Market Snapshot
briefing.com
| Dow | 33784.58 | -164.38 | (-0.48%) | | Nasdaq | 11844.48 | -66.06 | (-0.55%) | | SP 500 | 4096.51 | -21.35 | (-0.52%) | | 10-yr Note | -22/32 | 3.675 |
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| | NYSE | Adv 756 | Dec 2181 | Vol 455 mln | | Nasdaq | Adv 1348 | Dec 3130 | Vol 4.4 bln |
Industry Watch
| Strong: -- |
| | Weak: Communication Services, Utilities, Materials, Financials, Industrials |
Moving the Market
-- Continued underperformance of Alphabet and communication services sector
-- Sense that market is overextended short term and due for consolidation period
-- Rising Treasury yields
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Closing Summary
09-Feb-23 16:45 ET
Dow -249.13 at 33699.83, Nasdaq -120.94 at 11789.60, S&P -36.36 at 4081.50
[BRIEFING.COM] The stock market started today's session with a distinct bullish bias, yet the bulls were soon corralled and the major indices spent nearly the entirety of today's session retracing their opening steps in what became a trend-down day. The selling that took place was broad based, but orderly; nonetheless, it left the S&P 500 below 4,100 at the closing bell.
A favorable response to Walt Disney's (DIS 110.36, -1.42, -1.3%) better-than-expected fiscal Q1 earnings report and restructuring announcement, falling Treasury yields, and another weekly initial jobless claims report that was supportive of the soft landing scenario provided the fuel for the opening bid.
To be fair, Disney wasn't the only source of earnings support for the broader market to begin the day. Wynn Resorts (WYNN 108.59, +4.97, +4.8%), Monolithic Power Systems (MPWR 510.43, +47.43, +10.2%), Sonos (SONO 20.80, +2.94, +16.5%), PepsiCo (PEP 172.78, +1.62, +1.0%), and Tapestry (TPR 44.71, +1.50, +3.5%) were some of the other standouts that had the broader market on solid footing at today's open. Disney itself followed suit with the broader market and relinquished a 5.7% gain to close the day in negative territory.
The market's footing started to slide when Treasury yields began moving up from their overnight lows. Selling in the Treasury market intensified following a weak, $21 billion 30-yr bond auction at 1:00 p.m. ET. The 2-yr note yield, which slipped to 4.40% overnight, settled the day at 4.52%, and the 10-yr note yield, which saw 3.58% overnight, settled the session at 3.69%.
The jump in market rates compounded the selling pressure that had already taken root.
Separately, the early rally effort also fostered some pressing concerns about the market being overextended on a short-term basis and trading at a premium valuation despite declining earnings estimates.
Those concerns triggered renewed selling interest that was fairly unrelenting over the course of today's session.
The S&P 500 communication services sector (-2.8%) was today's biggest loser, pinned down by additional losses in Alphabet (GOOG 95.46, -4.54, -4.5%), but it had plenty of company. All 11 S&P 500 sectors ended the day with a loss. Other key laggards included the financials (-1.2%), industrial (-0.9%), health care (-0.9%), and information technology (-0.5%) sectors. The consumer discretionary sector (-0.2%), supported by strength in Tesla (TSLA 207.32, +6.03, +3.0%) and several sector constituents that reported earnings, like Wynn Resorts, had the slimmest loss in today's trading.
Market breadth deteriorated along with the indices. Declining stocks led advancing stocks by a nearly 3-to-1 margin at the NYSE and by a better than 2-to-1 margin at the Nasdaq.
- Nasdaq Composite: +12.6% YTD
- Russell 2000: +8.7% YTD
- S&P Midcap 400: +8.3% YTD
- S&P 500: +6.3% YTD
- Dow Jones Industrial Average: +1.7% YTD
Reviewing today's economic data:
- Initial claims for the week ending February 4 increased by 13,000 to 196,000 (Briefing.com consensus 194,000). Continuing jobless claims for the week ending increased by 38,000 to 1.688 million.
- Notwithstanding the jump in initial claims, the key takeaway is that claims remain below 200,000, which is indicative of a very tight labor market and a reluctance on the part of most companies to cut their workforce.
Ahead of tomorrow's open, Global Payments (GPN) and Newell Brands (NWL) will be featured earnings reporters. The economic calendar will include the February Preliminary University of Michigan Consumer Sentiment Index (Briefing.com consensus 65.0; Prior 64.9) at 10:00 a.m. ET and the January Treasury Budget (Prior -$85.0B) at 2:00 p.m. ET.
