Sonos shares hit a low note on revenue forecast cut
Sonos Inc shares tumbled about 17% on Thursday after the speaker maker cut its full-year revenue forecast, citing a weakness in consumer spending on electronic items ahead of the crucial holiday season.
Americans are spending money saved during the pandemic more on travel and other leisure-related activities rather than on discretionary items such as TVs and speakers, roiling the electronic industry.
“Changing consumer spending patterns influenced our retail partners’ outlook who in turn are taking a cautious approach to their inventory position,” Chief Executive Officer Patrick Spence told analysts on Wednesday.
Supply chain issues, which has been a bugbear of the industry for nearly two years now, continued to hurt Sonos’ premium offerings such as its Amp and Beam speakers, while its newly launched speaker Ray was greeted with tepid demand.
“We were wrong to believe Sonos would be more insulated from macro weakness given their exposure to a higher-end consumer, and expect they will continue to face headwinds in the near-term,” Jefferies analyst Brent Thill said.
Sonos cut its annual revenue estimate to a range of $1.73 billion to $1.76 billion from $1.95 billion to $2 billion projected previously, echoing forecast cuts at chip suppliers including Micron Technology and Intel Corp.
Sonos now expects inventory levels to improve only after the holiday quarter.
The company also said Brittany Bagley is stepping down as chief financial officer and that Chief Legal Officer Eddie Lazarus will take over the role on an interim basis.
Shares of California-based Sonos were trading at $18.96 in trading before the bell. (Reporting by Chavi Mehta and Nivedita Balu in Bengaluru; Editing by Anil D’Silva)
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