Fitbit Inc. (NYSE:FIT), the maker of health and fitness devices, continued its struggles on Monday after the company released guidance for the all-important holiday quarter that came far under expectations.
Fitbit previously told investors it expected to do between $725 and $750 million in revenue for the quarter and make a profit of between $0.14 and $0.18 per share. Gross margins were expected be in the 46% range.
Actual results were dismal in comparison. Revenue will come in between $572 and $580 million, a miss of more than 20%. Instead of posting a profit, the company will lose between $0.51 and $0.56 per share. And gross margins will be significantly below the previous expectations.
It also cut guidance for 2017, saying revenue will be between $1.5 and $1.7 billion, versus analyst expectations of $3.9 billion. And it will lose between $0.22 and $0.44 per share, versus estimates of a profit of $0.64. Gross margins will be around 45%, versus earlier estimates of 50%.
There’s just too much competition in the wearables space these days. Companies such as Nike and Garmin have released competing products, as well as cheap imitators coming from China. Both the Apple and Samsung watches also took away market share.
Needless to say, those were terrible numbers, and Fitbit shares are feeling it during Monday’s trading, falling more than 15%. Shares currently trade hands at $6.09 each, which is an all-time low. Remember, Fitbit shares flirted with $50 each shortly after the 2015 IPO.
