Home > Sound > Compact Speakers > Sonos Tanks, Revenues Down 7%, Profits 86% Shares Dive 17%

Sonos Tanks, Revenues Down 7%, Profits 86% Shares Dive 17%

As tipped by ChannelNews US networked sound Company Sonos has delivered a shocker result, as their share value tumbles 17% after a 7% a revenue drop and a wider-than-expected loss.

In Australia the revenue fall is tipped to be double digit with Sonos blaming the revenue drop on increased sales of cheaper products including the Sonos One smart speaker.

The US Company is also facing new competition from Bose and Harman Kardon two Companies who have delivered superior networked audio products in the last month.

Sonos was also deprived of a lift in their share value after delivering their first ever result following their IPO last month.

Net losses widened by 86 per cent to US$27.0M for its fiscal third quarter, ending in June, with a loss of 45 cents a share.

The Company that is looking for full-year revenues of around $1.11bn are facing stiff new competition and since this year end prediction was made both Bose and Harman Kardon have announced superior competing sound systems that retailers are tipped to promote ahead of the Sonos offering.

One major Australian retailer said “The reason we are still ranging Sonos is because it generates foot traffic. We are using the brand to drive sales into other products”.

In a letter to shareholders, Sonos urged investors to look past quarterly fluctuations in its sales to focus on its annual performance.

“We are focused on driving sustainable, profitable growth for the long-term,” Sonos said.

“Given the nature of our business and the impact of seasonality and new product launches, we measure our financial progress on an annual basis, not a quarterly basis,” it added, offering targets of 10 per cent compound annual revenue growth and 20 per cent compound annual increase in earnings before interest, taxation, depreciation and amortisation.

“We may not achieve these targets every fiscal year, but it is our long-term goal to do so,” Sonos added.

Investors, who have been burnt in the past by the volatility of other consumer electronics companies’ quarterly sales, did not seem reassured by that pledge and started to dump Sonos stock which was down immediatly 4.36% in trading following the poor result.

The stock then fell by as much as 13 per cent following the release of the results to around $18.60.

Sonos priced its IPO at $15 in August before closing at $19.91 after its first day of trading.

Sonos also said on Monday that feedback from customers, retailers and reviewers for the new Beam soundbar was “in line with our expectations thus far”.

The Company is set to launch an upgraded Amp, which allows traditional hi-fi systems to connect to a Sonos wireless network.

Sonos claim this is a key pillar of the company’s growth strategy despite most people now opting for a Wi Fi or Bluetooth connection over the proprietary Sonos network which is known to often drop out.

You may also like
Google’s Pixel, Home, Chromecast All Infringe On Sonos Patent, Court Finds
EXCLUSIVE: Sonos OZ Reports Poor Profits As They Scope New Distributor
Sonos Whinges About Apple, Google & Amazon To Senate Hearing
Sonos Stock Down -20.92% As Apple Deal Fails To Emerge
Sonos APAC Q3 Sales Slump 45.6%, Losses Climb To $79M