Sonos stock falls as revenue forecast cuts

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Sonos stock falls as revenue forecast cuts

Sonos Inc shares fell 17 per cent on Thursday after the speaker maker cut its full-year revenue forecast, citing a weakness in consumer spending on electronic items ahead of the crucial holiday season.

Americans are spending more money on travel and other leisure-related activities instead of on discretionary items such as TVs and speakers, which is what is killing the electronic industry because of the pandemic.

The changing consumer spending patterns influenced retail partners' outlook, which in turn are taking a cautious approach to their inventory position, Chief Executive Officer Patrick Spence told analysts on Wednesday.

Supply chain issues, which have been a bugbear for the industry for nearly two years now, hurt Sonos' premium offerings, such as its Amp and Beam speakers, while its newly launched speaker Ray was greeted with tepid demand.

Jefferies analyst Brent Thill believes Sonos will be more insulated from macro weakness and that they will face headwinds in the near-term. We were wrong to believe that Sonos would be more insulated from macro weakness, given their exposure to a higher-end consumer.

Sonos cut its annual revenue estimate to a range of $1.73 billion to $1.76 billion from $1.95 billion to $2 billion projected previously, echoing forecast cuts at chip suppliers including Micron Technology and Intel Corp.

Sonos expects inventory levels to improve only after the holiday quarter.

The company said Brittany Bagley is stepping down as chief financial officer and that Chief Legal Officer Eddie Lazarus will take over the role on an interim basis.

The shares of California-based Sonos were trading at $18.96 at the time of the bell.