Wearable fitness device maker Fitbit forecast current-quarter profit below analysts’ estimates as it spends more to promote its Blaze smartwatch and Alta wrist band, sending its shares down 11% in after-hours trading.
The company forecast adjusted profit of eight to 11 cents per share for the second quarter, widely missing analysts’ average estimate of 26 cents, according to Thomson Reuters.
Fitbit has been diversifying its portfolio of colorful wristbands and clippable devices that track calories, sleeping patterns, and heart rate to better compete with rivals as well as to enter new markets and demographies.
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The company’s total operating costs rose to $215 million in the first quarter ended April 2, from $79 million a year earlier. Sales and marketing spending accounted for about half of the total costs.
The company spent more in the quarter to market and promote the newly launched $200 Blaze and the Alta wristband.
Net income attributable to common stockholders fell to $11 million, or five cents per share, from $15.6 million, or 22 cents per share.
Excluding one-time items, Fitbit earned 10 cents per share, breezing past analysts’ average expectation of three cents.
Revenue jumped 50% to $505.4 million, beating the average estimate of $443.1 million.
Fitbit’s shares were down 11.4% at $15.15 in after-market trading.