Fitbit Cuts Q4 Outlook, Plans 6% Reduction In Global Workforce

(RTTNews) - Fitbit, Inc. (FIT) Monday announced a cut in fourth quarter earnings guidance and now expects an adjusted net loss of $0.51 to $0.56 per share. Earlier, the company was looking for a profit of $0.14 to $0.18 per share.

Revenue outlook for the fourth quarter is in a range of $572 to $580 million from $725 to $750 million in the previous year. Annual revenue growth is expected to be approximately 17 percent, down from the previous forecasted growth of 25 to 26 percent. The company projects to sell 6.5 million devices for the quarter. Gross margin is expected to be below its previous projection of 46 percent.

The company said it has experienced softer-than-expected holiday demand for trackers in most mature markets, especially during Black Friday.

James Park, Fitbit co-founder and CEO said, "Fourth quarter results are expected to be below our prior guidance range; however, we are confident this performance is not reflective of the value of our brand, market-leading platform, and company's long-term potential."

Fitbit is planning direct action to reduce the expense basis of the company while maintaining necessary investments to drive future growth and maintain its global leadership position in the wearables market.

Exit operating expense run rate is expected to be approximately $200 million, to $850 million for 2017.

The company said its reorganization of its business, and a reduction in force would impact approximately 110 employees, constituting approximately 6 percent of the company's global workforce.

For the first quarter Fitbit expects to record approximately $4 million towards restructuring.

Looking ahead to the full year 2017, the company expects loss per share of $0.22 to $0.44 and revenue of $1.5 billion to $1.7 billion. Gross margin is expected to be 45 to 50 percent.

Further, Fitbit's two co-founders, CEO James Park and Chief Technology Officer Eric Friedman have also announced their intention to reduce their 2017 salary to $1.