- Atomos (AMS) withdraws its financial guidance after reporting its Black Friday promotional period failed to meet sales expectations
- The company has historically relied on this promotional period as a “material contributor” to its sales in the first half of the financial year
- The company believes the reduction in sales is in line with global economic uncertainty and that other channel partners are experiencing similar reductions in the consumer and electronics sectors
- The company is now taking initiatives to manage costs, aiming to cut its fixed annual cost base by 30 per cent by the end of the financial year to reduce its break-even point to $60 million
- AMS shares dropped 20.45 per cent to trade at 7 cents at 3:56 pm AEDT
Atomos (AMS) has withdrawn its financial guidance after reporting its Black Friday promotional period failed to meet sales expectations.
The company has historically relied on this promotional period as a “material contributor” to its sales in the first half of the financial year.
Atomos said the weaker-than-expected Black Friday period was an example of continued sales volatility, which it attributed to global economic uncertainty.
The company said feedback from channel partners suggested this is part of a wider reduction in sales in the consumer and electronics sectors, including professional video and imaging.
Atomos said it was now taking initiatives to manage costs, with an aim to cut back its fixed annual cost base by 30 per cent by the end of the financial year.
The plan is to reduce its break-even point to $60 million in annual sales.
As part of the company’s plans to strengthen its cash position, the Atomos Cloud studio subscription services and eCommerce channel are expected to launch early next year, the latter of which Atomos believes could result in “sales consistent with previous highs”, subject to market conditions.
However, the company said it was too early to determine this “with confidence”.
“We remain very confident about the outlook for our expanded product range and new cloud services that have already garnered significant interest from a host of customers in new markets, validating our connected product and cloud strategy,” said Atomos CEO Trevor Elbourne.
“Uncertainty around how long weak global conditions persist means we must judiciously prepare ourselves for potentially softer sales this financial year and aggressively manage the areas in the business we can control.
“This will leave us in a stronger position, enabling us to generate much stronger earnings than last year from a similar revenue base once markets return to normal.”
AMS shares dropped 20.45 per cent to trade at 7 cents at 3:56 pm AEDT.