Sonos (NASDAQ:SONO), a maker of smart audio devices, saw its shares fall sharply on Thursday; the stock declined as much as 15%. As of 12:55 p.m. EST, the stock was down 14%.
The stock's decline comes after the company reported better-than-expected fiscal first-quarter revenue and earnings per share. But news that the company's chief financial officer is planning to retire later this year, and management's outlook for its fiscal second quarter, may have spooked some investors.
Sonos revenue for its first quarter of fiscal 2019 was $496 million, up 6% year over year. This beat a consensus analyst estimate for revenue of $491 million. Earnings per share climbed from $0.36 in the year-ago period to $0.55 in the first quarter of fiscal 2019, beating analysts' average estimate for $0.40.
Sonos also announced that its CFO, Michael Giannetto, informed the company on Feb. 1 that he plans to retire later this year. "Mr. Giannetto will continue to serve as chief financial officer until his successor is appointed," the company said in a filing with the Securities and Exchange Commission on Feb. 6.
Given that it was just last summer when Sonos went public, some investors may see the CFO's departure as a sign of trouble.
In its fiscal first-quarter shareholder letter, Sonos reaffirmed its outlook for full-year fiscal 2019 revenue to grow 10% to 12% year over year, to between $1.25 billion and $1.275 billion.
But management also expressed some concerns about its fiscal second quarter:
Reduced sell-through velocity toward the end of Q1 FY2019 created higher channel inventory levels than we would have liked heading into Q2 FY2019. This elevated channel inventory and our production schedule with IKEA starting in Q3 FY2019 instead of Q2 FY2019 will impact Q2 revenue but does not alter our full-year revenue or adjusted EBITDA outlook.