Following the supply chain can often give a deeper understanding of how companies will perform in upcoming quarters. If the news out of Rexon is any indication, Peloton is going to have a blow-out earnings report this coming week.
Since the end of June, Rexon’s factory area has been changed to 24-hour production, and in July it also maintained full-day production. The shipment of flywheels in July has increased compared with June. There is a better chance in August. The legal person estimates that Lishan Q3 flywheels Monthly shipments can be higher than 30,000 units.
The legal person originally estimated that with the increase in revenue month by month, Lishan’s revenue in August and September is expected to challenge the record high. However, driven by better than expected fitness equipment shipments, Lishan’s consolidated revenue in July was 1.084 billion yuan, compared with June. A 46.33% increase of 741 million yuan of 741 million yuan, a new high in single-month revenue ahead of schedule.
As Peloton rises, so will the manufacturers who support it. The major issue is trying to keep up with demand. The article notes that Rexon has moved to a 24-hour production timeline to keep up with demand, but it’s still difficult to produce something as large as a bike or a treadmill with the demand Peloton has seen in 2020.
Peloton will report earnings later this week, so we should have more guidance on the next quarter and how they will address demand. One would think that adding a lower cost treadmill will make it even harder to keep up, but it may end up being easier to manufacture. Last year, Peloton acquired Tonic to have more control over its supply chain.