GoPro CEO: There was no ‘boogeyman’ this holiday quarter
For the first time in years, GoPro Inc. came to CES without a cloud of layoffs, product-line exits or holiday-season woes.
GoPro GPRO, +2.04% has a history of flubbing its December quarter and having to answer for it at the annual technology conference, but this year the company put on a drama-free show.
“The boogeyman a lot of people were worried would blow up our fourth quarter didn’t happen,” Chief Executive Nick Woodman told MarketWatch. “No news is good news for GoPro at CES.”
Shares of the action-camera company experienced their worst day on record back in November, after GoPro reported third-quarter results and warned that it would ramp up promotions for its cheaper Hero7 White and Hero7 Silver devices headed into the holidays. Woodman told MarketWatch at the show that investors overreacted to that commentary.
“A few million more in promotions is totally in line with what you’d expect a leading consumer brand to do,” Woodman said, after the company received feedback from retailers indicating that the holiday season was going to be generally promotional. He cited “outsize demand” for the flagship Hero7 Black and said he was “happy” with the performance of the White and Silver cameras.
The Hero7 Black prompted a higher percentage of device upgrades relative to previous-generation models, according to Woodman.
Though things appear to be running more smoothly with the action-camera company, shares have taken a beating since the company’s 2014 initial public offering. The stock is down nearly 80% from its IPO price of $ 24.
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GoPro has learned a few lessons from its recent stumbles, Woodman said. The company is committed to refreshing its camera line on an annual basis, and executives have found that the $ 199, $ 299 and $ 399 price points work.
“This year we’re selling at price points where we’re designed to return a profitable margin,” he said, and GoPro is aiming for full-year profitability in 2019. Once the company has achieved “stable growth and profitability” with its current three-camera strategy, it will branch into new products, according to Woodman.
Though GoPro’s products aren’t included in the current wave of tariffs, Woodman said that the “threat of tariffs” has prompted the company to shift production for U.S.-bound cameras out of China. He declined to give specifics about where the new production hub would be but said the move is expected to take place in the first half of the year. The company plans to keep Chinese production for cameras that will be sold outside the U.S.
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Woodman declined to comment on the possibility that the company could get acquired, a topic that’s been up for debate in the investment community with the steep decline in GoPro’s share price. He said that the company’s financial performance over its three reported quarters in 2018 as well as its product strategy “put GoPro in a position to succeed as a stand-alone company.”
GoPro shares have dropped 19.9% over the past year, while the S&P 500 SPX, -0.01% has declined 6.8%.