Fitbit swung to its first quarterly loss as a public company in the crucial holiday quarter as weak sales of its devices suggested its days of double- and triple-digit growth are over.
The fourth-quarter results were worse than both Fitbit and Wall Street analysts had predicted. Revenue fell 19% to $574 million, missing analysts’ estimates of $576 million and the range of $725 million to $750 million that the company had projected before Thanksgiving.
Fitbit also reported that it lost $146 million, or 65 cents per share, compared to a profit of $64 million, or 26 cents, a year earlier. Excluding certain items, it lost 56 cents per share, six cents worse than what Wall Street analysts had been expecting.
“The company has struggled in recent months because Fitbit and other fitness trackers have become accessories more than must-have devices,” The Wall Street Journal said.
Sales of Fitbit’s health and fitness trackers fell to 6.5 million in the quarter, down from 8.2 million in the same period a year earlier, even though the company rolled out four new devices in 2016.
As Forbes reports, Garmin sells far fewer fitness trackers overall but reported much better earnings on Wednesday, beating estimates on its top and bottom line. “While Fitbit’s sales are declining by double digits, Garmin’s fitness wearable sales are rising by double digits,” Forbes noted.
For fiscal 2017, Fitbit expects to lose somewhere between 22 cents and 44 cents per share on revenue of $1.5 billion to $1.7 billion. Wall Street was projecting a 32-cent per-share loss on $1.6 billion in revenue. Full-year 2016 sales came to $2.17 billion.
“Our 10-year history of building this category, coupled with our powerful brand and engaged global community, gives us confidence we are making the right investments to support our vision and drive long-term success,” CEO James Park said in a news release.
In December, Fitbit acquired smartwatch maker Pebble’s intellectual property and some employees for $23 million. It claims a 23% share of the wearables market, well ahead of Xiaomi, Garmin, Apple, and Samsung.