Sonos Inc.’s product introductions and marketing improvements helped it top sales expectations in the latest quarter and the maker of speakers is feeling optimistic about the year ahead even as recent tariffs are expected to negatively impact results.

The company posted a fiscal fourth-quarter net loss of $29.6 million, or 28 cents a share, compared with a loss of $1.7 million, or 2 cents a share, in the year-earlier period. Analysts surveyed by FactSet were calling for a 22-cent per-share loss on a GAAP basis. Revenue for the quarter climbed to $294.2 million from $272.9 million and came in ahead of expectations for $289 million.

For fiscal 2020, Sonos

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 expects $1.365 billion to $1.4 billion in revenue, the midpoint of which comes in above the $1.375 billion FactSet consensus. Sonos Chief Executive Patrick Spence told MarketWatch that new product launches and a collaboration with Ikea make him optimistic about the year ahead.

Read: Sonos could be the next hardware acquisition after Fitbit, says analyst

The company expects a one-time negative impact to earnings before interest, taxes, depreciation, and amortization (Ebitda) of $30 million in fiscal 2020, related to the tariffs that went into effect at the start of September. The company projects that about half of that impact will hit in the first quarter of fiscal 2020. Spence said that Sonos “accelerated” previous plans to diversify its supply chain into Malaysia.

Including the tariff impact, Sonos expects $72 million to $82 million in adjusted Ebitda. The FactSet consensus was for $95 million.

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Sonos disclosed that it became more efficient with its marketing spending in its most recent fiscal year, as sales and marketing expenses fell as a percentage of total revenue. The company devoted greater resources to digital advertising and focused more heavily on direct-to-consumer sales. It also boosted its number of registered products per household to 2.9 in fiscal 2019 from 2.8 in fiscal 2018.

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Spence argued that Sonos is benefitting from the proliferation of low-cost devices made by rivals in that these are driving greater interest in the overall category. “Of all new customers in fiscal 2019, if they have Amazon

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 or Google

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 products in their home, 81% had those before they added Sonos,” he said, based on a customer survey. “Amazon and Google pushing cheap devices… helps set the state and acts as a stepping stone.”

The company announced in conjunction with the earnings report that it plans to acquire Snips SAS, a voice artificial-intelligence platform, for about $37.5 million in cash. “We do not plan to replicate the big tech ‘ask anything voice services’ but expect this acquisition will add to our customers’ ease of use and control as we continue to differentiate an end-to-end Sonos experience for our customers,” the company said in its letter to shareholders.

Sonos shares have gained 41% so far this year, as the S&P 500

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 has risen 24%.

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2019-11-20