Sonos CEO sees upbeat holiday season as supply snarls ease

Follow us on Google News:
 Sonos CEO sees upbeat holiday season as supply snarls ease
Image source: ©2022 Kalkine Media®

By Eva Mathews

(Reuters) - Sonos Inc, which has been grappling with weak demand for its high-end speakers, is counting on easing supply chain bottlenecks and a rare set of promotions to lift sales in the holiday quarter, Chief Executive Patrick Spence told Reuters.

The company beat quarterly revenue estimates on Wednesday, as it stays resilient even as the broader retail industry struggles with a consumer spending slump caused by decades-high inflation.

The trend mirrors the strength seen at other luxury goods companies such as LVMH, whose focus on higher-income consumers have shielded them from economic gyrations.

Sonos is seeing strong demand for its $349 entry-level sound bar Ray and the wireless loudspeaker Sub Mini priced at $429, Spence said.

He added that existing customers accounted for 44% of new product registrations in the year to Oct. 1, a sign that brand loyalty was helping Sonos fend off competition from bigger rivals Apple Inc, Google and Inc - which offer cheaper, voice-enabled speakers.

Still, the company added only 1.4 million net new households in the period, compared with 1.8 million a year earlier.

Its growth was throttled by a shortage of chips and product components, exacerbated by strict COVID-19 lockdowns in China. Sonos also saw some softness in orders from peak pandemic levels as consumers spent more time outside.

"China is important in terms of our overall supply chain, but we are also in Malaysia and Vietnam. So, we have also recreated a more resilient supply chain," Spence said.

Sonos is also under pressure from a strong dollar, which is expected to shave off $79 million from sales in 2023.

"We have our fingers crossed that the holiday season will be good for us because it's one of those rare times when we do put some things on sale," said newly appointed finance chief Eddie Lazarus, who served in the role on an interim basis since September.

(Reporting by Eva Mathews in Bengaluru; Editing by Shailesh Kuber)


The above content is directly sourced from Reuters under a contractual arrangement. The content is being provided as a convenience and for informational purposes only; and does not constitute an endorsement or approval by Kalkine Media of any of the products, services, or opinions of the organization or individual. The user is apprised that Kalkine Media bears no responsibility for the accuracy, legality, or content of Reuters, any external sites, or for that of subsequent links. The user is requested to contact Reuters directly for answers to questions regarding the content. Please note that Kalkine Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.

Featured Articles