SONOS(US:SONO) ZACKSยท2024-11-12 12:51Core Viewpoint - Sonos, Inc. (SONO) is expected to report a challenging fourth-quarter fiscal 2024, with anticipated revenue declines and increased losses due to app-related issues and delayed product launches [2][3][5]. Revenue Expectations - For Q4 fiscal 2024, SONO anticipates revenues between $240 million and $260 million, with a consensus estimate of $252.7 million, reflecting a 17.2% decrease from the previous year [2]. - Full-year revenues have been revised downward to a range of $1.503 billion to $1.523 billion from an earlier projection of $1.6 billion to $1.7 billion [5]. Earnings Projections - The consensus estimate for the bottom line is a loss of 22 cents, compared to a loss of 7 cents reported in the prior year [2]. - Adjusted EBITDA loss for Q4 is expected to be between $14 million and $37 million, with full-year adjusted EBITDA anticipated in the range of $93 million to $117 million, down from earlier expectations of $150 million to $180 million [4][6]. Margin Analysis - GAAP gross margin is projected to be between 40% and 42%, down sequentially, while non-GAAP gross margin is expected to be between 45.8% and 46.1% [4][7]. - The company is incurring $20-$30 million in expenses to address app issues and improve customer support, which is expected to impact margin performance [7]. Product Developments - Sonos has launched the Sonos Arc Ultra and Sonos Sub 4, priced at $999 and $799 respectively, which are expected to enhance product offerings and diversify revenue streams [10]. - The company is focusing on the premium over-the-ear headphone market, which is a $5 billion addressable market with double-digit growth annually [8][9]. Customer Trust Initiatives - Following an internal review of its app release, Sonos has made commitments to restore customer trust and improve product quality [11]. - A software update was released to enhance performance and restore previously missing features for users [12].