Fitbit Raises Outlook on Surging Sales; Profit Falls on Higher Costs
03 November 2015 - 9:30AM
Dow Jones News
Fitbit Inc. on Monday raised its financial projections for the
year as sales of its wearable fitness-tracking devices nearly
tripled in the third quarter from the year earlier.
The San Francisco company, however, reported that profit fell
33% in the third quarter, weighed down by surging costs.
Shares, up 34% from its June opening price, fell 4.4% to $39 in
late trading.
Fitbit, which went public in June, expects to make 92 cents to
96 cents a share on $1.77 billion to $1.80 billion in sales,
compared with its earlier view of 61 cents a share on $1.41 billion
in sales.
In 2014, when the company became profitable, it reported sales
of $745.4 million.
Historically, Fitbit makes most of its money in the fourth
quarter, largely tied to higher sales during the holiday season. In
2014, for example, the fourth quarter accounted for about half of
its annual sales.
Over all, Fitbit reported a profit of $45.8 million, or 19 cents
a share, compared with $68.9 million, or 34 cents a share, a year
earlier. Excluding stock-based compensation and other items, profit
rose to 24 cents a share from 13 cents a year earlier.
Sales surged to $409.3 million, from $152.9 million a year
earlier, as the company sold 4.8 million tracking devices.
Fitbit had projected profit of seven cents to 10 cents a share
on $335 million to $365 million in sales.
Gross margin narrowed to 47.9% from 54.7% as operating expenses
more than tripled to $128.7 million.
New products account for the bulk of sales, underscoring the
pressure to keep up with technical advances and shifting consumer
tastes.
Write to Maria Armental at maria.armental@wsj.com
Subscribe to WSJ: http://online.wsj.com?mod=djnwires
(END) Dow Jones Newswires
November 02, 2015 17:15 ET (22:15 GMT)
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