to avoid “significant adverse effects” to endangered species, their habitat and tribes in the area that count the land and wildlife sacred.
Friday’s SpaceX filing outlines the potential consequences for the company if the environmentalists win the lawsuit, noting implications for its business and finances — as well as arguing there would be damage to the “substantial national interest” and possible scientific benefits of Starship.
“If the Court were to rule in Plaintiffs’ favor, the FAA’s decision could be set aside, and further licensing of the Starship/Super Heavy Program could be significantly delayed, causing severe injury to SpaceX’s business,” the company wrote.

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The lawsuit seeks for the FAA to conduct an environmental impact statement (EIS) — a lengthy and thorough procedure that would likely sideline SpaceX’s Starship work in Texas for years.
The company also wrote in the motion that “the FAA does not adequately represent SpaceX’s interests” in the lawsuit, since it’s a government agency. It noted that the FAA “has a direct and substantial economic interest in the outcome of this case that the government does not share.”
The FAA in a statement to CNBC said it “does not comment on ongoing litigation issues.”

At stake for SpaceX

SpaceX Chief Financial Officer Bret Johnsen submitted a declaration alongside the motion to further detail potential damages to the company if it lost the lawsuit. In the statement, Johnsen wrote that “SpaceX has invested more than $3 billion into developing” the Starbase facility and Starship system since July 2014.
This year alone the company expects to spend about $2 billion on Starship development, according to comments CEO Musk made following its first fully stacked launch attempt last month.
Johnsen also highlighted the pipeline of contracts that SpaceX is building for future Starship missions.
SpaceX currently has a major NASA contract worth up to $4.2 billion to use the rocket to land astronauts on the moon. Additionally, the company has signed commercial customer contracts — including three separate missions for wealthy individuals Jared Isaacman, Yusaku Maezawa and Dennis Tito — for Starship that Johnsen wrote are “worth hundreds of millions of dollars at this time.”

Starship also is crucial to the future of the company’s Starlink satellite internet business, which has over 1.5 million customers. Johnsen noted that “SpaceX has invested billions of dollars into Starlink” to date.
Musk has previously highlighted the interdependence of those two businesses, with Johnsen further reiterating that SpaceX needs Starship flying in order to launch its second generation, or “V2,” Starlink satellites.
“Without Starship … not only will SpaceX be harmed financially by its inability to launch v.2 satellites, but also hundreds of thousands of people … are waiting until the Starlink constellation is upgraded and can serve them,” Johnsen wrote.
Finally, Johnsen noted that losing the lawsuit would cause the company to “substantially reduce” investment in its Starbase facility, which would harm its interests, as well as local employees and communities.

Fallout from first launch

Debris litters the launch pad and dmaged tanks (R rear) on April 22, 2023, after the SpaceX Starship lifted off on April 20 for a flight test from Starbase in Boca Chica, Texas.
Patrick T. Fallon | AFP | Getty Images

The dramatic and explosive first Starship launch saw the company achieve several milestones for the nearly 400-foot-tall rocket, which flew for more than three minutes. But it also lost multiple engines during the launch, caused severe damage to the ground infrastructure and ultimately failed to reach space after the rocket began to tumble and was intentionally destroyed in the air.
SpaceX is in the process of cleaning up damage to the launch site, which carved a crater into the ground and smashed debris into the tower, nearby tanks and other ground equipment. The launch also created a plume of dust and sand, with particulate matter reported as far as six miles from the launchpad.
The test flight also sparked a 3.5-acre forest fire.
Phil Metzger, a planetary scientist on research faculty at the University of Central Florida, is studying the substance of samples of the particulate matter. He thinks “SpaceX dodged a bullet” with the launch, telling CNBC that the amount of “concrete blowing around” could have destroyed the rocket on the launchpad.
“It could have been much worse than it was. I think they made a mistake by taking a risk and launching off the [concrete] surface, trying to do it that way one time. But it was like a 70% success. They cleared the tower, tested their first stage, got a lot of good data, found a problem with the staging and hopefully will be able to have that fixed and have a better outcome in the next test,” Metzger said.
Metzger did not assess the ecological impacts of the launchpad debris, and rocket explosion on endangered species that live in and migrate through the area. The Texas regional office of the U.S. Fish and Wildlife Service and independent researchers are among those studying the environmental impacts of the Starship test flight and explosion.
SpaceX’s motion also made the case for why Starship is ultimately beneficial to scientific endeavors. The company wrote that the rocket’s unprecedented capabilities “will allow scientists to focus on previously impossible scientific missions and pursue the fastest, easiest way to get their missions from concept to execution.”
“For instance, with its large capacity, Starship could economically put large telescopes and heavy science experiments in orbit, and cargo, people, and even colonies on moons and other planets,” SpaceX wrote.
Read the company’s filing to establish itself as a defendant alongside the FAA: More