After Amazon’s failed acquisition of robot vacuum cleaner manufacturer iRobot, Amazon is facing a sharp decline in sales in the fourth quarter of 2023. The blame lies with the competition, which offers comparable robot vacuum cleaners at cheaper prices. According to Monday’s quarterly report, sales losses are particularly high in the US domestic market.
Announcement
On a yearly basis, iRobot lost nearly $300 million in revenue in one year. Sales fell to $890.6 million in the fourth quarter of 2023, from $1.183 billion a year earlier. as iRobot shows in its quarterly report. This is a decrease of about a quarter. Profit fell from $357.9 million to $307.5 million. However, the truth is that there isn’t much left, as iRobot has to accept a loss of $304.7 million, compared to a loss of just over $286 million a year earlier.
Losses in key markets
Things have been particularly bad for iRobot in its domestic US market. Sales here are down 20% year over year. Things don’t look particularly good for iRobot in other markets either. Sales also fell dramatically in other major markets: in Japan by 19% and in the EMEA market overall by 5%. Things look even worse in 2023. Profits fell 30% in the US, 21% in Japan and 11% in EMEA.
After the failed acquisition deal by Amazon, which was resolved by mutual agreement at the end of January 2024, iRobot is alone in the fight against cheaper robot vacuum cleaners from the Far East. Amazon’s takeover failed due to EU competition authorities. They criticized the close relationship between manufacturer and online seller and feared that this would put competitors at a competitive disadvantage. After all, Amazon paid a sum of $94 million to terminate the acquisition deal.
But not even this money can help iRobot out of the crisis. Company founder Colin Angle, who stepped down as CEO at the end of 2023, leaves a difficult legacy for his successor, former iRobot general counsel Glen Weinstein. He now has to carry out the restructuring of the company and implement an austerity program. This includes, among other things, the layoff of 350 employees by the end of March 2024. However, this will lead to additional costs, which iRobot estimates at up to $13 million. So things don’t look much better in 2024: For the first half of the year, the company expects sales to decline by at least 20% compared to the first half of 2023.
However, shareholders apparently see no real possibility for the company to emerge from the crisis. iRobot’s stock price fell to a 10-year low of 10.60 euros on Tuesday after the company reported quarterly results on Monday.
(olb)
