Direct to Consumer Growing Amid COVID-19, Sonos Executives Say
Amid COVID-19, Sonos' direct-to-consumer business is gaining. CEO Patrick Spence cited roughly 400% growth in the DTC business in April, tamping down the total company growth decline for the month to 5%. For the quarter ended March 28, DTC grew…
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32% said Chief Financial Officer Brittany Bagley on a fiscal Q2 call Wednesday. (See Q2 materials here that include the call and financial report). Revenue for Q2 was $175 million, down 17% from the year-ago quarter. Quarterly loss widened to $52.3 million from $22.8 million. The company withdrew February guidance of $1.36 billion-$1.4 billion revenue for FY 2020, 8-11% growth, saying, “We do not know when physical retail will reopen, or how the global economy will recover from the COVID-19 pandemic.” On DTC, Spence said in Q&A that “in times like these, I think what happens is trends that were already underway accelerate in a big way.” A takeaway from the surge in April DTC sales was that consumers are willing to buy audio products “in a big way online,” said Spence. He called Sonos Radio, launched last month (see 2004230067) with Entercom as a partner, a “toe in the water on services” for the hardware company. Sonos has always had a radio component, but “we hadn’t touched it in 15 years,” said the executive. It's using Radio to “showcase what’s possible” on the Sonos app, with an eye toward monetization through advertising.