Shares of Sonos plunged by 15% in afterhours trading Monday, which erased a gain during the trading day of 13%, after the company posted earnings for its third quarter of fiscal year 2018.
Sonos posted 45 cents per share loss in earnings while its revenue reached $208.5 million and analysts had been expecting $208 million. Revenue dropped by 6% in comparison to the same period one year ago said the company earnings statement.
CEO Patrick Spence said the main reason that revenue had declined was the audio streaming device Playbase.
Sonos’ largest category, its wireless speakers, increased 1% in sales to reach $93.8 million. However, revenue from its home theater speakers dropped by 20% ending the quarter at $66.7 million. Revenue from its components, which includes Connect: Amp and Connect products, dropped 4% compared to the same period one year ago to $42.3 million.
CEO Spence in a letter wrote that the company was focused on sustainable, profitable growth over the long term.
Spence added in that letter that the company wants to increase its growth in direct sales to customers, rather than using third parties. Direct sales increase points on the profit margin, added Spence.
About 12% of sales at Sonos are currently direct through its website, the company app and the customer relationship program it has since the start of 2018 said Spence.
Sonos released new guidance for its full fiscal year 2018. It expects revenue for that time to be between $1.109 billion and $1.114 billion. Analysts were expecting guidance to be $1.112 billion for revenue for the complete year.
In August, Sonos became a public company and shares have increased by 32% from their opening price of $16.