Fitbit Sales Slump, Shares Follow
For Fitbit’s Q1, 2.2 million devices were sold compared to the 3 million sold in the prior year, failing to meet analysts expectation of 2.3 million. This drop in device sales impacted revenue with it falling from US$298.9m to US$247.9m.
At the release of its earnings, Fitbit shares fell 5.1 percent to US$5.22 in extended trading after the company missed first-quarter sales estimates.
Fitbit said it expects current-quarter revenue to be in a range of US$275m to US$295m, below analysts’ estimate of US$309.9m, according to Thomson Reuters. The company’s net loss widened to US$80.9m in the first quarter ended March 31, from US$60.1m, a year earlier.
James Park, CEO at Fitbit says, “We made important progress in the transformation of our business in the first quarter as we continue to adapt to the changing wearables market. Early sell through of Fitbit Versa, our first true mass appeal smartwatch, has been the best in our company’s history, positioning us to expand our user base and capture greater share of the fast-growing smartwatch market.
“We continued to deepen our relationship with our users, investing in software and services that deliver on our promise of helping people achieve better health outcomes. To this end, we closed the acquisition of Twine Health and, most recently announced a long-term collaboration with Google that will accelerate innovation in digital health and wearables.”
Its new smartwatch, Versa was released in Q2 giving the company hope for its financial results.
The company says it expects results to be impacted by the reduced demand by the channel for trackers, partially offset by an increase in smartwatch revenue, driven primarily by Versa sales.
It expects smartwatches to grow as a percentage of revenue, but its overall mix to continue to be skewed towards trackers.