iRobot Q1 Impacted By Pandemic

iRobot’s first quarter performance was impacted by the global spread of the coronavirus, as the company reported a sales decline and cost reduction actions.

Revenue for the first quarter of 2020 ended March 28 was $192.5 million, a decrease of 19% from $237.7 million in the first quarter of 2019. The largest driver of the shortfall against the company’s targets for first quarter 2020 revenue was the inability to completely fulfill anticipated first quarter demand for certain premium robots due to design-driven engineering and supply chain challenges that were unexpectedly complicated by the impact of COVID-19 on the company.

The first quarter 2020 revenue performance reflected declines of 28% in the U.S., 14% in Japan and 11% in EMEA from the first quarter of 2019.

Operating loss for the first quarter of 2020 was $20.2 million, compared with operating income of $22.3 million in the first quarter of 2019. Net loss per share was $0.64 for the first quarter of 2020, compared with net income per share of $0.78 in the first quarter of 2019.

iRobot recently initiated a series of cost-reduction actions, which are expected to drive approximately $30 million in net savings during 2020. The company has eliminated approximately 70 positions, primarily within its research and development organization. The headcount reduction represents approximately 5% of its workforce. In addition, iRobot furloughed 14 sales and marketing professionals involved in supporting the company’s European in-store retail activities and reduced the scope of its 2020 hiring plans.

Colin Angle, chairman and CEO, iRobot, said, “The spread of novel coronavirus (COVID-19) across the globe impacted our first-quarter revenue performance as we saw disruptions to our sales and manufacturing supply chain activities and it also constrained our ability to address those challenges. The impact of lower-than-expected revenue on profitability was softened by better-than-expected gross margins associated with favorable mix shifts and pricing, combined with adjustments to short-term incentive compensation, delayed implementation of certain marketing activities and shifts in the timing of certain R&D programs. We remain focused on prioritizing the health, safety and productivity of our workforce, addressing fluid near-term customer demand, managing our cost structure and positioning our business to thrive once market conditions improve.”

On the company’s outlook moving forward, Angle noted, “Cleaning products are increasingly top of mind with consumers today, although the uncertain economic environment now facing consumers is likely to weigh heavily on when, where and whether they will buy a new Roomba or Braava robot. Looking ahead, we expect that our near-term revenue will be challenged as traditional retailers work down existing inventory, prioritize demand for essential products and manage through reduced operating hours, limited foot traffic and temporary store closures. Nevertheless, we have been encouraged by strong growth over the past several weeks in e-commerce sales, modestly better-than-expected sell-through trends in domestic retail stores, and solid overall demand for our Roomba i7 and s9 robot vacuums and Braava jet m6 robot mops. Although our longer-term visibility is suboptimal, we remain optimistic for improved second-half performance versus the first half.”