Why Is iRobot (IRBT) Down 8.5% Since Last Earnings Report?

Core Viewpoint - iRobot reported a narrower-than-expected net loss in Q1 2024, but revenue declined year-over-year, raising questions about future performance and market trends [2][3][7]. Financial Performance - iRobot's Q1 2024 adjusted loss was $1.53 per share, better than the expected loss of $2.03 and an improvement from a loss of $1.67 in the same quarter last year [2]. - Revenue for the quarter was $150 million, exceeding the Zacks Consensus Estimate of $139 million, but down 6.4% year-over-year due to lower sales across all product categories [3]. - Premium and mid-tier robots accounted for 81% of total robot revenues, a decrease from 88% in the previous year [3]. Sales and Product Performance - Total product units shipped were 456 thousand, reflecting a year-over-year increase of 4.6%, while average selling prices decreased by 13.9% [3]. - Revenue from solo and other products was $94 million, down 30.4% year-over-year, with units shipped declining by 28.4% [3]. - Revenue from 2-in-1 products increased by 124% year-over-year to $56 million, with units shipped rising from 63 thousand to 189 thousand [3]. Regional Revenue Breakdown - Domestic operations contributed 45.9% of revenues, totaling $68.9 million, a 4.3% decline year-over-year [4]. - International revenues decreased by 8.2% year-over-year to $81.1 million [4]. Margin Analysis - Cost of revenues decreased by 7.8% year-over-year to $113.9 million, while adjusted gross profit was $36.9 million, down 2.6% year-over-year [5]. - Adjusted gross margin expanded by 90 basis points to 24.6% [5]. - Research and development expenses were $33.9 million, down 17.9% year-over-year, and selling and marketing expenses fell by 30.1% to $29.7 million [5]. Balance Sheet and Cash Flow - As of the end of Q1 2024, iRobot had cash and cash equivalents of $118.4 million, down from $185.1 million at the end of Q4 2023 [6]. - The company generated net cash of $1.44 billion from operating activities, a significant increase from a net cash outflow of $94.5 million in the prior-year period [6]. Future Outlook - For Q2 2024, iRobot expects net sales between $167 million and $172 million, down from $237 million in the same quarter last year [7]. - The company projects an adjusted loss per share in the range of $1.74 to $1.81, higher than the adjusted loss of $1.42 in the previous year [7]. - For the full year 2024, net sales are forecasted to be between $815 million and $860 million, a decrease from $891 million in 2023 [7]. Market Sentiment - Estimates for iRobot have trended upward recently, indicating a potential for improved performance [8][10]. - The stock currently holds a Zacks Rank 2 (Buy), suggesting expectations for above-average returns in the coming months [10].