Sonos Stock Is Spiraling Lower After The Bell: What's Going On?

Sonos Inc SONO shares are tumbling in extended trading Wednesday after the sound systems company reported quarterly results and cut forward guidance below analyst estimates. 

• Q2 Revenue: $304.17 million beat estimates of $297.97 million
• Q2 EPS: 4 cents may not compare to estimates for a loss of 18 cents

Revenues fell 23.9% year-over-year and gross margin decreased 150 basis points to 43.3%. 

"Though our second quarter results were in-line with our guidance, we are reducing our expectations for the second half of Fiscal 2023 due to softening consumer demand and channel partner inventory tightening. As a result, we are taking swift action to reduce our operating expenses and protect our profitability," said Patrick Spence, CEO of Sonos.

Sonos appointed Julius Genachowski as chairperson of the board to succeed current chairperson Mike Volpi, who will transition to a director role. 

Outlook: Sonos cut full-year 2023 revenue from a range of $1.7 billion to $1.8 billion to a range of $1.625 billion to $1.675 billion versus estimates of $1.73 billion.

The company expects full-year adjusted EBITDA to be between $138 million and $168 million, down from a prior outlook of $145 million to $180 million. Gross margin is also expected to be lower than previously anticipated. 

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SONO Price Action: Sonos shares were down 18.7% after hours at $17.20 at the time of writing, per Benzinga Pro.

Photo: courtesy of Sonos.