Fitbit is not having a good day. It actually didn’t have a good holiday, either.
The fitness wearables company gave guidance to its fourth quarter earnings and revenue looks to be falling well short of the targeted $725 million minimum: it looks to be either side of $576 million. Annual revenue growth is now expected to climb 17 percent, which is still black ink, but reflects poorly on the 25 or 26 percent gain hoped for.
Fitbit co-founder and CEO James Park said that while Black Friday didn’t prove to be the boost it used to be in its established markets, sales growth is still occurring. The company will attempt to streamline operations and transition into “new areas of demand”.
“We believe we are uniquely positioned to succeed in delivering what consumers are looking for in a smartwatch: stylish, well-designed devices that combine the right general purpose functionality with a focus on health and fitness,” Park said. “With the recent acquisition of assets from Pebble, Vector Watch and Coin, we are taking action to position the company for long-term success.”
Part of that positioning means erasing 110 employees off payroll, approximately 6 percent of the company’s current estimated workforce of 1,600. Efficiency hunting will result in a new organizational chart and that process is expected to cost $4 million.
The company forecasts revenue guidance to be around $1.6 billion for the upcoming year. Park and his partner founder and CTO Eric Friedman have agreed to reduce their salary to $1.