Sonos whose products were once considered a must have is struggling with local Asia Pacific revenues of which Australia is the largest market falling from US$130.189 million between October 2022 and September 2023 to just $88M.
In their last quarter Asia Pacific sales fell even further from $25.1 to just $18.2 million as consumers realised that Sonos sound is not necessarily premium sound anymore.
At CES 2024, several people commented that they doubted that Sonos’s recent announcement about the pending release of new headphones will help the struggling US sound Company, claiming they are “Coming too late into the headphone market” and “The Sonos brand is losing its appeal”.
During the last US fourth quarter Sonos revenues decreased 5.5% year-over-year to US$1,655.3 million. Gross margin decreased 220 basis points year-over-year to 43.3%. they also reported a net loss of $10.3 million compared to net income of $67.4 million last year.
The business whose shares fell on the news and have fallen 7.5% this month now only has free cash flow of $50.1 million.
In other concerning news their stock inventories came in at $346.5 million, an of 16.2% from last quarter with stock failing to sell through in markets such as Australia.
The business was also carrying more finished goods totalling $281.6 million, an increase of 17.3% from the last quarter.
Sonos CEO Patrick Spence said “As we enter Fiscal 2024, we are laser focused on execution and positioning our business to return to top and bottom-line growth when conditions improve. While current market conditions remain challenging, this is the beginning of a multi-year product cycle where we expect to reap the rewards of our R&D investments”.
Analysts at CES 2024 claim that it’s going to be hard for all audio Companies including The Premium Audio Company, the former Sound United and Sonos to grow revenues in 2024 as consumers cut back spending due to inflation concerns.
Spence claimed “This cycle begins with our entry into a new multi-billion-dollar category in the second half of the year that will complement our current offering, delight customers and drive immediate revenue. We are so excited about what we have to share with the world in Fiscal 2024 and beyond.”
Back in 2021 Spence bragged that Sonos would achieve annual sales of $2.25 billion in fiscal year 2024, the Companies latest results are way off that goal while also going backwards.
