Sales at Fitbit Inc., best known for its fitness-tracking wristbands, continued to surge in the latest period, although profit plunged as expenses more than doubled on continued investments in research and marketing.

Shares, down sharply from their $30.40 stock-market debut last year, rose 5.6% to $13.90 in after-hours trading as results beat projections. While the San Francisco company's trackers have proven popular, its stock has stumbled on concerns over the company's long-term outlook.

New products account for the bulk of Fitbit's sales, underscoring the company's pressure to keep up with technical advances and shifting consumer tastes.

In the most-recent period, new products accounted for 54% of sales, while operating expenses more than doubled to $235.3 million as Fitbit continued to invest in research and development and marketing.

Company officials have defended the higher spending, saying the investment has been paying off with higher retention rates over time. In a conference call with analysts to discuss first-quarter results, Chief Executive James Park said 72% of the 18 million users who registered in 2015 remained active users at the end of the year.

Over all, Fitbit reported a profit of $6.3 million, or 3 cents a share after the payout of preferred dividends, compared with $17.7 million, or 7 cents a share, a year earlier. Excluding stock-based compensation, legal expenses and other items, per-share profit fell to 12 cents from 21 cents a year earlier.

Sales surged to $586.5 million from $400.4 million a year earlier, as the company sold 5.7 million fitness-tracking devices, just short of analysts' forecast of 6 million, according to FactSet.

Gross profit margin narrowed to 41.8% from 46.8% a year earlier.

Fitbit, which Tuesday affirmed its financial projections for the year, projected 17 cents to 19 cents in adjusted per-share profit for the current quarter on $490 million to $510 million in sales, compared with analysts' estimate of 17 cents a share in earnings on $498.5 million in sales.

Write to Maria Armental at maria.armental@wsj.com and Georgia Wells at Georgia.Wells@wsj.com

(END) Dow Jones Newswires

August 02, 2016 17:05 ET (21:05 GMT)

Copyright (c) 2016 Dow Jones & Company, Inc.
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