The drop wasn't enough to put the consumer electronics specialist in negative territory for the year, though. Instead, iRobot closed out 2018 up 9% compared to a 6% decline for the market.
iRobot announced early last month that it won a key patent protection case, which is another sign that its intellectual property is both valuable and a key competitive advantage. However, investors were likely more concerned with the risk that its consumer products might not sell as well as expected over the key holiday shopping season. For its part, management said in late October that they saw no issues with demand, and that their newest Roomba releases should excite consumers in the fiscal fourth quarter.
The company announces holiday-quarter results on Feb. 6 in a report that will be closely watched for signs of continued strong demand and healthy pricing. These warning signs would likely show up in actual results that fall short of management's target of between $92 million and $96 million of operating income for fiscal 2018. Looking further out, investors are bracing for a profitability decline in 2019 that could come courtesy of higher production costs thanks to rising tariff rates.
Check out the latest iRobot earnings call transcript.