Strategy in TECH...
Sonos, Inc. (Nasdaq: SONO) announced today that director Mike Volpi is stepping down from the Sonos Board of Directors. No reason was given for why Volpi was leaving. The company announced that Hugo Barra will replace Volpi on the board.
Recent developments and reporting within the last week seem to suggest that Sonos, Inc. (Nasdaq: SONO) is adrift and directionless as its new Interim CEO tries to right the ship. It has even canceled its next big product introduction. Is the company flailing? Or is it finally getting its act together?
Pomerantz Law has announced it is launching an investigation of Sonos, Inc (Nasdaq: SONO) on behalf of investors. The firm says that this action is being taken to investigate claims surrounding the company’s handling of its 2024 app disaster and whether certain Sonos officers and/or directors “have engaged in securities fraud or other unlawful business practices.”
On Monday, Sonos, Inc. (Nasdaq: SONO), in a filing with the Securities and Exchange Commission (SEC), revealed that Deirdre Findlay, Sonos Chief Commercial Officer, had resigned from her position with the company on February 19, 2025. This is yet another top executive, in this case, a top marketing position, to leave the company.
Sonos announced the financial results for its first quarter of Fiscal 2025, the 90-day period that ended on December 28, 2024. It was sobering news – Revenues declined over 10%, Operating Income collapsed almost 40%(!), and Net Income slid 38%. These poor results show that Sonos is starting out 2025, not as bad as 2024…it’s starting out worse.
Yet some outlets on Wall Street reported Sonos results were “better than expected.” With these numbers, how is that possible? Read on…
Sonos has announced that it is launching yet another reorganization (it had one in 2024, and another one before that in 2023) with a “reduction in force” this time impacting 12% of its entire workforce. It seems remarkable that at a time when it continues to struggle to extricate itself from the La Brea tar pits it fell into via 2024’s app disaster, one of its first solutions is to let people go. More than 1 out of every 10 employees has been terminated to “…improve the Company’s operating model and cost structure to set the Company up for long-term success.”
In a move I have been anticipating for weeks, the Sonos Board has finally made a move and dismissed Patrick Spence as CEO as of this morning, Monday, January 13, 2025. The company has named a member of the Board – Tom Conrad – as an interim CEO, while a search has been launched for its next CEO.
Sonos, Inc. (Nasdaq: SONO) Chief Executive Officer Patrick Spence did his best to sound upbeat and exuberant recently as he discussed the company’s results for its fourth quarter (4Q) and full year of Fiscal 2024 on an earnings call with financial analysts. Although most expected poor results in the wake of recent challenges, the numbers were particularly rough as the company is struggling against market headwinds in the audio segment, a less-than-satisfying rollout of what it had hoped would be a blockbuster new product in a blockbuster new category (Ace headphones), and most vexingly, from its own self-inflicted wound with a horribly botched app rollout.
Spence faced a tough sell to analysts, even with reduced expectations, as the numbers were quite disappointing.
While Sonos (Nasdaq: SONO) claims to have most of its app problems behind it, multiple reports are emerging that suggest it may have an even bigger problem – the introduction of its Ace premium headphone has flopped. If these reports are true, then Sonos may indeed be staring into the jaws of the one monster that can truly terrify it – growing consumer resistance to its new products.
Sonos (Nasdaq: SONO) announced this week that it was issuing new quality and customer experience “commitments,” as it seeks to rebuild its deteriorating reputation in the wake of a disastrous app launch earlier this year that has caused many, if not most, Sonos systems to stop operating properly – if they operate at all. There has been tremendous upheaval among Sonos customers who have reacted angrily and negatively on Sonos-related message boards and other social media sites.
And now, just last week, Morgan Stanley analysts issued a rare “double downgrade” on Sonos shares – a significant ratings drop indicating that it expects the value of Sonos stock to underperform the market in the near- and mid-term future. Morgan Stanley’s analysis of why this double downgrade was necessary is pretty devastating.