Market continues to deteriorate ahead of closing bell
09-Feb-23 15:25 ET
Dow -274.58 at 33674.38, Nasdaq -130.95 at 11779.59, S&P -38.52 at 4079.34
[BRIEFING.COM] The major indices are extending their losses ahead of the close.
After the close today, Cloudflare (NET), Expedia Group (EXPE), Lyft (LYFT), Mohawk (MHK), Motorola Solutions (MSI), PayPal (PYPL), Qualys (QLYS), VeriSign (VRSN) will headline the earnings reports.
Global Payments (GPN) and Newell Brands (NWL) are among the notable names reporting earnings ahead of tomorrow's open.
Looking ahead to Friday, market participants will receive the following economic data:
- 10:00 a.m. ET: February preliminary University of Michigan Consumer Sentiment (Briefing.com consensus 65.0; prior 64.9)
- 2:00 p.m. ET: January Treasury Budget (prior -$85.0 billion)
S&P 500 takes out the 4100 level
09-Feb-23 15:00 ET
Dow -197.86 at 33751.10, Nasdaq -89.80 at 11820.74, S&P -25.05 at 4092.81
[BRIEFING.COM] Things are little changed in the last half hour. It seemed like the S&P 500 was trying to reclaim a position above 4,100 before taking another turn lower.
Notably, semiconductor stocks have maintained a leadership position in today's trade. The PHLX Semiconductor Index is up 0.5% while the main indices all sport losses of at least 0.6%.
Energy complex futures settled the session mixed. WTI crude oil futures fell 1.1% to $77.65/bbl and natural gas futures rose 0.5% to $2.41/mmbtu. The S&P 500 energy sector (-0.5%) holds some of the slimmest decline among the 11 sectors.
Intl Flavors, Baxter underperform in S&P 500 after earnings
09-Feb-23 14:30 ET
Dow -164.38 at 33784.58, Nasdaq -66.06 at 11844.48, S&P -21.35 at 4096.51
[BRIEFING.COM] The markets continue to chop to lows, the S&P 500 (-0.52%) to hold firm in second place to this point.
S&P 500 constituents Intl Flavors (IFF 91.10, -21.34, -18.98%), Baxter (BAX 40.08, -5.60, -12.26%), and V.F. Corp (VFC 26.27, -2.17, -7.63%) pepper the bottom of today's standings. IFF and BAX fall following earnings, while VFC declines as the stock is seeing a shakeout following Tuesday's dividend cut. VFC also failed to hold the 50-day SMA (29.11) this morning.
Meanwhile, reinsurance firm Everest Re (RE 382.15, +25.06, +7.02%) is among today's top performers following last night's earnings beat.
Gold lower after three straight wins
09-Feb-23 14:00 ET
Dow -107.27 at 33841.69, Nasdaq -45.99 at 11864.55, S&P -15.13 at 4102.73
[BRIEFING.COM] With about two hours to go on Thursday the tech-heavy Nasdaq Composite (-0.39%) has trickled to session lows alongside its counterparts.
Gold futures settled $12.20 lower (-0.7%) to $1,878.50/oz even though the greenback showed modest weakness.
Meanwhile, the U.S. Dollar Index is down about -0.2% to $103.18.
Walgreens, Travelers among worst DJIA performers on Thursday
09-Feb-23 13:30 ET
Dow -73.51 at 33875.45, Nasdaq -9.82 at 11900.72, S&P -7.07 at 4110.79
[BRIEFING.COM] The market has consolidated near lows in the last half hour, the Dow Jones Industrial Average (-0.22%) hosting the worst declines.
A look inside the DJIA shows that Walgreens Boots Alliance (WBA 36.11, -0.45, -1.23%), Travelers (TRV 185.09, -2.30, -1.23%), and Verizon (VZ 40.07, -0.45, -1.11%) are among today's top laggards.
Meanwhile, Salesforce (CRM 174.69, +5.06, +2.98%) tops the standings.
The DJIA is now down approx. -0.1% week-to-date.
Elsewhere, at the top of the hour, the Treasury's $21 bln 30-year note auction drew a high yield of 3.686% on a bid-to-cover of 2.25.
