Takeaways
- Peloton has signed a five-year global partnership agreement with Lululemon.
- As part of the agreement, Peloton will provide exclusive digital content to Lululemon, while Lululemon will become Peloton's primary apparel partner
- Peloton shares jumped 10% in early trading Thursday before giving up some gains to trade up 2%.
Shares of Peloton Interactive (PTON) have jumped more than 10% in early trading Thursday and 2% at 10 a.m. ET. after announcing a five-year partnership with Lululemon (LULU).
As part of this agreement, Peloton will offer a exclusive digital fitness content to the sportswear company, while Lululemon will become Peloton's primary apparel supplier. Peloton plans to start selling co-branded products next month, and Lululemon said its Studio All-Access members will be able to access thousands of Peloton classes starting in November.
The move could boost Peloton's popularity to a moment when demand for its subscriptions has declined after soaring during the pandemic. Despite a 4% increase in connected fitness subscribers in its 2023 fiscal year, Peloton lost 29,000 subscribers in the fourth quarter. The partnership with Peloton could also help Lululemon expand its presence in the at-home fitness market.
“In the months to come, we look forward to “to bring this partnership with Peloton to life and leverage the strengths of both brands to further support our growing communities of guests and members on their fitness and wellness journeys,” said Lululemon Americas and Celeste, Global President of Guest Innovation. Burgoyne in a press release.
Lululemon shares were little changed following the 39;s news, but have increased by more than 17% since the start of the year. Despite Thursday's gains, Peloton shares have lost about two-fifths of their value so far this year.
TradingView
Fix – Sep. 10:30 p.m. ET: A previous version of this article incorrectly reported Peloton's fourth-quarter and full-year subscriber growth.
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Source: investopedia.com