Fitbit Versa was scooped up by users
In the previous part of this series, we saw that Fitbit (FIT) stock rose after the company announced the launch of Charge 3. Consumer product companies typically need to keep launching new devices to keep customers interested and expand their existing user base.
Earlier this year, Fitbit launched the Versa, which sold out in the second quarter. On June 4, Fitbit announced that it had shipped more than a million Fitbit Versa devices since the product launched on April 16.
During Fitbit’s Q2 earnings release, CEO James Park stated, “The introduction of Versa strengthened our brand relevancy and highlights the opportunity to regain market share as we progress in the smartwatch category and continue to deliver both hardware and software offerings that consumer finds compelling.”
Fitbit device sales declined 20% in Q2
Fitbit sold 2.7 million devices in the second quarter, which was a decline of 20% YoY (year-over-year). Device sales also fell 27% in the first quarter. However, Fitbit believes that robust sales of Versa have improved its positioning with retailers as well as solidified shelf space for the Fitbit brand.
According to Fitbit, the Versa is the counterbalance to the Apple Watch that retailers were looking for. Fitbit also claimed that the Versa outsold combined sales of Samsung (SSNLF), Fossil (FOSL), and Garmin (GRMN) smartwatches in North America in the second quarter.
With the strong customer response for Fitbit’s Versa, demand has outpaced supply. The company has added an additional production line to keep up with demand.
Fitbit hopes that new products launched this year will help drive its incremental sales and will result in revenue and profitability growth.