Peloton stock soars on Lululemon deal

Peloton Interactive Inc (NASDAQ: PTON) just announced a strategic partnership with Lululemon Athletica Inc (NASDAQ: LULU). Its shares are up a whopping 30% in extended hours.

Details of Peloton-Lululemon deal

The multi-dimensional agreement will make Peloton an exclusive provider of digital content around fitness for Lululemon. Dion Camp Sanders – its Chief Emerging Business Officer said in a press release today:

By bringing together the best in fitness content with the best in athletic apparel, we’ll give our communities one-of-a-kind experiences and special content that will inspire them to achieve their goals.

The five-year deal throws a much-needed lifeline to Peloton Interactive that’s trying to shift its focus from fitness equipment to subscriptions.

It ended its fourth financial quarter with subscriber count up 4.0% on a year-over-year basis as Invezz reported here.

Lulu will quit selling Studio Mirror

Peloton will now have Lululemon as its primary apparel partner.

On Wednesday, the Canadian firm also confirmed that it will quit selling its smart fitness mirror in the coming months. Service and support for customers who already own its Studio Mirror will continue, though, it added.

The stock market news arrives only a day after Peloton Interactive said Tom Cortese – its Co-Founder and Chief Product Officer was leaving and will be succeeded by Nick Caldwell – a notable Silicon Valley veteran.  

Shares of Lululemon Athletica Inc are keeping flat in after-hours at writing. Wall Street currently has a consensus “hold” rating on PTON and “overweight” rating on LULU.