Page One
Last Updated: 09-Feb-23 09:01 ET | Archive
Bulls are back buying on the weakness
The stock market has traded lower in three of the last four sessions, but it looks set to start today's session on a higher note, underpinned by the strong response to Walt Disney's (DIS) better than expected fiscal Q1 report and cost-cutting actions, and a continued drop in Treasury yields following yesterday's 10-yr note auction that was met with stellar demand.
Currently, the S&P 500 futures are up 34 points and are trading 0.9% above fair value, the Nasdaq 100 futures are up 167 points and are trading 1.4% above fair value, and the Dow Jones Industrial Average futures are up 227 points and are trading 0.7% above fair value.
Shares of Dow component Walt Disney are up 5.9%. That has been a boon for the Dow Jones Industrial Average, as well as the broader market which is also being helped by positive responses to earnings reports from the likes of PepsiCo (PEP), Wynn Resorts (WYNN), Duke Energy (DUK), O'Reilly Automotive (ORLY), Tapestry (TPR), AstraZeneca (AZN), AppLovin (APP), and Cameco (CCJ) to name some others.
The point is that positive responses are cutting across sectors and industries, and they are overshadowing the negative responses seen in other stocks like Mattel (MAT), Affirm Holdings (AFRM), Baxter (BAX), Huntington Ingalls (HII), and Sealed Air (SEE), which also reported earnings.
The biggest point in all this is that the stock market has retained its bullish bias, leaning toward an emphasis on positive news, and has not surrendered its willingness to buy on weakness.
Naturally, that understanding continues to play into sidelined investors' fear of missing out on further gains, likely inducing a willingness to put some cash to work. It is also continuing to stoke speculative buying interest that is propping up many stocks more than they deserve based on fundamentals.
The fact that Treasury yields have come down some from their post-employment report highs, even though Fed officials keep pointing to the likelihood of ongoing rate hikes, has also encouraged some of the more speculative price action. The 2-yr note yield is down one basis point today to 4.44% and the 10-yr note yield is down seven basis points to 3.58%.
It is worth noting here that the latest investor sentiment survey by the American Association of Individual Investors showed bullish sentiment rising to 37.5% for the week ending February 8, up from 29.9% in the prior week. 37.5% is in-line with the historical average but, notably, it is the highest reading since the week of December 30, 2021, which was followed by some not-so-great price action in early 2022.
This stock market isn't fully "bulled up," yet there has been no mistaking its bullish bias -- and animal spirits in some spaces -- in early 2023.
Some of that bullishness has been wrapped up in a soft landing expectation. The latest weekly initial claims report is supportive of that thinking.
Initial claims for the week ending February 4 increased by 13,000 to 196,000 (Briefing.com consensus 194,000). Continuing jobless claims for the week ending increased by 38,000 to 1.688 million.
Notwithstanding the jump in initial claims, the key takeaway is that claims remain below 200,000, which is indicative of a very tight labor market and a reluctance on the part of most companies to cut their workforce.
With a tight labor market, consumer spending should hold up relatively well along with the thinking at the Fed that ongoing rate increases are appropriate.
-- Patrick J. O'Hare, Briefing.com
Affirm getting denied as dismal earnings report sheds light on significant interest rate risk (AFRM)
One week ago, shares of buy now, pay later (BNPL) company Affirm (AFRM) were soaring in the wake of a press conference from Fed Chair Powell that fueled optimism that interest rates won't rise as quickly as feared. Those gains have since been wiped out and today the stock is getting hammered following a dismal 2Q23 earnings report that illustrated just how impactful interest rates can be on its business.
- The headline numbers were weak across the board with AFRM missing top and bottom-line expectations, while Gross Merchandise Volume (GMV) of $5.7 bln fell short of the company's forecast of $5.73-$5.83 bln.
- On a growth basis, the 27% yr/yr increase in GMV was by far AFRM's weakest showing as a public company, reflecting a deceleration in loan demand due to rising rates and softening sales for discretionary goods.
- In particular, AFRM called out the electronics, home and lifestyle, and sporting goods categories as notable laggards. It's worth noting that beleaguered connected fitness company Peloton (PTON) is a still a significant partner of AFRM's and its troubles continue to weigh on its results. In Q2, the sporting goods category plunged by nearly 50% for AFRM, primarily because of PTON's ongoing struggles.
However, AFRM's issues extend well beyond the slumping sales at PTON.
