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Toys and Electronics Stocks Q1 In Review: Sonos (NASDAQ:SONO) Vs Peers

SONO Cover Image
Toys and Electronics Stocks Q1 In Review: Sonos (NASDAQ:SONO) Vs Peers

As the craze of earnings season draws to a close, here's a look back at some of the most exciting (and some less so) results from Q1. Today, we are looking at toys and electronics stocks, starting with Sonos (NASDAQ:SONO).

The toys and electronics industry presents both opportunities and challenges for investors. Established companies often enjoy strong brand recognition and customer loyalty while smaller players can carve out a niche if they develop a viral, hit new product. The downside, however, is that success can be short-lived because the industry is very competitive: the barriers to entry for developing a new toy are low, which can lead to pricing pressures and reduced profit margins, and the rapid pace of technological advancements necessitates continuous product updates, increasing research and development costs, and shortening product life cycles for electronics companies. Furthermore, these players must navigate various regulatory requirements, especially regarding product safety, which can pose operational challenges and potential legal risks.

The 5 toys and electronics stocks we track reported a decent Q1; on average, revenues beat analyst consensus estimates by 1.1%. while next quarter's revenue guidance was 1% above consensus. Stocks--especially those trading at higher multiples--had a strong end of 2023, but 2024 has seen periods of volatility. Mixed signals about inflation have led to uncertainty around rate cuts, and while some of the toys and electronics stocks have fared somewhat better than others, they collectively declined, with share prices falling 0.7% on average since the previous earnings results.

Weakest Q1: Sonos (NASDAQ:SONO)

A pioneer in connected home audio systems, Sonos (NASDAQ:SONO) offers a range of premium wireless speakers and sound systems.

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Sonos reported revenues of $252.7 million, down 16.9% year on year, topping analysts' expectations by 2.1%. It was a weak quarter for the company, with a miss of analysts' earnings estimates.

“Thanks to the hard work of our team, and the strength of our brand and product portfolio, we delivered results that slightly exceeded our expectations in our second quarter despite the challenging environment,” Sonos CEO Patrick Spence commented.

Sonos Total Revenue
Sonos Total Revenue

Sonos delivered the weakest full-year guidance update of the whole group. The stock is down 8% since the results and currently trades at $16.18.

Read our full report on Sonos here, it's free.

Best Q1: Hasbro (NASDAQ:HAS)

Credited with the creation of toys such as Mr. Potato Head and the Rubik’s Cube, Hasbro (NASDAQ:HAS) is a global entertainment company offering a diverse range of toys, games, and multimedia experiences for children and families.

Hasbro reported revenues of $757.3 million, down 24.3% year on year, outperforming analysts' expectations by 2.2%. It was an exceptional quarter for the company, with an impressive beat of analysts' earnings estimates.

Hasbro Total Revenue
Hasbro Total Revenue

Hasbro had the slowest revenue growth among its peers. The stock is up 4.1% since the results and currently trades at $60.5.

Is now the time to buy Hasbro? Access our full analysis of the earnings results here, it's free.

GoPro (NASDAQ:GPRO)

Known for sponsoring extreme athletes, GoPro (NASDAQ:GPRO) is a camera company known for its POV videos and editing software.

GoPro reported revenues of $155.5 million, down 11% year on year, exceeding analysts' expectations by 6.1%. It was a slower quarter for the company, with a miss of analysts' earnings estimates.

GoPro delivered the biggest analyst estimates beat in the group. The stock is down 16.6% since the results and currently trades at $1.53.

Read our full analysis of GoPro's results here.

Mattel (NASDAQ:MAT)

Known for the creation of iconic toys such as Barbie and Hotwheels, Mattel (NASDAQ:MAT) is a global children's entertainment company specializing in the design and production of consumer products.

Mattel reported revenues of $809.5 million, down 0.6% year on year, falling short of analysts' expectations by 2.8%. It was a solid quarter for the company, with an impressive beat of analysts' earnings estimates.

Mattel pulled off the fastest revenue growth but had the weakest performance against analyst estimates among its peers. The stock is down 6.4% since the results and currently trades at $17.55.

Read our full, actionable report on Mattel here, it's free.

Funko (NASDAQ:FNKO)

Boasting partnerships with media franchises like Marvel and One Piece, Funko (NASDAQ:FNKO) is a company specializing in creating and distributing licensed pop culture collectibles.

Funko reported revenues of $215.7 million, down 14.4% year on year, falling short of analysts' expectations by 2.1%. It was a mixed quarter for the company, with an impressive beat of analysts' earnings estimates. On the other hand, recenue came in below analysts' expectations.

Funko achieved the highest full-year guidance raise among its peers. The stock is up 23.5% since the results and currently trades at $8.45.

Read our full, actionable report on Funko here, it's free.

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