Smart speaker manufacturer Sonos Inc.'s fiscal fourth-quarter revenues increased 16% year over year, or 7% when excluding seasonal effects. That compared to an expectation of 2% growth, according to consensus estimates gathered by S&P Global Market Intelligence. The company likely benefited from stay-at-home demand during the coronavirus pandemic, with growth expected to continue at a rate of 11% to 15% for the coming fiscal year.
The strong revenue performance came despite "the effects of COVID-19 and demand outstripping supply," according to CFO Brittany Bagley, which "are a broader industry-wide challenge and not unique to Sonos." Challenges for the company include "component availability, container availability, congestion in ports to higher shipping and logistics costs."
The challenges of logistics availability are not just a consumer electronics issue, as flagged in Panjiva's research of Nov. 20, but nonetheless raise the risk that supplies arrive well into the new year, when consumer spending has already crested.
Panjiva's data shows the challenges faced by Sonos' supply chain, with U.S. seaborne imports linked to the company having surged 55.2% year over year in August before sliding 32.8% in September. Normality may have returned somewhat in October with an increase of 1.6% year over year.
Sonos has also been navigating a change in the supply chain resulting from the Trump administration's tariffs on imports from China. Those are unlikely to be removed in the short-term under the Biden administration, while the turmoil caused by COVID-19 has also underscored the importance of maintaining a diverse supply chain.
That process may already be close to completion. The share of imports from China in U.S. seaborne imports linked to Sonos reached 61.6% in the three months to Oct. 31, compared to 82.6% in 2019 as a whole and 100% in 2018.
The difference has been accounted for by imports from Taiwan, which reached 35.4% of the total in the past three months, as well as a small but growing component from Malaysia. That process has also included a shift away from Inventec as the company's main supplier to also include Wistron for supplies from Taiwan.
Christopher Rogers is a senior researcher at Panjiva, which is a business line of S&P Global Market Intelligence, a division of S&P Global Inc. This content does not constitute investment advice, and the views and opinions expressed in this piece are those of the author and do not necessarily represent the views of S&P Global Market Intelligence. Links are current at the time of publication. S&P Global Market Intelligence is not responsible if those links are unavailable later.