Sonos CEO: People are buying everything we sell

Consumers are still highly tuned into what Sonos has to offer during the pandemic.

“They’re buying everything,” Sonos CEO Patrick Spence tells Yahoo Finance Live.

It sure appears that way.

Shares of the speaker maker exploded 15% on Thursday as it smashed sales and profit forecasts for its first fiscal quarter. The 15-year-old company delivered its second straight upbeat outlook for its current fiscal year, too.

Here’s how Sonos fared compared to Wall Street estimates:

  • Net Sales: up 15% year-over-year to $645.6 million versus $589.8 million estimate

  • Adjusted EBITDA: up 78% year-over-year to $166.3 million versus estimates for $130 million

  • Adjusted Diluted EPS: $1.17 cents a share versus estimates for 98 cents a share

  • Full Year Guidance:

    • Net Sales: $1.53 billion to $1.58 billion; previous $1.44 billion to $1.55 billion

    • Adjusted EBITDA: $195 million to $225 million; previous $170 million to $205 million

For Sonos, the strong quarter and outlook reflects the behavior changes well underway among consumers amidst the COVID-19 pandemic. People continue to spend more time in their homes as they seek to avoid getting the deadly disease. In turn, that has led to mass upgrading of one’s living situation — whether that is repainting the house with a new can of paint bought at Home Depot or adding seven new Sonos speakers throughout the kitchen and dining room.

In that regard, it’s unsurprising to see Sonos speaker sales up 13% in the quarter and system sales up 59%.

NEW YORK, NEW YORK - MAY 16: A Sonos store remains closed in the Soho section of manhattan during the coronavirus pandemic on May 16, 2020 in New York City. COVID-19 has spread to most countries around the world, claiming over 312,000 lives with infections of over 4.7 million people. (Photo by Rob Kim/Getty Images)
NEW YORK, NEW YORK - MAY 16: A Sonos store remains closed in the Soho section of manhattan during the coronavirus pandemic on May 16, 2020 in New York City. COVID-19 has spread to most countries around the world, claiming over 312,000 lives with infections of over 4.7 million people. (Photo by Rob Kim/Getty Images)

“Home theater is a big category now obviously with a lot of streaming companies doing first-run movies straight to home. That’s huge [for us]. That’s a particular area of strength,” Spence said.

Wall Street is staying bullish on Sonos ahead of its key investor day on March 5. The company is expected to unveil a new product and provide insight into its longer term outlook.

“Fiscal first quarter results should fuel the bull case in Sonos,” says Jefferies analyst Brent Thill.

Brian Sozzi is an editor-at-large and anchor at Yahoo Finance. Follow Sozzi on Twitter @BrianSozzi and on LinkedIn.

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