Fitbit shares tank 29 percent as holiday sales look bleak

No Comments



Fitbit is going to have a rough holiday season as the company shared a disappointing outlook for the next quarter on yesterday’s earnings call. As a result, Fitbit shares (NYSE:FIT) opened at $9.03, down 29.5 percent compared to yesterday’s closing price of $12.81.

So what happened exactly? Fitbit’s earning report yesterday wasn’t great, but it wasn’t too bad either. According to Forbes, earnings were in line with the analysts’ expectations, and revenue was slightly below expectations — $504 million vs. $507 million.

This doesn’t seem enough to tear the company apart on the stock market. The issue is what’s going to happen next. Fitbit devices seem like the perfect gift for the holidays. But Fitbit says it’s not going to be the huge quarter investors expected.

Fitbit’s own outlook says that earnings per share are going to be between $0.14 and $0.18, well below expectations of $0.75 per share, according to the WSJ.

One reasons is that Fitbit expects to sell less device (between $725 million and $750 million vs. $985 million expected). And it’s not just a demand issue. Fibit released the Flex 2 earlier this month, and the company is now facing production issues.

A soft demand combined with limited availability for the latest device means that the next three months are going to be tough. The Flex 2 could have boosted the company’s sales, but people could delay their purchase or buy something else if they can’t find it.

The company now has a market capitalization of $2 billion. It seems pretty cheap for a powerful consumer brand with a good distribution strategy. It makes me wonder whether companies are looking at Fitbit as a potential acquisition target.



Source link

This is author biographical info, that can be used to tell more about you, your iterests, background and experience. You can change it on Admin > Users > Your Profile > Biographical Info page."

About us and this blog

We are a digital marketing company with a focus on helping our customers achieve great results across several key areas.

Request a free quote

We offer professional SEO services that help websites increase their organic search score drastically in order to compete for the highest rankings even when it comes to highly competitive keywords.

Subscribe to our newsletter!

Fields marked with an * are required

More from our blog

See all posts