What happened
"Smart home" products and services provider Snap One Holdings (SNPO -0.19%) got snapped off at the knees after missing earnings badly on Wednesday. As of 2:20 p.m. EDT, Snap One shares are down an astonishing 18%.
Analysts had forecast Snap One would earn $0.15 per share in its fiscal fourth quarter 2021 on sales of $263.2 million. Now the good news is that Snap One beat that revenue target handily, reporting $273.5 million in quarterly sales. But the bad news is that it missed earnings by a mile.
Image source: Getty Images.
So what
In fact, Snap One "missed earnings" entirely and instead lost $0.11 per share. Although Q4 sales grew a respectable 21%, both cost of goods sold and selling, general, and administrative (SG&A) expenses grew even faster -- up 27% and 25%, respectively -- and pushed Snap One into a loss.
Worse, the quarterly loss was 57% larger than the $0.07 per share that Snap One lost one year ago. That's surprising given that the company's share count increased by more than 25%, which ordinarily you'd expect to spread losses out among more shares outstanding, lowering the per-share loss. (So in other words, as bad as the news was, it could have been even worse.)
And the news wasn't much better for the year as a whole. As of the close of 2021, Snap One grew its sales 24% to $1.01 billion but grew its losses 33% to $0.56 per share.
Now what
So, will 2022 be any kinder to Snap One than 2021 was?
"Demand for our products and services remains high as we enter 2022," says CEO John Heyman. But then again, demand was pretty high in 2021, too, and that didn't help much with profits. Looking ahead to the new fiscal year, Snap One says it thinks sales will grow modestly to $1.14 billion to $1.17 billion this year -- 13% to 16% growth.
The most management could promise on the profits front, however, was between $114 million and $120 million in adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) -- growth of just 3% to 8%. And there was no promise at all of actual GAAP net income in 2022.
No wonder investors are disappointed.