- In fact, CEO Max Levin took some responsibility for the company's disappointing results, stating that a key operational misstep contributed to the poor earnings report. Specifically, he said that the company was too late with increasing prices for its merchants and customers, which prevented it from mitigating the impact of higher benchmark interest rates -- which increase the company's borrowing costs.
- Consequently, AFRM's ability to approve loans, and its ability to protect its margins, was negatively affected. For the quarter, adjusted operating margin came in at (15.5%) compared to (2.2%) in the prior quarter.
- Echoing the recent statements from Alphabet (GOOG) CEO Sundar Pichai, Mr. Levin also conceded that AFRM got ahead of itself with its hiring, anticipating a stronger economy that would support higher growth for the company. Now, like GOOG, the company is right sizing its workforce by implementing a significant round of layoffs (19% of its workforce) to better align its cost structure with the slowing growth environment.
- Investors aren't cheering this cost-cutting move, though, because AFRM's guidance -- especially for Q3 -- is so weak. For the quarter, the company is forecasting GMV growth to slow further to just 14%, while Revenue Less Transaction Costs (RLTC) is projected to decrease by 20% to about $145 mln. The pricing initiatives that AFRM took later in the year will begin to pay off eventually, but it will take some time to see those dividends.
On the positive side, AFRM's credit quality remains healthy, even as macroeconomic pressures mount. Delinquencies were inline or better than comparable periods in pre-pandemic years, and that encouraging trend continued through January. Securing funding also hasn't been an issue as it ended January with $11.3 bln in available funding capacity -- a new record high for the company. Outside of these two positives, though, good news was hard to find within this earnings report.
Mattel sells off after running into a similarly unfavorable environment as rival HAS in Q4 (MAT)
After rival toy maker Hasbro (HAS) guided Q4 earnings well below consensus last month, citing a challenging holiday quarter, we were fearful Mattel (MAT -10%) would follow suit. Although the market did drag MAT down with HAS's grim outlook, shares held up relatively well, dropping by less than 1%. Therefore, by following in HAS's footsteps, missing earnings and sales estimates in Q4, and providing a bleak FY23 outlook, shares of MAT are under intense selling pressure today.
- What happened? Like HAS, MAT contended a much worse macroeconomic environment than anticipated. The company entered Q4 expecting point-of-sales (POS), those at retail shops, to accelerate. Although MAT did see POS growth, it was not enough to offset waning consumer demand, particularly in October and November.
- This ultimately drove retailers to implement higher discounts and employ a more cautious approach to inventory replenishment, denting MAT's adjusted gross margins by 620 bps yr/yr to 43.1%.
- As a result, adjusted EPS sunk by 66.0% yr/yr to $0.18, missing the low end of MAT's forecast by $0.06. Sales were down 21.9% to $1.4 bln in the quarter, significantly worse than the single-digit decline analysts expected.
- Aside from gross billings (sales to retailers) in MAT's toy vehicle category, such as its Hot Wheels brand, which climbed 6% yr/yr, all product categories experienced pronounced declines in Q4. Dolls fell 27%, Preschool dropped 33%, and Action Figures, Games, and Other sunk by 26%.
- Furthermore, gross billings in MAT's power brands, Barbie, Fisher-Price, and Thomas & Friends, were significantly down in Q4.
- The current unfavorable landscape is not set to improve meaningfully this year. MAT foresees a period of volatility and macroeconomic challenges dinging consumer demand throughout FY23. At the same time, elevated retailer inventories will also continue to weigh on financial performance.
- As a result, MAT guided to FY23 adjusted EPS of $1.10-1.20, an 8% contraction yr/yr at the midpoint, well below analyst projections of double-digit percentage gains.
- Still, management is optimistic that when considering FY22 results, consumer demand is still present, evidenced by relatively better gross billings figures across MAT's product categories compared to Q4. MAT also projected an adjusted gross margin expansion of 110 bps yr/yr in FY23.
- The company also mentioned that it expects to resume share repurchases in FY23.
Bottom line, MAT shares holding up despite warning signs flashed by rival HAS last month paved the way for a big sell-off on underwhelming Q4 earnings. MAT's comments may not have inspired much confidence. However, the company still boasts many advantages, such as brand recognition and popular entertainment titles, including upcoming movie releases, to successfully steer through the shaky macroeconomic environment and possibly even gain market share. However, given the discretionary nature of MAT's product portfolio, further pullbacks may ensue, especially if inflationary pressures continually squeeze consumer budgets.
