Sonos Inc.: Multiple Cross-Currents Keep Us EW-Rated

研报英文原文证据摘录

Sonos Inc.: Multiple Cross-Currents Keep Us EW-Rated

UpdateMDeCourcy and a renewed emphasis on full-funnel brand marketing. Taken together,

the company is doing a better job of creating excitement around both its near-term

product pipeline and its longer-term platform opportunity. In our view, Sonos is

starting to regain momentum after a challenging 2024-2025, with new product

launches, share gains, and a more cohesive strategic vision important steps toward

rebuilding investor confidence is a return to more durable revenue growth after a

challenging 2-year period.

At the same time, there are clear margin headwinds from input costs, with tariffs

refunds, product mix and promotions acting as swing factors in the near term.

Management has highlighted memory inflation as a significant gross margin

headwind in recent quarters, with the impact expected to worsen in the second half

of FY26 (400bps Y/Y headwind in F3Q) as DDR4 supply tightens, with Y/Y memory

headwinds expected to persist into early FY27. Partially offsetting memory

headwinds are more favorable tariff rates (formerly ~20%, reduced to 10%) and

higher like-for-like pricing for select products, with product/channel mix and

promotional intensity swing factors in the coming quarters. Net, it's hard to paint a

directionally positive picture on gross margins (like we could after the 2024 app

issue) given memory headwinds, though we actually consider gross margins flattish

Y/Y this and next year as relative wins given the persistence of input cost inflation.

What remains to be seen is whether SONO is successful in recouping tariff refunds,

which could amount up to ~$40M, or ~6% of NTM gross profit dollars.

There is still opportunity for cost rationalization, but we wouldn't be surprised if