iRobot Navigates Through Q3 Despite Tariffs

iRobot reported strong third quarter results, with international sales driving revenue growth while tariffs impacted growth in the U.S. market.

Revenue for the third quarter of 2019 ended September 28 was $289.4 million, compared with $264.5 million for the third quarter of 2018. Third quarter revenue grew 25% internationally, highlighted by 27% growth in EMEA and 40% growth in Japan, more than offsetting a 7% decline in the U.S.

Operating income in the third quarter of 2019 was $42.6 million, compared with $37.3 million in the third quarter of 2018. Quarterly earnings per share were $1.24 for the third quarter of 2019, compared with $1.12 in the third quarter of 2018. Net income was $35.5 million versus $31.9 million in the previous third quarter.

“We delivered 9% total revenue growth primarily due to 25% international growth and a large shipment to a major U.S. retailer that was previously planned for the fourth quarter,” said Colin Angle, chairman and CEO of iRobot. “Higher revenue in combination with favorable gross margins and disciplined spending enabled us to deliver strong quarterly operating income and EPS. During the quarter, we executed our planned international product launches of the Roomba s9 and Braava jet m6 mop, made excellent progress with our manufacturing diversification initiative and began undertaking a series of strategic actions aimed at fortifying our robotic vacuum cleaner leadership.”

Regarding how tariffs are impacting the robotic vacuum cleaner market, Angle said, “Despite the severity of U.S. tariffs on robotic vacuum cleaners, and the direct and indirect disruptions they are having on U.S. category growth, we remain committed to delivering exceptional value to consumers and are mobilizing accordingly. Although our third quarter results were strong, sell-through following our late July price increases was suboptimal. Given this outcome and our belief that the robotic vacuum category was at a growth inflection point prior to tariffs, we elected to roll back our pricing to pre-tariff levels on most of our products. We believe this action, in combination with robust investment in R&D and our go-to-market activities, will help us defend our category leadership.”

In addition, during the quarter, former HP executive Keith Hartsfield joined iRobot in the newly-created position of chief product officer.