Fitbit’s not looking so healthy as shares slump 30 per cent
How time flies. It was only a year ago that Fitbit's share price leapt 52 per cent on its market debut in New York, valuing the firm at more than $4.1bn (£2.6bn at the time).
Now the wearable device maker's fate doesn't look so healthy. Its revenue forecast for the holiday shopping quarter – a key period – fell well below of analysts' estimates. It was buffeted by weak demand and ongoing production issues with its new Flex 2 wristband.
Shares slumped more than 30 per cent in extending trading on Wednesday to $8.90, and look set to hit record-low levels today. Not really the type of record you want to be setting…
Read more: Pay by Fitbit? It could soon be a reality after this acquisition
The firm also reported lower than expected quarterly revenue. It rose 23 per cent year-on-year to $504m, but missed the consensus for $509m. Fitbit's unit sales grew 11 per cent and its average selling price rose by the same amount. New products like the Charge 2 and Flex 2 attracted new customers.
But Fitbit forecast $725m to $750m for the October to December quarter, which was considerably below analysts' estimate of $985.1m, according to Thomson Reuters.
It lowered its full-year revenue guidance to a range of $2.32bn and $2.4bn, not bad at all, but analysts had anticipated $2.6bn.
Read more: Fitbit shares jump 52pc on market debut in New York
Chief executive James Park tried to look on the bright side. "We continue to grow and are profitable, however, not at the pace previously expected." More of the tortoise, than the hare, if you will.
Park said to seek out faster growth the firm would focus on health; Fitbit already works with employers who offer its products to employees as part of corporate wellbeing programmes.
Before the results, Fitbit shares had already plummeted more than 69 per cent over the past year.
It faces increasing competition from a growing number of smartwatches, including the behemoth that is Apple (though Tim Cook's company is yet to nail it on that front either).