Zepp Health Q1 And Outlook Lags Consensus As The Pandemic Interrupts Product Launches; Updates On AI Products

  • Zepp Health Corp ZEPP reported a first-quarter FY23 revenue of $93.95 million, missing the consensus of $122.93 million.
  • The 14.8% decrease in total revenues was mainly due to a 21.2% Y/Y decline in its self-branded product sales, in line with the decline of the consumer electronics market at large and lower consumer discretionary spending.
  • Margin: The gross margin declined by 420 bps to 15.9% due to the price reduction of Xiaomi's pricing policy and the deliberate clearance of its older version of self-branded products to optimize inventory levels.
  • Adjusted loss per ADS of $(0.27) missed the consensus loss of $(0.02).
  • Zepp held $145.8 million in cash and equivalents.
  • Drivers: Total units shipped fell 5.4% Y/Y to 3.5 million. 
  • Wayne Wang Huang, Chairman, and CEO, updated on the launch of an advanced platform that integrates Zepp OS and its unique RISC-V-based chip, application of large language model (LLM), and Generative AI technology to its smart wearables and the incorporation of the latest GPT-4 technology to its Zepp OS.
  • CFO Leon Deng added, "In the first quarter, we experienced a shift in China's Covid-Zero Policy, which interrupted some of our new product launch schedules. As a result, we had to postpone some releases of our new product lines to subsequent quarters, which had a negative impact on our Q1 sales."
  • Outlook: Zepp expects Q2 revenue of $95.00 million - $124.23 million vs. the consensus of $155.7 million.
  • Price Action: ZEPP shares traded lower by 5.2% at $1.27 on the last check Tuesday.
Market News and Data brought to you by Benzinga APIs
Comments
Loading...
Date
ticker
name
Actual EPS
EPS Surprise
Actual Rev
Rev Surprise
Posted In: EarningsEquitiesNewsPenny StocksGuidanceMarketsBriefs
Benzinga simplifies the market for smarter investing

Trade confidently with insights and alerts from analyst ratings, free reports and breaking news that affects the stocks you care about.

Join Now: Free!