By Jorge Mercado Tuesday, May 16th, 2023

Shares of Santa Barbara-based Sonos have dipped more than 30% since the company’s second-quarter earnings were announced on May 10, revealing that the company would be slashing its fiscal projections for the full year.

For the quarter ended March 31, Sonos generated revenue worth $304.2 million, down 22.4% year-over-year while gross margin decreased 150 basis points year-over-year to 43.3%.

The company also suffered a net loss of $30.7 million compared to a net gain of $8.6 million last year.

Adjusted for one-time losses, Sonos earned net income of $5.7 million, of 4 cents per share, down from $36.8 million, or 26 cents per share, in the same quarter a year ago. Analysts projected non-GAAP earnings per share worth 1 cent.

Despite beating projections, overall investors were turned off by the company slashing guidance.

Sonos said it now expects annual revenue of between $1.63 billion and $1.68 billion, compared with its prior range of $1.7 billion to $1.8 billion. Analysts were expecting annual revenue of $1.69 billion.

“We are reducing our expectations for the second half of Fiscal 2023 due to softening consumer demand and channel partner inventory tightening. As a result, we are taking swift action to reduce our operating expenses and protect our profitability,” CEO Patrick Spence said in a press release.

Sonos shares closed at $15.19 on May 16, down 30.8% since May 10.