Fitbit's Hopes Pinned to Smartwatch
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Fitbit’s health is still up in the air. The San Francisco-based company, which laid off roughly 6% of its workforce earlier this year after lagging holiday sales, reported $299 million in first-quarter revenuecompared with $505 million for the year-earlier periodon Wednesday. Though results beat analyst expectationsinvestors reacted by sending the brand’s stock up 10% in late-day tradingthe year remains one of transition, according to Chief Executive and President James Park, who is also a co-founder. He and analysts expect Fitbit’s sales to be buoyed by the company’s launch of a smartwatch later this year.
“We’re optimistic about the smartwatch category,” said Park on a conference call to discuss the earnings. “A lot of that optimism is driven by what we feel will be our own unique perspective.” He noted that as Fitbit looks to streamline its fitness tracker assortment, it will also try not to overwhelm the consumer when it launches the smartwatch portfolio.
In recent years, the 10-year-old Fitbit has been a fitness darling with the benefit of being first-to-market with a product coveted by consumers. After going public in 2015, the brand ran its first Super Bowl ad last year and was considered a shoo-in for holiday gift lists. But added competition from other players, combined with a lack of major product innovationmost new releases are simply playing musical chairs with different features, according to one analysthave led to souring sales.
