Sonos Gearing Up to Report Q2 Earnings: Here's What to Expect

Sonos, Inc. SONO is scheduled to report second-quarter fiscal 2025 results on May 7, after market close.For the quarter, SONO anticipates revenues between $240 million and $265 million. The Zacks Consensus Estimate for revenues is pegged at $255.9 million, indicating a rise of 1.3% from the year-ago reported number.The consensus estimate for the bottom line is pegged at a loss of 18 cents compared with a loss of 34 cents reported in the prior year.The company’s earnings beat the Zacks Consensus Estimate in three of the trailing four quarters while missing in one. It delivered a trailing four-quarter average earnings surprise of 22.8%. (Find the latest EPS estimates and surprises on Zacks Earnings Calendar.)In the past year, shares of SONO have plunged 46.8% against the Zacks Audio Video Production industry’s growth of 47.2%.Image Source: Zacks Investment ResearchFactors Shaping SONO’s Q2 ResultsSonos’ fiscal second-quarter performance is likely to have been adversely impacted by multiple headwinds, including elevated promotional activity that weighed on margins and restructuring efforts tied to a company-wide reorganization. The workforce reduction, affecting nearly 12% of employees, is expected to result in charges of $15 million to $18 million, primarily related to severance and benefits, most of which are being recognized in the second quarter. These cost pressures, coupled with the operational disruption from the restructuring, are likely to have hurt its second-quarter performance.The troubled rollout of Sonos’ extensively redesigned app in May 2024 is likely to have weighed on its performance. Unforeseen bugs disrupted user experience and partner operations, prompting Sonos to invest $6 million in app recovery during the first quarter and project an additional $4 million to $8 million in related charges for the second quarter. These unexpected costs, combined with operational setbacks, are expected to contribute to a second-quarter adjusted EBITDA loss in the range of $27 million to $6 million.Sonos, Inc. Price and EPS Surprise Sonos, Inc. price-eps-surprise | Sonos, Inc. QuoteFor the second quarter, Sonos expects GAAP gross margin to be between 42% and 44%, down year over year due to foreign exchange headwinds and amortization costs, partly offset by better product mix and lower seasonal discounts. Non-GAAP gross margin is projected at 44% to 45.8%, boosted by an improved cost structure and minimal tariff impact. Non-GAAP operating expenses are expected to decline to $140–$145 million from $157 million last year.However, Sonos’ focus on product innovation is likely to have offset second-quarter challenges. The strong launch of Sonos Ace expanded the company into the high-margin personal listening category, supporting top-line performance amid disruptions from the app redesign. Continued demand for flagship products like the Arc Ultra and Sub 4 is likely to have bolstered revenue momentum.Additionally, the introduction of the Era 100 Pro marked Sonos’ strategic entry into the light-commercial audio market, opening a new revenue stream that may have contributed to overall growth and partially mitigated margin and operational pressures during the quarter.Sonos’ ongoing expansion of its direct-to-consumer initiatives, broader partner ecosystem and growing international presence, particularly in Asia, likely supported its second-quarter performance.What Our Model Says About SONOOur proven model predicts an earnings beat for SONO this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy), or 3 (Hold) increases the odds of an earnings beat.SONO has an Earnings ESP of +25.71% and a Zacks Rank #3. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.Other Stocks With the Favorable CombinationHere are three other stocks you may want to consider, as our model shows that these, too, have the right elements to post an earnings beat in this reporting cycle.Axon Enterprise AXON is set to report first-quarter 2025 earnings on May 7, after market close. It has an Earnings ESP of +9.28% and a Zacks Rank of 1 at present. You can see the complete list of today’s Zacks #1 Rank stocks here. The Zacks Consensus Estimate for AXON’s earnings is pegged at $1.27 per share, indicating year-over-year growth of 10.4%. The consensus estimate for its sales is pegged at $589.1 million, indicating year-over-year growth of 27.9%.GXO Logistics GXO currently has an Earnings ESP of +1.18% and a Zacks Rank of 3. The company is slated to report first-quarter 2025 results on May 7. The Zacks Consensus Estimate for first-quarter 2025 revenues and earnings are pegged at $2.91 billion and 26 cents per share, respectively. Shares of GXO have declined 27.1% in the past year.CurtissWright CW is set to report its first-quarter results on May 7, after market close. It has an Earnings ESP of +0.12% and a Zacks Rank of 3 at present.The Zacks Consensus Estimate for CW’s earnings is pegged at $2.39 per share, indicating year-over-year growth of 20.1%. The consensus estimate for its sales is pegged at $767.2 million, indicating year-over-year growth of 7.6%.Zacks' Research Chief Names "Stock Most Likely to Double"Our team of experts has just released the 5 stocks with the greatest probability of gaining +100% or more in the coming months. Of those 5, Director of Research Sheraz Mian highlights the one stock set to climb highest.This top pick is among the most innovative financial firms. With a fast-growing customer base (already 50+ million) and a diverse set of cutting edge solutions, this stock is poised for big gains. Of course, all our elite picks aren’t winners but this one could far surpass earlier Zacks’ Stocks Set to Double like Nano-X Imaging which shot up +129.6% in little more than 9 months.Free: See Our Top Stock And 4 Runners UpWant the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Sonos, Inc. (SONO): Free Stock Analysis Report Curtiss-Wright Corporation (CW): Free Stock Analysis Report Axon Enterprise, Inc (AXON): Free Stock Analysis Report GXO Logistics, Inc. (GXO): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks