CEO says customers are upgrading from ‘lower-cost pucks’
Shares of Sonos Inc. fell in after-hours trading Wednesday after the company posted better-than-expected quarter results but announced the retirement of its chief financial officer.
CFO Michael Giannetto informed the company at the start of the month that he planned to leave his position, the company said in a Wednesday filing. He will continue to serve in the role until Sonos SONO, -6.07% hires a replacement.
The stock was down more than 16% in after-hours trading.
The announcement came as the company posted quarterly results that exceeded the consensus view. The maker of home speakers reported fiscal first-quarter net income of $61.7 million, or 55 cents a share, compared with $45.7 million, or 36 cents a share, a year earlier. Analysts surveyed by FactSet had been expecting 40 cents in GAAP earnings per share for Sonos.
Revenue rose to $496 million from $469 million a year earlier, whereas the FactSet consensus called for $490.7 million. Sonos said in its release that its newly launched Beam product was a “big growth driver” during the holiday season. The December period is historically Sonos’ largest in terms of revenue.
Shares were down nearly 5% in after-hours trading.
For the current fiscal year ahead, Sonos expects revenue of $1.25 billion to $1.275 billion. Analysts had been modeling 2019 revenue of $1.261 billion.
Sonos is trying to gain a stronger presence in Europe, and the company said it saw early successes there during the quarter. Voice adoption in Europe is lagging a year or two behind the U.S., according to the company.
“People have gotten a taste of smart speakers from the lower cost pucks and now want to upgrade to a premium sound experience,” Chief Executive Patrick Spence told MarketWatch in an email. “This is happening first in the United States, and [we] expect it to begin to play out in Europe over the next two years as well.”
Spence said that he believes the company benefitted overall from upgrades to higher-quality sound products in this latest quarter. He’s optimistic about the company’s new partnership with housewares retailer Ikea, which he expects to add “new form factors, new countries and new price points.”
Shares have fallen 6.7% over the past three months, while the S&P 500 SPX, -0.22% has dropped 0.8% in the same time span.