It’s a compliment, of sorts, if your company’s share-price falls by 15% after you announce plans to step down. Although we doubt Mike Giannetto will be celebrating: he won’t quit as Sonos’ chief financial officer until later in 2019, so for now, that share-price remains his problem to worry about.
In fairness, the plunge wasn’t just about the CFO’s upcoming departure: analysts were also digesting Sonos’ latest financial results, and a warning that “reduced sell-through velocity toward the end of Q1 FY2019 created higher channel inventory levels than we would have liked”.
Sonos’ revenues grew by 6% year-on-year to $496m in its fiscal Q1 (the final calendar-quarter of 2018), while generating a net profit of $61.7m. Sonos sold just under 2.4m products last quarter, up 4% year-on-year.
The company also hinted at the challenges it’s facing in the smart-speakers market, despite growing adoption of these devices including now in Europe. “However, similar to last year’s trends in the United States where the overwhelming majority of products were priced below $100, product volumes in Europe were skewed heavily to low-priced speakers.”
Amazon’s Echo Dot and Google’s Home Mini may not sound as impressive as a Sonos (or a HomePod) but they make for formidable competitors in the market.