Despite shares residing in deep negative territory so far in 2017, Fitbit (NYSE:$FIT) shares jumped 17% in the past month.
Fitbit’s August bounce was undeniably sparked by an encouraging second-quarter earnings report released early in the month. In that, Fitbit sold 3.4 million units of devices, which was a 14% improvement to the quarter prior.
CEO James Park indicated: “Consumer demand in the second quarter was better than anticipated, enabling Fitbit to reduce channel inventory and generate better sales.”
Further, Fitbit relished an uptick in gross profit margins as its average selling prices rose by @% to just over $100/ device.
Going forward, the technology company looks to reverse its plundering contraction within the overall past year. Specifically, sales decreased by 40% year over year in the second quarter, and the company’s 3.4 million device sales still look weak when compared to the prior year’s 5.7 million. What’s more hurting is that the company generated $54 million less in revenue over the last 6 months.
It is predicted that Fitbit will ride the better-than-expected momentum from August to meet its full-year growth target of revenue between $2.5 billion and $2.6 billion. Management will see expected adjusted earnings of $430 million to $490 million. Hitting those figures will ensure that the company is ready to compete against Apple Inc’s (NASDAQ:$APPL) release of its new Apple Watch at the September 12th event.
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