GoPro to drop prices on cameras after earnings miss, revenue decline

By Jeremy C. Owens

GoPro CEO says 'we're stoked' to return to prepandemic prices, after announcing a sales decline of nearly 20% in the first quarter

GoPro Inc. is reducing prices that were raised earlier in the COVID-19 pandemic, after the action-camera company announced that revenue declined nearly 20% in the first three months of the year.

GoPro (GPRO) announced that it will return to prepandemic pricing structures on its lineup of cameras, slicing $50 to $100 off most models. For example, the company's flagship Hero11 Black camera will now sell for $399.99 instead of $499.99. GoPro also said that discounts on products that it had offered subscribers will go away; subscription prices were dropped to $24.99 for the first year, with subsequent years staying the same at $49.99.

"Pandemic-related challenges forced us to raise prices, but now those pressures have eased and we're stoked to make the insane performance of today's GoPro more accessible for everyone," Chief Executive Nicholas Woodman said in a statement.

In addition to dropping prices, GoPro executives are also looking to return to retail stores after focusing on direct-to-consumer sales during the pandemic.

"We did a great job adjusting our go-to-market strategy for the pandemic," Woodman said in a conference call. "But ironically, that same go-to-market strategy that worked so well when consumers weren't going to stores and stores were closed and people were shopping online more -- that strategy that allowed us to thrive during that period -- has been holding us back in this postpandemic world, where people are spending a lot more time and a lot more money in retail, they're shopping in stores as a form of entertainment."

The news was announced after GoPro revealed that it was unprofitable in the first quarter, its first quarter with a loss in two years, and revenue declined nearly 20%. The company reported a loss of $29.9 million, or 19 cents a share, on sales of $174.7 million, down from $216.7 million a year ago. After adjusting for stock compensation and other effects, GoPro reported a loss of 18 cents a share, after producing adjusted earnings of 9 cents a share in the same quarter a year ago.

Analysts on average were expecting an adjusted loss of 11 cents a share on sales of $165 million, according to FactSet, after GoPro executives surprised Wall Street by guiding for a loss three months ago.

For the second quarter, executives expect another loss and revenue decline. GoPro executives guided for an adjusted loss of 5 cents to 9 cents a share on sales of $215 million to $225 million, after posted adjusted earnings of 8 cents a share on sales of $251 million in the second quarter last year. Analysts were expecting a break-even quarter on an adjusted basis with sales of $216.6 million, according to FactSet.

GoPro shares fell about 6% in after-hours trading. The stock has declined 11.7% so far this year, as the S&P 500 index has gained 7.3%.

-Jeremy C. Owens

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05-10-23 0747ET

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