GoPro Inc.’s first-quarter 2016 sales were cut in half, but exceeded guidance as the wearable action camera brand looks for a rebound with new products.
Quarterly sales, ended March 31, 2016, came in at $185.5 million, versus $363.1 million during the same period a year ago.
Gross margins fell 1,260 basis points to 32.5 percent, versus 45.1 percent a year ago. The company reported a first-quarter net loss of $107.5 million, or a loss of 78 cents per diluted share, versus a profit of $16.8 million, or 11 cents per share, a year ago.
“Consumer demand for GoPro remains solid,” said Nicholas Woodman, GoPro founder and CEO. “Unit sell-thru was close to first quarter 2015 levels, a quarter which benefited from the launch of HERO4. Revenue exceeded our guide and, importantly, unit sell-thru rates were approximately 50 percent higher than sell-in which drove global inventory levels down. And while we had to make the difficult decision to delay our drone, Karma, the upside is that Karma’s launch should now benefit from the holidays.”
GoPro’s inventory fell by 25.7 percent to $139.7 million at the end of its first quarter versus a year ago.
First quarter non-GAAP gross margin was impacted by charges of approximately $8 million related to legacy products for excess purchase commitments, inventory write-downs and marketing development funds. The charges were due to lower sales estimates for end-of-life HERO products. “GoPro has no further financial exposure remaining from purchase commitments and inventory related to our end-of-life HERO camera line,” officials said. Excluding the charge, non-GAAP gross margin would have been 36.8%.
International sales totaled more than 50 percent of total GoPro revenue for the first quarter and China remained a top ten market.
Looking ahead, GoPro officials maintained its full-year guidance in the range of $1.35 billion to $1.5 billion.