Unlike in past pandemic-impacted holiday quarters, Sonos Inc. had enough product in stock that it was able to run promotions, and that helped propel the company to revenue growth.
Sonos SONO posted $672.6 million in revenue for the first quarter, up from $664.5 million a year ago and ahead of the $594.3 million analysts had been anticipating, according to Sonos SONO.
Chief Financial Officer Eddie Lazarus told MarketWatch that we hadn't been in stock for three years and hadn't been able to promote. Over the holiday period, we gained a lot of share, especially in the home theater. Wall Street seemed to like the sound of Sonos' results, with shares up more than 15% in aftermarket action.
Sonos had net income of $75.2 million, or 57 cents a share, compared to $123.5 million, or 87 cents a share, in the year-earlier quarter. The FactSet consensus was for 38 cents a share in GAAP earnings.
The gross margins fell to 42.4%, from 47.8% a year ago, though Lazarus said Sonos was able to stay on track in terms of gross margins and things we need to do to see our year through even while running promotions.
The company posted adjusted earnings before interest, taxes, depreciation and amortization-Ebitda of $123.9 million, down from $163.1 million a year ago, while analysts projected $84 million.
In the first quarter, there is no spiking the football, Lazarus said.
Despite beatings across the board, Sonos has maintained its fiscal outlook for 2023, which calls for revenue of $1.7 billion to $1.8 billion, along with adjusted Ebitda of $145 million to $180 million.
We look to the balance of the first half against the second half, and we are right on plan, Lazarus said. We are sticking to our guidance because it is so early in the year and there is so much uncertainty. He said Sonos executives don't know which way consumers are going to go in the U.S. and Europe. Lazarus said that Sonos is prudently investing in the business so that we can come out of this time of economic uncertainty and that the company intends to modestly grow its headcount and research and development investment this year.
Lazarus said Sonos is prepared to trim back on things if conditions fall off track.