Walt Disney's first earnings report with Bob Iger back at helm holds much promise (DIS)
It will take more than just wishing upon a star to turn Walt Disney's (DIS) fortunes around, but newly reinstated CEO Bob Iger may have the magic wand to deliver a Cinderella story following a rough two-year stretch. From early 2021 through the end of 2022, DIS shares skidded lower by nearly 60%, making plenty of investors grumpy as DIS's streaming business racked up billions in losses. The disappointing share price and financial performance -- including three EPS misses within a five quarter period -- set the stage for Iger to replace former CEO Bob Chapek last November.
Iger's successful run as DIS's CEO from 2005-2020 sparked hopes that he could reawaken the sleeping entertainment giant.
- Based on yesterday's better-than-expected 1Q23 earnings report and the flurry of changes underway at DIS, that optimism seems to be well-founded, although it will be more difficult for Iger to impress investors moving forward.
- For instance, one doesn't need a crystal ball to predict that job cuts (DIS announced a workforce reduction of 7,000 roles), cost-cutting initiatives (DIS announced $5.5 bln in targeted cost savings), and the reinstatement of a dividend (DIS intends to pay a modest dividend by calendar year end) will placate investors.
- The harder work of balancing content production with content spending, figuring out how best to distribute and monetize that content, while effectively competing in an intensely competitive streaming market, will ultimately determine whether Iger can improve earnings and stock returns in a more lasting way.
Of course, this isn't lost on Iger, which is why one of his first moves is to restructure the company so that more decision-making power is back in the hands of content creators.
- More specifically, he is dismantling the Disney Media & Entertainment Distribution segment, which previously decided where and how content was monetized.
- In its place, a new Disney Entertainment division will be created, and it will include the company's full slate of entertainment, media, and content businesses -- including streaming. Disney Entertainment will be joined by a new Disney ESPN segment, and the preexisting Disney Parks, Products, and Experiences unit.
At the top of Iger's immediate to-do list is to improve the profitability of Disney+.
- He already has a running start here as previous cost-cuts under Chapek's stewardship helped narrow the Direct-to-Consumer (DTC) operating loss by about $450 mln qtr/qtr to $1.05 bln.
- Importantly, Iger reaffirmed the outlook that DIS's streaming business will be profitable by the end of FY24.
- However, he did scratch Chapek's long-term subscriber guidance of 215-245 mln Disney+ subscribers by the end of FY24, stating that he wants to remove the emphasis on quarterly metrics.
- Although Iger didn't explicitly say that more price increases are coming for the streaming services, he did hint at that possibility.
- Following the price increases in December, churn remained quite modest as Disney+ subscribers declined by just 1% qtr/qtr to 161.8 mln -- a figure that some view as better-than-feared. The low churn may be seen as a green light to push prices higher with Iger stating during the earnings call that DIS will "adjust our pricing strategy, including a full examination of our promotional strategies."
Meanwhile, the theme park business continues to be a profit generating machine as operating income jumped by 25% to $3.1 bln.
- There's no sign that high inflation or rising interest rates are dampening demand. Rather, business remains very healthy and there's no sign that demand is slowing as quarter-to-date park attendance at both Disney World and Disneyland are pacing above last year.
The main takeaway is that Bob Iger's first earnings report while back in the CEO role was solid and reinstalled some hope that stronger profits and better returns are on the horizon. While the cost-cutting actions and dividend reinstatement are "feel good" stories for investors today, only time will tell if Iger and company can truly transform the streaming business into a powerful earnings generator.
PepsiCo pops after decent Q4 results, raised dividend, and planned share repurchases in FY23 (PEP)
Beverage and snack food giant PepsiCo (PEP +1%) has some pep in its step today after delivering upside on its top and bottom lines in Q4. The company also raised its annual dividend by 10% to $5.06 per share, marking its 51st consecutive dividend hike, and announced plans to repurchase approximately $1.0 bln of shares in FY23, displaying confidence by management in future cash flows.
However, not all items from Q4 popped. PEP expects FY23 earnings of $7.20, a 6.0% jump yr/yr, but below analyst estimates. It also projected a 6.0% expansion in organic revs for FY23, a slowdown from the 14.4% increase posted in FY22. Management explained that its slowing organic revenue growth prediction in FY23 stemmed from the expectation that elasticities will worsen in the back half of the year.
