Sonos Stock Plummets Amid Weak Demand

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  • Sonos reported $372.8M in revenue in Q3, less than the $424.03M consensus.
  • Sonos claims that inflation contributed to the softened revenue during the quarter.
  • Market analysts expected $302.6M adjusted EBITDA on $1.98B in sales.

Sonos (SONO) shares lost 15% after the renowned audio-products producer trimmed its full-year projection for revenue and adjusted EBITDA.

Sonos Misses Analyst Estimates

Though the firm registered 19c EPS during the 2022 financial year’s Q3, which surpassed the analyst estimate of 6c, the revenue of $372 million in that quarter missed the consensus estimate of $424.03 million.

Meanwhile, Sonos blamed inflation for its reduced revenues during the quarter as it pressured consumer sentiment while strengthening the dollar.

Consequently, the audio-products producer reduced its financial year adjusted EBITDA projection from $290 & $310M to 4215 & 4230M. Meanwhile, FY revenue ranges at $1.73 – $1.76 billion, indicating a drop from the previous forecast of $1.95B – $2B.

Monetary experts expected the firm to generate $302.6M adjusted EBITDA amid $1.98B in sales. Patrick Spence, Sonos’ CEO, said they have suffered from the macroeconomic backdrop since June following dollar appreciation and escalated inflation. He added that revenue misted Q3 expectation, and the firm will adjust its FY22 outlook.

Sonos extended timelines of attaining the previous targets of 15-18% adjusted EBITDA, 45-47% gross margins, and $2.5 billion in total revenues beyond 2024. The reason remains evolving & uncertain macroeconomic outlook.

Also, Sonos declared that the firm’s CFO, Brittany Bagley, is resigning from his role to undertake other professional opportunities. Meanwhile, the firm’s CLO, Eddie Lazarus, assumed the interim CFO.

Analyst Comments

Raymond James’ Adam Tindle noted their previous forecast of a wall of worry that the first F2H guide formed and emerged as consumer behavior faded in June. That welcomed disappointing outcomes alongside CFO resignation & ERP change announcement, plus an indefinite FY24 forecast pushout might add fuel to the fire.

What are your views about the company’s operation amidst the present economic outlook? Should we expect more deteriorated data? You can leave a reply in the comment section below.

Stay tuned for upcoming financial news.

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