Fitbit Misses on Forecasts of Rollout of Devices

Fitbit Inc has bet that its global marketing campaigns that will introduces its latest wearable devices that are health-tracking, including a smartwatch that is inexpensive, will help keep its dominance in an industry that is becoming highly competitive.

For now, higher costs and sales that were slower than had been expected, that might come from those efforts, have raised concerns amongst its investors who have been watching the shares of the company lose nearly 50% of their value just this year.

Citing it rollout of its latest products, on Monday Fitbit forecast revenue as well as profit for the ongoing quarter that came up short of estimates by analysts.

The shares all declined up to 20% in Monday after hours trading after the company released its forecast.

Fitbit has been the leader in sales of wearable fitness devices, but competition from companies such as Samsung, Apple and Xiaomi might stunt the growth of the company.

Fitbit’s share of the market dropped to 22% during the third quarter of last year from 33% the same quarter one year earlier, according to data released by IDC.

In addition, to its rivalry with tech giants, companies like Under Armour and Fossil Group have developed their own connected device related to fitness.

James Park the CEO at Fitbit said the industry has been quite competitive for some time, and the story will be playing out over time, but during the short term, the company cannot control share price.

Shares of Fitbit were down $13.30 in Monday extended trading following a gain earlier of 5.9%.

Fitbit often times has been lumped with GoPro, the action cameras maker as a one-trick pony company, but Park has disputed that comparison.

Sales during its first quarter will be between $420 million and $440 million, said the company, which is based in San Francisco, on Monday. Analysts had expected the forecast to be as high as $485 million.

Per share earnings, excluding special items would be zero to two cents, compared to estimates by analysts of over 23 cents.