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Sonos (SONO) Cuts Workforce to Optimize its Cost Structure
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Sonos (SONO - Free Report) has announced plans to streamline its operations by reducing its workforce by approximately 7%. The company will adhere to local laws and consultation requirements specific to certain countries when making decisions about eliminating positions.
Additionally, the company is committed to reducing its real estate footprint and re-evaluating certain program expenses. These strategic actions are made to optimize its cost structure while continuing to invest in its product roadmap to drive future growth.
As a result of these initiatives, Sonos estimates that it will face restructuring and related charges of approximately $11 to $14 million. The majority of these charges, approximately $9 to $11 million, will be attributed to severance packages and employee benefits. The company anticipates that most of these restructuring costs will be incurred during the third quarter of fiscal 2023.
Sonos operates as a consumer electronics company primarily involved in manufacturing smart speakers with immersive sound experiences. The company leverages evolving consumer technology and entertainment trends to be at par with the audio consumption patterns of customers, primarily characterized by the fast-tracked adoption of voice assistants and streaming services.
For fiscal 2023, the company has reduced its revenue guidance owing to softening consumer demand and inventory tightening by channel partners. The company expects revenues to be in the range of $1.625-$1.675 billion compared with the previous guidance of $1.7-$1.8 billion. On a constant-currency basis, revenues are anticipated to decline 2-5% (earlier view: increase in the range of 1-7%).
In the second quarter, quarterly revenues decreased 23.9% (down 22.4% on a constant-currency basis or cc) year over year to $304.2 million due to weak consumer demand. A tougher year-over-year comparison owing to backlog fulfillment and timing of channel fill in the prior-year quarter added to the woes. Unfavorable foreign exchange movements affected sales by $6 million.
Sonos currently carries a Zacks Rank #3 (Hold). Shares of the company have lost 15.4% against the sub-industry’s growth of 17% in the past year.
The Zacks Consensus Estimate for Dropbox’s 2023 earnings has increased 10.1% in the past 60 days to $1.85 per share. The long-term earnings growth rate is anticipated to be 12.3%.
Dropbox’s earnings beat the Zacks Consensus Estimate in the last four quarters, the average being 10.4%. Shares of DBX have gained 16% in the past year.
The Zacks Consensus Estimate for Badger Meter’s 2023 earnings has increased 4.7% in the past 60 days to $2.69 per share.
Badger Meter’s earnings beat the Zacks Consensus Estimate in all the last four quarters, the average being 5.3%. Shares of BMI have surged 102.9% in the past year.
The Zacks Consensus Estimate for Blackbaud’s 2023 earnings has increased 9.3% in the past 60 days to $3.75 per share.
Blackbaud’s earnings beat the Zacks Consensus Estimate in the last four quarters, the average surprise being 10.4%. Shares of the company have jumped 31.1% in the past year.
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Sonos (SONO) Cuts Workforce to Optimize its Cost Structure
Sonos (SONO - Free Report) has announced plans to streamline its operations by reducing its workforce by approximately 7%. The company will adhere to local laws and consultation requirements specific to certain countries when making decisions about eliminating positions.
Additionally, the company is committed to reducing its real estate footprint and re-evaluating certain program expenses. These strategic actions are made to optimize its cost structure while continuing to invest in its product roadmap to drive future growth.
As a result of these initiatives, Sonos estimates that it will face restructuring and related charges of approximately $11 to $14 million. The majority of these charges, approximately $9 to $11 million, will be attributed to severance packages and employee benefits. The company anticipates that most of these restructuring costs will be incurred during the third quarter of fiscal 2023.
Sonos, Inc. Price and Consensus
Sonos, Inc. price-consensus-chart | Sonos, Inc. Quote
Sonos operates as a consumer electronics company primarily involved in manufacturing smart speakers with immersive sound experiences. The company leverages evolving consumer technology and entertainment trends to be at par with the audio consumption patterns of customers, primarily characterized by the fast-tracked adoption of voice assistants and streaming services.
For fiscal 2023, the company has reduced its revenue guidance owing to softening consumer demand and inventory tightening by channel partners. The company expects revenues to be in the range of $1.625-$1.675 billion compared with the previous guidance of $1.7-$1.8 billion. On a constant-currency basis, revenues are anticipated to decline 2-5% (earlier view: increase in the range of 1-7%).
In the second quarter, quarterly revenues decreased 23.9% (down 22.4% on a constant-currency basis or cc) year over year to $304.2 million due to weak consumer demand. A tougher year-over-year comparison owing to backlog fulfillment and timing of channel fill in the prior-year quarter added to the woes. Unfavorable foreign exchange movements affected sales by $6 million.
Sonos currently carries a Zacks Rank #3 (Hold). Shares of the company have lost 15.4% against the sub-industry’s growth of 17% in the past year.
Image Source: Zacks Investment Research
Stocks to Consider
Some better-ranked stocks in the broader technology space are Dropbox (DBX - Free Report) , Badger Meter (BMI - Free Report) and Blackbaud (BLKB - Free Report) . Each of these companies presently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Dropbox’s 2023 earnings has increased 10.1% in the past 60 days to $1.85 per share. The long-term earnings growth rate is anticipated to be 12.3%.
Dropbox’s earnings beat the Zacks Consensus Estimate in the last four quarters, the average being 10.4%. Shares of DBX have gained 16% in the past year.
The Zacks Consensus Estimate for Badger Meter’s 2023 earnings has increased 4.7% in the past 60 days to $2.69 per share.
Badger Meter’s earnings beat the Zacks Consensus Estimate in all the last four quarters, the average being 5.3%. Shares of BMI have surged 102.9% in the past year.
The Zacks Consensus Estimate for Blackbaud’s 2023 earnings has increased 9.3% in the past 60 days to $3.75 per share.
Blackbaud’s earnings beat the Zacks Consensus Estimate in the last four quarters, the average surprise being 10.4%. Shares of the company have jumped 31.1% in the past year.