Fitbit Shares Plunge 16% on Worse-Than-Expected Holiday-Quarter Sales Report
Fitbit shares closed 16 percent lower Monday to a new record low of $6.06 after the company reported it will cut 6 percent of its global workforce -- about 110 employees -- to account for losses and lower than expected…
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sales for 2016's holiday quarter. Fitbit expects its Q4 sales to come in at a range of between $572 million and $580 million, compared with a forecast of $725 million to $750 million, when it reports actual results Feb. 22, the company said in a Monday announcement. It expects to incur a Q4 net loss of up to 56 cents a share compared with a previously forecast net profit of up to 18 cents, it said. Nevertheless, Fitbit’s management is “confident this performance is not reflective of the value of our brand, market-leading platform, and company’s long-term potential,” CEO James Park said in a statement. “We believe Fitbit is in a unique position to stimulate new areas of demand by leveraging the data we collect to deliver a more personalized experience while developing upgraded versions of existing products and launching additional products to expand into new categories.” Softness in “overall demand” for wearables and activity trackers was among the factors Fitbit cited in early November when it forecast that revenue growth in its holiday quarter would top out at only 5 percent (see 1611030051). That revelation sent the shares plunging 33.6 percent to what then were record lows for the 17-month-old stock. At $572 million, the lowest end of its new 2016 guidance, sales for Fitbit's Q4 would actually incur a 20 percent decline from the $711.6 million in sales in 2015's holiday quarter.