The importance of maintaining market position
As Fitbit (FIT) continues its rapid rate of growth, it’s becoming clear that consumers all over the world are focusing on improving their health and well-being. This is one of the most important drivers for Fitbit’s sustained long-term growth.
Fitbit is looking to accelerate the network effect of its user community, making it difficult for competitive players such as Apple (AAPL), Garmin (GRMN), and Samsung (SSNLF) to achieve critical mass.
In the United States (SPY), Fitbit’s biggest focus is on the significant expansion of its shelf space. Fitbit expects the top four US retailers to increase the linear footage of its displays by more than 50%. This is to accommodate leading products such as Blaze, Alta, and related accessories.
2Q16 and 2016 results
In 2Q16, Fitbit stated that it will look to maintain its investment in brand building by supporting the penetration of Blaze and Alta into the market while investing more in international market development. It said it also aims to “frontload engineering costs to support future product introductions.”
In 2016, Fitbit expects revenues of $2.5 billion–$2.6 billion, with a non-GAAP (generally accepted accounting principles) gross margin of 48.5%–49%.
In 2Q16, Fitbit expects revenues to be $565 million–$585 million, with a non-GAAP gross margin of 48%. Analysts expect revenues of ~$2.6 billion in 2016 and $574 million in 2Q16.