Peloton Co-Founder John Foley Is Leaving Company Amid Stock Struggles

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John Foley co-founded Peloton in 2012. On Monday, Peloton said he was leaving the company. Michael Nagle/Bloomberg

Peloton Interactive co-founder John Foley is leaving the company amid the latest wave of shake-ups at the interactive fitness firm.

The company said Monday that its board of directors had accepted the resignations of Foley, as well as chief legal officer and fellow co-founder Hisao Kushi. Chief Commercial Officer Kevin Cornils will also be departing.

“Now it is time for me to start a new professional chapter,” Foley said in a statement. “I have passion for building companies and creating great teams, and I am excited to do that again in a new space.”

Foley had stepped down from his role as CEO earlier this year, becoming executive chairman as the firm looked to cut costs and turn things around.

Karen Boone, who was the board’s lead independent director, was elected chairperson of the board. Tammy Albarran will take over as chief legal officer. Albarran is leaving her role as chief deputy general counsel and deputy corporate secretary at Uber Technologies (UBER).

Barry McCarthy succeeded Foley as chief executive in February. The company has announced layoffs, price hikes, and other new initiatives geared toward cutting costs while still trying to spur demand. Shares have fallen 90% in the past 12 months, as pandemic-driven demand for the firm’s at-home spin bikes waned amid the reopening. The stock was up 7.2% in Monday trading before the management announcements, then traded about 2% lower after hours.

Shares were down 0.5% in Tuesday premarket trading.

“Today’s changes are a reflection of personal decisions by leaders who paved the way for our future success, and we owe them our gratitude,” McCarthy said in a memo to staff provided by Peloton. “I’m excited to work with Karen, [Chief Emerging Business Officer] Dion [Sanders) and Tammy in their new or expanded roles—as well as each of you—as we pivot into the growth phase of our transformation.”

In an onstage interview at the Goldman Sachs tech conference in San Francisco, on Monday afternoon, McCarthy said he’s shifted his focus away from cost-cutting and toward growing the business. “It’s not enough to just cut costs—we need to lean into growth,” he said, adding that the company has “stopped the bleeding” on supply-side challenges and other issues. McCarthy said the company expects to reach sustained positive free cash flow by the end of the June 2023 fiscal year.

McCarthy also discussed the company’s opportunity in content-only subscriptions, making it easier for people who want to use the company’s content on competitor hardware. He says Peloton had historically not pushed that use case, but that there is opportunity to win more market share for the content—at high margins—by encouraging owners of competitive fitness hardware to use Peloton’s content to exercise.

McCarthy also said the company is looking to expand the company’s distribution through more retail outlets—including physical stores—in addition to a recently announced deal to sell hardware and accessories on Amazon (AMZN).

McCarthy also made clear that he isn’t going to stay in his current role for too long. “I came out of retirement to fix it, and when I fix it, I’ll go back into retirement,” he said.

Write to Connor Smith at connor.smith@barrons.com and Eric J. Savitz at eric.savitz@barrons.com