Premium music speaker maker Sonos late Wednesday beat Wall Street's sales target for the holiday quarter despite being supply constrained, and matched views on earnings. Sonos stock jumped in extended trading.
The Santa Barbara, Calif.-based company earned 87 cents a share on sales of $664.5 million in its fiscal first quarter ended Jan. 1. Analysts had expected Sonos earnings of 87 cents a share on sales of $642 million, according to FactSet. On a year-over-year basis, Sonos earnings dropped 16% as sales increased 3%.
"We believe that we would have sold much more but for chip shortages that constrained our supply, as demand was, and continues to be, strong," Chief Executive Patrick Spence said in a news release.
Sonos also raised the midpoint of its full-year sales guidance to $1.975 billion from $1.963 billion. Its current sales target would translate to year-over-year growth of 15%.
Sonos Stock Jumps Late
In after-hours trading on the stock market today, Sonos stock soared 7.3%, near 28.60. During the regular session Wednesday, Sonos stock climbed 0.2% to close at 26.65.
Sonos stock hit its all-time high of 44.72 in April 2021.
"At a mere 2% market share of the $89 billion global audio market, with a brand that is gaining momentum every day, we believe we are well positioned to seize the future and deliver significant shareholder value over the long term," Spence said.
No Promotions In Holiday Season
Sonos said its gross profit margin ticked up to 47.8% in the holiday quarter. The company benefited from lower promotional activity due to reduced product availability. But those gains were partially offset by higher shipping and logistics costs, primarily airfreight to drive greater product availability.
For the full year, Sonos is targeting a gross margin of 46% to 47%.
"We normally run holiday promotions in Q1 and we didn't run any promotions this quarter," Sonos Chief Financial Officer Brittany Bagley told Investor's Business Daily. "The reason we didn't run any promotions is that we just didn't have the supply availability."
Sonos sees the supply situation improving as the year progresses but doesn't think it will be fully resolved in 2022, Bagley said.
Sonos stock ranks fourth out of 13 stocks in IBD's consumer electronics industry group, according to IBD Stock Checkup. But it has a subpar IBD Composite Rating of 26 out of 99.
IRobot Stock Short-Circuits On Earnings Report
Elsewhere in the consumer electronics space, home-cleaning robot maker iRobot also reported quarterly results after the close Wednesday.
Bedford, Mass.-based iRobot missed its fourth-quarter targets, citing supply-chain problems. It lost an adjusted $1.05 a share on sales of $455.4 million. Wall Street had expected an adjusted loss of 91 cents a share on sales of $470 million in the December quarter. On a year-over-year basis, iRobot sales fell 16%.
Semiconductor chip constraints and shipping delays impacted its ability to fulfill more than $35 million in orders in the fourth quarter, Chief Executive Colin Angle said in a news release.
In 2022, the maker of the Roomba vacuum cleaner expects to earn an adjusted $1.75 a share on sales of $1.8 billion. That's based on the midpoint of its guidance. Those figures would translate to year-over-year growth of 31% in earnings and 15% in revenue. In 2021, iRobot's adjusted earnings dropped 68% while sales rose 9%.
Follow Patrick Seitz on Twitter at @IBD_PSeitz for more stories on consumer technology, software and semiconductor stocks.
