The US company, which makes exercise bikes and treadmills, said it was "disappointed" that the commercial had been "misinterpreted".
It also thanked those "who understand what we are trying to communicate" who had contributed to an "outpouring of support".
Peloton also dropped subscription prices for its fitness video streaming app to $12.99 from $19.49 and extended a free trial period by two weeks.
Shares of the company fell about 5 per cent following the social media backlash.
The advert, which has been viewed more than two million times on YouTube, depicts a woman getting a Peloton bike for Christmas from her male partner.
She then records a video diary, documenting her year spent using the bike, before presenting it to him to say thank you.
"A year ago, I didn't realise how much this would change me," she says.
The 30-second ad, called "The Gift That Gives Back", sparked a huge storm on Twitter, with some claiming the husband was "controlling" and "manipulative" because buying his wife an exercise bike suggested that the she needed to lose weight.
Many added that the already slim actress looks exactly same, despite claims it "changed" her.
Sydney Chandler wrote that the advert is "dangerous, sexist, and just plain stupid and out of touch. A bad message."
Siraj Hashmi mocked the commercial, adding: "Nothing says 'maybe you should lose a few pounds' like gifting your already rail thin life partner a Peloton."
Nothing says “maybe you should lose a few pounds” like gifting your already rail thin life partner a Peloton pic.twitter.com/E2M9gFdD5A— Siraj Hashmi (@SirajAHashmi)December 2, 2019
Comedian and writer Jess Dweck compared the advertisement with an episode of Netflix's dystopian anthology series "Black Mirror".
After critics blasted the advert, Peloton shares fell by about 5 per cent in afternoon trading on Wednesday.
The only way to enjoy that Peloton ad is to think of it as the first minute of an episode of Black Mirror— Jess Dweck (@TheDweck)December 2, 2019
The company responded by dropping subscription prices for its fitness video streaming app to $12.99 from $19.49 and extended a free trial period by two weeks.
A Peloton spokesman said: "We constantly hear from our members how their lives have been meaningfully and positively impacted after purchasing or being gifted a Peloton Bike, often in ways that surprise them."
Look I don’t want to be “The Peloton Ad Guy” anymore but the newest commercial about the vlogging 116 lb woman’s YEARLONG fitness journey to becoming a 112 lb woman who says “I didn’t realize how much this would change me” is just ri-god-damn-diculous. Come on.— Clue Heywood (@ClueHeywood)November 25, 2019
The company defended their holiday spot commercial, saying it was created "to celebrate that fitness and wellness journey".
"While we're disappointed in how some have misinterpreted this commercial, we are encouraged by--and grateful for--the outpouring of support we've received from those who understand what we were trying to communicate," the spokesman added.
Meanwhile, Eric Schiffer, chief executive officer of Patriarch Organization, a Los Angeles-based private-equity firm said: "This was just a clueless mistake that social media is going to rip you apart over."
"I don't think it's going to create an avalanche of negative implications to revenues."
Founded in 2012, Peloton sells indoor exercise bicycles and offers packages requiring memberships to access live and on-demand classes from home. Its flagship product is a stationary bike is priced at more than $2,200.
The company's stock has risen 10 per cent since its initial public offering in September.