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Sonos (SONO) Announces $100M Share Repurchase Authorization

Sonos Inc SONO recently announced that its board of directors has authorized a share repurchase program of up to $100 million.

The quantity and timing of share repurchases under the program will be decided by the company based on market conditions and corporate needs. Repurchases under the program may be undertaken in the open market, privately negotiated transactions, or in other ways.

The share repurchase program will be funded by company’s existing cash and cash equivalents or future cash flow. As of Oct 1, 2022, the company had $274.9 million in cash and cash equivalents with no debt.

Sonos, Inc. Price and Consensus

Sonos, Inc. Price and Consensus
Sonos, Inc. Price and Consensus

Sonos, Inc. price-consensus-chart | Sonos, Inc. Quote

The company has repurchased $250 million worth of shares since September 2019, including the completion of $150 million share repurchase program in the fiscal fourth quarter that ended Oct 1, 2022.

The series of share repurchase allows the company to prevent dilution caused by stock-based compensation and increase shareholder value.

The announcement was simultaneously made with the company’s release of its fiscal fourth quarter of 2022 results. The company reported non-GAAP loss of 32 cents per share for fiscal fourth quarter against earnings of 8 cents per share in the prior-year quarter. The Zacks Consensus Estimate was pegged at a loss of 43 cents per share.

Quarterly revenues declined 12% year over year to $316.3 million, owing to soft demand for its products amid continued supply constraints and unfavorable foreign exchange movements. However, it beat the Zacks consensus Estimate by 4.6%.

Following the announcement, shares of the company were up 3%, and closed trading at $17.35 per share on Nov 17.

For fiscal 2023, the company expects revenues to be down 3% to up 3% year over year and come in the range of $1.7-$1.8 billion.

Sonos currently carries a Zacks Rank #3 (Hold). Shares of the company have lost 45.3% compared with the industry’s decline of 35.5% in the past year.

Zacks Investment Research
Zacks Investment Research


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Stocks to Consider

Some better-ranked stocks from the broader consumer discretionary sector are RCI Hospitality RICK, Swedish Match SWMAY and Lululemon Athletica LULU. RCI Hospitality, Swedish Match and Lululemon Athletica each currently carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks.

The Zacks Consensus Estimate for RCI Hospitality’s 2022 earnings is pegged at $5.27 per share, up 2.3% in the past 60 days. The long-term earnings growth rate is anticipated to be 12%.

RCI Hospitality’s earnings beat the Zacks Consensus Estimate in three of the last four quarters, the average being 39.4%. Shares of RICK have increased 21.5% in the past year.

The Zacks Consensus Estimate for Swedish Match’s 2022 earnings is pegged at 46 cents per share, unchanged in the past 60 days.

Swedish Match’s earnings beat the Zacks Consensus Estimate in the last four quarters, the average being 8%. Shares of SWMAY have increased 48.1% in the past year.

The Zacks Consensus Estimate for Lululemon’s 2022 earnings is pegged at $9.89 per share, up 0.2% in the past 60 days. The long-term earnings growth rate is anticipated to be 20%.

Lululemon’s earnings beat the Zacks Consensus Estimate in the last four quarters, the average being 10.4%. Shares of LULU have decreased 25.2% in the past year.


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