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Sonos stock fell as much as 15 percent in extended hours on Monday, erasing a trading-day gain of 13 percent, after the company reported earnings for the third quarter of its 2018 fiscal year, which ended on June 30.
Here’s how the company did its its first earnings report:
- Earnings: Loss of 45 cents per share.
- Revenue: $208.4 million, vs. $208 million as expected by analysts, according to Thomson Reuters.
Revenue was down 6 percent year over year, according to a statement. The primary reason for the revenue decline was the Playbase audio streaming device one year earlier, CEO Patrick Spence wrote in a letter to shareholders.
Sonos’ biggest category, wireless speakers, did see a gain, rising 1 percent to $93.9 million. But the company’s revenue from home theater speakers declined 20 percent to $66.7 million. Revenue from components, including the Connect and Connect:Amp products, was down 4 percent year over year at $42.28 million.
“We are focused on driving sustainable, profitable growth for the long term,” Spence wrote in the letter.
In the letter Spence said the company wants to accelerate growth of sales directly to customers, as opposed to sales through third parties. Selling directly results in a profit margin “tends to be about 10 points better” that indirect sales, Spence said. About 12 percent of Sonos’ sales is direct — through the Sonos website, the company’s app and its customer relationship management system — since the beginning of the year, he said.
The company also provided guidance for its full 2018 fiscal year. It’s expecting to report $1.109 to $1.114 billion in revenue for that period. Analysts had expected guidance of $1.112 billion in revenue for the full year, according to Thomson Reuters.
Sonos went public last month. Shares are up 32 percent from their initial price of $16.
At the end of the call Spence provided a music recommendation to analysts: the London singer and songwriter Jade Bird.