Sonos stock falls 18% after quarterly earnings miss estimates

Sonos Inc.'s shares fell more than 18% in the after-hours trading Wednesday after the maker of smart speakers and other audio equipment fell short of expectations for its latest quarter and cut its forecast amid a more challenging macroeconomic environment.

The company generated a third quarter net loss of $600,000 or breakeven on a per-share basis, versus net income of $17.8 million, or 12 cents a share, in the year-prior quarter. Analysts tracked by FactSet were expecting to get 6 cents a share in GAAP earnings.

Sonos SONO earned 19 cents a share, compared with 27 cents in the year-prior period. The FactSet consensus was for 21 cents in adjusted earnings per share.

Revenue fell to $372 million from $379 million and was below $424 million that analysts had been expecting.

The macroeconomic backdrop has become much more challenging for us starting in June as the dollar s appreciation and high inflation have adversely impacted consumer sentiment, particularly in the categories in which we play, Chief Executive Patrick Spence said in a release.

Sonos executives anticipate revenue of $1.73 billion to $1.76 billion for the full fiscal year, less than the previous outlook, which was for $1.95 billion to $2.00 billion.

Apple is the safest player in consumer hardware but it isn't immune to this growing risk. Executives expect to be able to make $215 million to $230 million in adjusted earnings before interest, taxes, depreciation and amortization Ebitda for the full fiscal year. That is also less than the company's previous forecast, which was for $290 million to $310 million.

Spence said in a statement that they expect to weather the current environment while operating from a position of strength. We are profitable, we are debt-free and we have a huge market opportunity. We are very focused on expenses, while investing in a number of products and initiatives in new and existing categories that we believe customers will love and will drive our long-term success. The timeline to achieve the company's previously issued targets of $2.5 billion revenue, 45 - 47% gross margins and 15 - 18% adjusted Ebitda margins is going to be extended beyond FY 2024, according to the company. Sonos also announced that Chief Financial Officer Brittany Bagley is leaving to pursue another professional opportunity and will be replaced by Chief Legal Officer Eddie Lazarus on an interim basis at the beginning of September.

Axon Enterprise Inc. AXON announced in its own release that Bagley would be joining the company as a chief financial officer and chief business officer.

Shares of Sonos have gained 9.5% over the last three months, as the S&P 500 SPX has gone up 5.2%.