The company — widely counted as the leader in the consumer wearables market — had told stock analysts that it would sell about $725 million worth of trackers in the quarter; the actual number was about $580 million. Rather than 25 percent growth, the number wound up being about 17 percent. And instead of a loss of between 14 and 18 cents a share, the actual number came in at 52 to 56 cents.
So what’s the good news? There wasn’t a lot. Sales in EMEA markets were strong, said CEO James Park. And he said that all the customer data the company was collecting would help it plan the next generation of products.
In response to the bad numbers, Park said Fitbit was writing down more than $150 million in product and parts inventory as well as return reserves. He also said the company was laying off about 110 people — about 6 percent of the company. No clear word about what departments might be hit, but Fitbit’s press release included words like “realigning sales and marketing spend” and “improved optimization of research and development.”
On the other hand. recall that Fitbit bought the software assets of Pebble and Coin over the last year, so it’s reasonable to expect an apps-based device and/or one that (finally) includes some kind of payments capability.
Fitbit’s stock, hardly a favorite since its IPO lockup expired, was down to about $6, off about 17 percent.