Snap wrote off nearly $40 million because Spectacles are a flop
- Snapchat spent $40 million in the last quarter in charges related to unsold Spectacles and retailer cancellations.
- Spectacles never caught on, with under half of users continuing to use the camera glasses after a month.
Snap, the parent company of Snapchat, said on Tuesday that it spent nearly $40 million in the last quarter on unsold Spectacles, its camera glasses.
"Unfortunately, we misjudged strong early demand for Spectacles and purchased more inventory than we now anticipate being able to sell. As a result, we recorded a $39.9 million non-recurring expense primarily related to excess inventory and purchase commitment cancellations," Snap CFO Drew Vollero said in Snap's prepared remarks for its quarterly earnings. "Moving forward, we will continue to be in the market place with Spectacles and expect modest revenue from the product line."
Snap launched Spectacles last December to a lot of hype, partially sparked by limited supply and long lines for the $130 gadget, which was sold through yellow vending machines at first.
But Spectacles never caught on. Snap only sold 150,000 pairs in its first year, and Snap internal data showed that under half of Spectacles owners kept using the glasses after a month, Business Insider previously reported.
Snap reported third-quarter earnings on Tuesday. The stock dropped over 15% in after-hours trading.