Count Sonos among the companies struggling to keep up with demand: Executives of the smart speaker maker revealed during an earnings call Wednesday that they expect the company's revenue to go down this holiday quarter because of ongoing supply chain issues.
"The global supply situation has only continued to get more challenging," Sonos CFO Brittany Bagley told investors Wednesday. "As a result, we are anticipating that our [holiday] quarter revenue could be lower than … last year." Shortages have led to some significant disruptions for the company. "We have been so short on some components that we have had manufacturing shutdowns," Bagley said.
CEO Patrick Spence tried to put a positive spin on the situation, though. "We are confident that we can sell every unit that we can make this year," he said.
Whether those speakers will reach consumers in time for the holidays is another question altogether. The company's website currently lists a number of products as backordered. The $400 Sonos Move speaker is said to ship on Dec. 17, whereas the $900 Arc soundbar may not ship before the end of the year. On the flip side, some of the company's entry-level speakers appear to be more readily available than just a few months ago.
Both Spence and Bagley stressed that availability issues haven't led to people abandoning the brand. "Our customers have proven that they will wait for our products despite supply constraints," Bagley said. Part of that is because Sonos keeps selling additional speakers to existing customers, who are less likely to switch to competing products. The average number of devices owned per Sonos household went from 2.9 to 3 this past 12 months.
Sonos ended the most recent quarter with devices in 12.6 million homes, and Spence said that the company's goal was to grow that footprint to tens of millions of additional homes over time. However, don't expect it to spend a lot of money on this kind of growth in the short term: Due to the ongoing shortages, Sonos is cutting down on sales and other marketing efforts this quarter.
"Because of the supply constraints, we won't be running typical promotional environments," Bagley said.
Following the investor call, a spokesperson told Protocol that the company wouldn't end all promotional activity. "This holiday season, Sonos will be running limited promotions on a market-to-market basis," the spokesperson said. However, the odds of finding a great Black Friday deal for Sonos speakers may just have gone down significantly.
Executives said Wednesday that they have been trying to mitigate supply chain issues with a number of measures, including shifting shipping for some products to airfreight, and switching to more-readily available components. The company had already relocated some of its production out of China in response to the Trump administration's trade war with the country. As a result, executives expect to have products more readily available later in 2022. "It will improve as we progress through the year," Spence said.
All those issues notwithstanding, Sonos still managed to end its fiscal 2022 on a high note. The company's revenue for the 12 months ending Oct. 2 came in at $1.7 billion, 29% above the prior year's results. Net income for the year was $158.6 million, compared to a net loss of $20.1 million in fiscal 2020.
