Following its first earnings report as a public company, shares of Sonos (SONO) fell more than 14% in after-hours trading after it reported that its quarterly revenue was lower than it was at the same time last year.
Sonos, which makes home speakers and high-end sound systems, reported year-over-year growth in total unit sales, selling 886,514 products in the third quarter. That represented an increase of 11.4% and $208.4 million in revenue, roughly in line with analyst projections of $208 million.
Despite selling more units compared to Q3 2017, Sonos' revenue declined by 6.6% in the same period. In the filing, CEO Patrick Spence attributed the lower revenue to "new product launches and/or product mix."
Sonos sells dozens of speakers and other home audio accessories, including the recently introduced Sonos Beam and Sonos One. It's best known as a maker of premium wireless speakers, which retail at anywhere from $150 for the lowest-end speaker to thousands for high-end audio systems. Sonos made its public market debut on Aug. 3 at $15 per share.
On a Monday earnings call, analysts prodded Spence and Sonos CFO Michael Giannetto for more detail on a range of issues, including its growing direct-to-consumer sales segment and what investors should expect for the fourth quarter, which encompasses the holiday season and is typically the strongest sales period for device makers like Sonos.
On the second point, Giannetto said it was too early to call but "you'll be hearing more from us next year."
Another burning question: How Sonos is viewing competition from smart speakers like Amazon (AMZN) Echo, Google (GOOGL) Home and Apple (AAPL) Homepod. The voice-enabled Sonos One, which retails at $200, is the closest competitor in that category. But the Sonos execs didn't go into great detail about what exactly they have planned to evade competitors, saying they didn't want to give away too much publicly.
"We still feel we have a huge opportunity in the home," Spence said, saying that the home was "job one" but that Sonos is exploring new opportunities in the outdoor audio and personal device segments.
Investors didn't appear too convinced by its inaugural earnings report, with shares falling as much as 14% in late trade on Monday.
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