Still, the above deficiencies are not that substantial. Even with PEP building in some loss in its pricing power in 2H23, it still forecasts positive organic revenue growth for the year. The company is also controlling what it can, such as trimming expenses -- it reportedly reduced its headcount at its North American snacks and beverage division headquarters in December.
- PEP's Q4 results were also encouraging. The company grew its bottom line by 9.2% yr/yr to $1.67 per share on top-line growth of 10.9% to $28.0 bln. Despite lapping sound volume gains of 4% and 7% in its global convenient food and beverage businesses, respectively, PEP saw volumes fall just 2% in its foods division in Q4 while keeping beverage volumes steady yr/yr.
- Furthermore, PEP commented that it continued winning market share in many markets globally, a good sign that it is fending off private-label threats and that its price hikes are not spurring a material shift to alternatives from rivals Coca-Cola (KO) and Keurig Dr Pepper (KDP).
- Latin America continued to be an area of strength for PEP, with organic revs jumping 19% yr/yr on a 1% and 2% improvement in food and beverage volumes, respectively. Latin America has not seen volume declines in either business since 1Q21 as a post-COVID rebound continues to buoy consumer demand in the region.
- On the other hand, Europe struggled in Q4, growing organic revs 12%, tying Asia Pacific for the lightest growth, on a 4% and 8% dip in food and beverage volumes, respectively. Volumes have not expanded in either category since 1Q21, spotlighting the extended challenges in the region.
- Inflation also remained a high hurdle but is easing somewhat. Management stated that inflation is still elevated, but not as much as before, reflecting disinflationary forces we have heard mentioned by numerous organizations operating in the consumer staple sector, including Conagra (CAG) and Constellation Brands (STZ).
Overall, PEP's Q4 results were decent and contained many bright spots underscoring solid demand dynamics. However, its cautionary comments on elasticities worsening in the second half of FY23 are concerning. It will be interesting to see if KO and KDP see a similar scenario this year when they report Q4 earnings on February 14 and 23, respectively.
Sonos has investors listening to sweet music on surprise DecQ beat despite headwinds (SONO)
Sonos (SONO +17%) is playing a sweet tune for investors today after the premium audio speaker company reported strong upside with its Q1 (Dec) earnings last night. Speakers make great gifts so the holiday quarter is usually the company's strongest of the year and they did not disappoint. Sonos beat handily on EPS. Revenue grew just 1.2% yr/yr to $673 mln. That may seem small, but analysts were forecasting a 12% decline, so that was a good result. Sonos also reaffirmed FY23 revenue guidance.
- Sonos was facing some pretty stiff headwinds from a macro sense. The company noted that consumer spending has been rather tepid, especially as the pendulum has swung away from goods and towards travel and services. Consumers are focusing spend on activities that they were deprived of during the pandemic. The consumer electronics space, in particular, has experienced softness after three years of very strong growth.
- Investors might be disappointed Sonos did not raise guidance in light of the big upside in Q1. However, Sonos cited these concerns when it explained why it was not increasing guidance at this time. Also, it is early in the fiscal year with three quarters to go, so a lot can happen. Sonos concedes that the macroeconomic environment remains challenging and consumer spending uncertain.
- Circling back to the DecQ results, Sonos built upon its already strong share of the home theater market and saw significant gains in the US, UK, Germany and the Nordics, resulting in its highest share in three years. A tailwind this holiday quarter was a a better in-stock position relative to last year. This allowed Sonos to run its typical focused promotions for the first time in three years. As expected, customers responded in force to these promotions.
- In particular, Sonos also saw a very strong customer response to its sets offering. The company is keenly focused on driving multi-product starts because they have greater lifetime value than single product starts as well as a higher propensity to repurchase over time. On a related note, its speaker sets are very popular in new homes. With rates rising and housing softening a bit, it was good to see this part of Sonos' business perform well.
Overall, this was a very impressive quarter and frankly a surprise in light of the macro headwinds. This is not a great time to be a consumer electronics company. However, Sonos turned up the volume this holiday quarter. While the decision to not raise guidance is a minor negative, the company did say that when consumer spending picks up and the balance of goods/services expenditure stabilizes, Sonos will be well positioned to deliver accelerating top and bottom line growth.
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