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Fitbit Shares Dive 21% After Q3 Guidance Cut

Shares in Fitbit dived as much as 21% in after hours trading, following a Q3 guidance cut, and lower-than-expected Versa Lite sales.

“With weaker Versa Lite sales, we are lowering the midpoint of our 2019 revenue guidance by $95 million to $1.455 billion from $1.550 billion and now expect full year 2019 revenue to be $1.43 billion to $1.48 billion,” reads the company’s financial statement.

Q2 earnings beat analyst forecasts, posting an adjusted loss of US$0.14 per share [on US$314 million in revenue], versus an expected loss of US$0.18 per share [on US$312 million in revenue].

For the quarter, smartwatch revenue slumped 27% year-on-year, whilst Health Solutions revenue climbed 16%.

Q3 revenue is forecast to drop between US$335 million to US$355 million, a notable 10% to 15% year-on-year slump.

The company now expects a full fiscal year loss of US$0.31 to US$0.38 per share, almost double most analysts’ expectations.

Whilst Fitbit is cutting its non-GAPP operating expense target to around US$640 million, the figure is lower than the US$660 million – US$690 million previously projected.

Shares in Fitbit rebounded slightly in after hours trade, however, still down over 11% – slashing over US$100 million from its market cap.

“While we are disappointed to lower guidance for the year, we remain confident in our long-term transformation strategy and have demonstrated good results across key areas of the business,” claims CEO, James Park.

“We saw growth in devices sold, increased active users and continued growth in our Fitbit Health Solutions channel, up 42% in the first half of 2019”

“Coupled with innovative hardware and software offerings, we believe we’re well positioned to bring more users to the Fitbit platform and continue to grow our business.”

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