Sonos CEO Eyes Upbeat Holiday Season as Supply Chain Bottlenecks Ease
Sonos, which has been dealing with weak demand for its high-end speakers, is counting on reducing supply chain bottlenecks and a rare set of promotions to boost sales in the holiday quarter, Chief Executive Patrick Spence told Reuters.
The company beat quarterly revenue estimates on Wednesday, holding firm as the retail industry struggles with declining consumer spending caused by decades of inflation.
This trend reflects the strength seen in other luxury goods companies such as LVMH, which focuses on high-income consumers to protect them from economic crises.
Sonos is seeing strong demand for its $349 (approx. Rs. 28,500) entry-level Ray sound bar and $429 (approx. Rs. 35,000) Sub Mini wireless speaker, Spence said.
He added that existing customers accounted for 44 percent of new product registrations in the year to Oct. 1, a sign that brand loyalty is helping Sonos avoid competition from major rivals Apple, Google and Amazon.com – which offer cheap, functional speakers. with a voice. . .
Still, the company added only 1.4 million new homes during that period, compared to 1.8 million a year earlier.
Its growth was curtailed by shortages of chips and product components, exacerbated by China’s strict COVID-19 lockdown. Sonos has also seen some softening in orders from higher levels of the pandemic as consumers spend more time outdoors.
“China is important in terms of our entire supply chain, but we are also in Malaysia and Vietnam. So, we have also rebuilt a strong supply chain,” said Spence.
Sonos is also under pressure from a strong dollar, which is expected to knock $79 million off sales by 2023.
“We understand that the holiday season will be good for us because it is one of the rare times when we sell certain things,” said newly appointed chief financial officer Eddie Lazarus, who has held this position for a while since. September.
© Thomson Reuters 2022