GoPro declining sales figures see stocks plummet, substantial workforce layoffs
posted Friday, January 15, 2016 at 1:27 PM EDT
Due to less than expected sales and price protection related charges, GoPro has cut its fourth-quarter revenue projection to $435 million USD (according to Bloomberg, expected revenue was $511 million). Projected revenue for 2015 has also been reduced to $1.6 billion overall.
Indicative of their struggles to sell products of late, the GoPro Hero 4 experienced two price cuts since its launch last summer, first from $399 to $299 and then to $199 in December. According to GoPro's financial press release on Wednesday, fourth quarter revenue projections were reduced by $21 million for "price protection related charges resulting from the HERO4 Session repricing in December."
Compared to the record high stock price of $93.85 in October of 2014, GoPro's stock (GPRO) is selling for a mere $11.27/share as of 12:05 PM EST. GoPro's stock has been steadily dropping all day today after opening the morning at $12.32/share. In just the past six months, GoPro's stock prices have dropped over $50/share from their six-month high of $65.49/share. The 77% drop over the past twelve months has not yet steered analysts away from their "bullish" projections for the action camera maker, however.
Within the company's projections for the first quarter of 2016, they've included projected restructuring costs of $5-10 million, which will be mostly severance costs. Their financial struggles have led them to implement a workforce reduction of 7%. With over 1,500 employees, these layoffs will amount to over 100 people losing their jobs at GoPro. In a letter to his employees, CEO Nick Woodman referred to the layoffs as a "difficult and deeply emotional decision. But it was a necessary one."
The full financial results for the fourth quarter and all of the 2015 fiscal year will be available after the market closes on February 3rd.
With the company currently struggling to maintain its once impressive momentum in the market, they may be resting many of their hopes on their upcoming GoPro drone.