Fitbit, Inc, the premier provider of connected health and fitness products, today announced preliminary financial results for the fourth quarter 2016.
According to the preliminary financial information, Fitbit has reported that 6.5 million devices were sold and revenue for the fourth quarter of 2016 was in the range of $572 million to $580 million compared to the company's previously announced guidance range of $725 million to $750 million. For the full-year 2016, the company's annual revenue growth was approximately 17% from the previous forecasted growth of 25% to 26%.
While fourth quarter results are subject to change based on the completion of the company's customary year-end audit review process, we can assume that these might not change much. However, looking at the details presented by the company, it looks like the company has performed poorly in the fourth quarter comparatively.
What' more striking is that following disappointing fourth quarter financials, Fitbit is taking 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. As such, the company has announced 6 percent reduction in global workforce. Moreover, the preliminary statement issued by Fitbit shows the loss of 110 jobs, as part of its reorganization process and the company justifies such action by saying that it has been designed to "create a more focused and efficient operating model."
On the contrary, while the company has announced its quarterly revenue and annual revenue growth both have fallen below the company's guidance range, in 2017 the company plans to do more better."We believe the evolving wearables market continues to present growth opportunities for us that we will capitalize on by investing in our core product offerings while expanding into the smartwatch category to diversify revenue and capture share of the over global smartwatch market," said James Park, Co-founder and CEO, Fitbit.
He further added, "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. With the recent acquisition of assets from Pebble, Vector Watch and Coin, we are taking action to position the company for long-term success."