What happened
Shares of Roomba maker iRobot (IRBT +0.00%) raced out of their charging station this morning and are up 14.5% as of 11:55 a.m. EDT after the company released a "business update" describing the "substantially stronger-than-expected quarterly revenue" it collected in Q2 2020. It seems that in a time of quarantine and stay-at-home orders, iRobot has booked "stronger-than-expected orders ... as consumers worldwide are increasingly relying on Roomba robot vacuums and Braava robot mops to address their home floor care needs," which is plumping out the top line nicely.
Image source: Getty Images.
So what
iRobot's Q2 report, covering the period through the end of June, isn't due out till late next month. But already management is feeling optimistic that it will be kind of a blowout. And honestly, beating expectations shouldn't be too hard. Analysts who cover the company are forecasting a 30% sales decline at iRobot, with revenue of less than $183 million translating into a per-share loss of $0.71.
iRobot, however, says investors can expect sales ranging from $260 million to $270 million -- on par with or even better than what iRobot booked a year ago, before coronavirus came on the scene. Gross margins on these revenues are expected to be "better-than-planned," resulting in "a return to operating profitability for the quarter."
Now what
This appears to be more than just a "Roomba story," too, in which homebound customers who can no longer rely on their weekly housekeeping service buy a few Roombas to do some light sweeping until things get back to normal.
As iRobot CEO Colin Angle noted, "maintaining a clean home has become a higher priority for many consumers as COVID-19 has forced people to spend more time in their homes." That word -- "priority" -- suggests to me that customers may be employing something closer to iRobot's whole line of cleaning robots, not just vacuuming Roombas but cleaner-dispensing Braava floor-mopping robots as well. And in that case, iRobot may not just maintain sales as a result of coronavirus, but grow them this year as well.
We still have to wait for July to find out what that means for iRobot's bottom line, but for now the news sounds pretty good.
