One of the most high-profile companies of the past eighteen months is facing an uphill climb.

In its quarterly earnings call Thursday, fitness company Peloton Interactive, known for its stationary bikes and on-demand fitness program, reported a loss of just over $313 million. It also shared a disappointing revenue outlook for its next quarter, a result of heightened commodity and freight prices. It anticipates $880 million in sales next quarter, significantly lower than analysts’ $1.01 billion expectation, according to CNBC.

In a shareholder letter, the company said it doesn’t anticipate being profitable, on an adjusted operating profit basis, in the coming fiscal year. It also will no longer forecast average monthly churn rates, an important metric, because of how difficult it has become to estimate.

In a 10-K filing released Friday, the company disclosed that in an audit, it found a “material weakness” in its accounting for inventory valuation.

“This was a result of discovering an immaterial discrepancy in our year-end physical inventory counts,” the company told shareholders. “It did not result in a material misstatement of our financial statements or disclosures, nor will result in any restatements of historical results.”

“We are not restating financials,” Peloton CFO Jill Woodworth told Yahoo Finance last week. “We had some manual errors in documentation. And the discrepancy was not at all material. And as you can imagine, we're already investing in remediation efforts here.”

As a result of its losses, the company on Thursday announced plans to slash the price of its original bike model by about 20%, from $1,895 to $1,495.

“If you look back over the last several years, we have always had the aim of making our products more accessible,” Woodworth said. “We introduced zero APR financing four years ago. We introduced a 30-day free home trial a couple of years back. And we've also cut the price of our digital app.”

The pandemic, which spurred massive growth for Peloton’s virtual fitness model, forced the company to really multiply its manufacturing output by eight or nine times, Woodworth said. As a result, it will take the company “a couple of quarters to really see that leverage back into the system, but we expect it in the back half of the year.” 

From an inventory perspective, however, the company is “finally in a place where we can actually enact a dramatic price change to really open up the accessibility of our products. So we're really excited about it.”

The company considers the price cut, Woodworth said, “a great way to expand our addressable market and get more people into the Peloton ecosystem. We've always said when we’re able to, we will make our products more affordable, so I don't necessarily think there's anything surprising about the move.”

In the 10-K filing, Peloton shared it had been subpoenaed by the Justice Department and the Department of Homeland Security for information related to its reporting of injuries associated with its treadmill product. The Securities and Exchange Commission is also investigating it, it said, and it has been named in “several lawsuits” related to the recall.

In April, the U.S. Consumer Product Safety Commission said people with children and pets should immediately stop using Peloton’s Tread+ treadmill, following the death of one child and dozens of reported injuries. 

Peloton immediately refuted the report, calling it “inaccurate and misleading” and denying that the treadmills were dangerous. Less than a month later, on its May earnings call, it announced the recall of 125,000 treadmills, waived three months of membership costs and CEO John Foley apologized.

"I want to be clear, Peloton made a mistake in our initial response to the CPSC's request," Foley said. "We should have engaged more productively with them from the outset. For that, I apologize."

“Safety is paramount for us and for our members,” Woodworth told Yahoo, adding that the new treadmill model will include Tread Lock, a feature that requires a passcode to turn the Tread model on, which she said makes it “the safest treadmill on the market.” 

The company didn't disclose if DHS explained why the safety issue of its product is a homeland security investigative matter.  

But the Tread recall will not result in new prices for other products, such as Peloton’s new edition Bike+ or Tread, said Woodworth, adding that cost efficiencies may eventually lead to lower prices.

Peloton may cut prices “over time, especially when we're able to move our manufacturing base more domestically with the Peloton Output Park that we announced a couple of months back,” she said.