The festive season was not good to Fitbit as the firm is set to announce earnings for Q4 2016 that look like they’ll fall below expectations.
The wearable purveyor released preliminary financial results for the final quarter of last year and it is expected that revenue will hover between $572 million and $580 million.
While those aren’t small figures they are well below the $725 million to $750 million in revenue the firm previously forecast for the quarter. As a result the firm’s annual revenue growth is expected to sit at 17%, well below the 25% – 26% it hoped to achieve.
“While we have experienced softer-than-expected holiday demand for trackers in our most mature markets, especially during Black Friday, we have continued to grow rapidly in select markets like EMEA, where revenue grew 58% during the fourth quarter,” Fitbit founder and chief executive officer James Park said in a statement to investors.
In a bid to address this decline in revenue Fitbit is reorganising its business, a move it says will impact 110 employees or 6% of the company’s workforce.
It is unclear at this stage which employees will be affected by this reorganisation and how this less than stellar quarter will affect the folks Fitbit welcomed through its doors following the acquisition of Pebble.
Park however, remains hopeful and sees an opportunity for Fitbit to grow and deliver the firms first smartwatch. “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,” says Park.
Fitbit is expected to disclose its full earnings on 22nd February after the year-end audit review process is complete.