iRobot Corporation (IRBT Quick QuoteIRBT - Free Report) reported second-quarter 2023 adjusted loss of $1.42 per share. The quarterly loss compares unfavorably with the year-ago quarter’s number.

Revenue Details

iRobot generated revenues of $236.6 million in the reported quarter, beating the Zacks Consensus Estimate of $224 million. On a year-over-year basis, revenues decreased 7.4% due to lower orders and increased pricing competition.

Sales derived from premium and mid-tier robots accounted for 84% of IRBT’s total robot revenues, higher than 83% in the year-ago quarter.

Sales generated from the e-commerce platform (representing 71% of the reported quarter’s revenues) increased 6% year over year. The e-commerce platform includes online sources of retailers, IRBT’s app and website, as well as e-commerce websites. Direct sales to consumers were up 1% year over year to $40 million.

Total product units shipped in the quarter totaled 831 thousand, reflecting a year-over-year decrease of 3.9%, while average selling prices increased 4.8%. For vacuum products, revenues of $222 million reflected a decline of 1.3% from the year-ago quarter. Units shipped totaled 776 thousand, up 1.3% from the prior-year quarter. Revenues from mopping products decreased 50% to $15 million. Units shipped were 55 thousand, down from 99 thousand recorded in the year-ago quarter.

On a regional basis, iRobot sourced 55.4% of revenues from domestic operations and the rest came from the international arena. Domestic revenues totaled $131 million, reflecting a 6% decline from the year-ago quarter. International revenues declined 8.9% to $105.6 million.

Margin Profile

In the quarter under review, iRobot’s cost of revenues increased 5% to $183.1 million. Adjusted gross profit was $54.9 million, down 33.8% year over year, while the adjusted gross margin decreased 930 basis points to 23.2%.

Research and development expenses were $38 million, down 9.5% year over year. Selling and marketing expenses decreased 27% to $55.5 million. General and administrative expenses were $31 million, up 17.2% year over year.

In the second quarter, iRobot recorded an adjusted operating loss of $50.5 million compared with adjusted operating loss of $53.3 million in the year-ago period. The adjusted operating margin was (21.3%) versus (20.9%) in the year-ago quarter.

Balance Sheet and Cash Flow

While exiting second-quarter 2023, iRobot had cash and cash equivalents of $58 million compared with $117.9 million recorded at the end of fourth-quarter 2022. Total long-term liabilities were $52 million compared with $63.5 million recorded at the end of fourth-quarter 2022.

In the first six months of 2023, iRobot used net cash of $58.1 million for operating activities compared with net cash of $186.5 million used in the prior-year period. Capital used for purchasing property and equipment totaled $2.5 million, decreasing 48.6%.

Zacks Rank & Stocks to Consider

IRBT currently carries a Zacks Rank #3 (Hold). Some better-ranked companies from the Industrial Products sector are discussed below:

Caterpillar Inc. (CAT Quick QuoteCAT - Free Report) presently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks.

CAT’s earnings surprise in the last four quarters was 18.5%, on average. In the past 60 days, estimates for Caterpillar’s earnings have increased 7.3% for 2023. The stock has gained 48.3% in the past year.

A. O. Smith Corp. (AOS Quick QuoteAOS - Free Report) presently carries a Zacks Rank #2 (Buy). AOS’ earnings surprise in the last four quarters was 10.5%, on average.

In the past 60 days, estimates for A. O. Smith’s earnings have increased 2.6% for 2023. The stock has gained 18.7% in the past year.