What happened
iRobot (IRBT 0.58%) stock trailed the market by a wide margin last month, falling 20% compared to a 1% uptick in the S&P 500, according to S&P Global Market Intelligence. That slump contributed to a roller-coaster ride for shareholders, who had been up by 60% at one point in 2019 but are now looking at declines of nearly 20% for the year.
Image source: Getty Images.
So what
Investors reacted harshly to the robotic cleaning device specialist's second-quarter report that showed slowing sales growth and spiking costs. iRobot said in late July that sales came in below expectations for the period even as expenses jumped. Management blamed both issues on what they believe will be temporary dislocations caused by rising tariff rates.
Now what
CEO Colin Angle and his team see plenty of support for their bullish long-term reading of the industry, including strong demand for iRobot's latest product launches. However, investors are likely to see mounting disruption from the tariff increases in the months to come, including a shift in order volumes toward later in the year. That factor will put even more pressure than normal on this consumer-focused industry during the make-or-break holiday season quarter in 2019.
