The "Pipe" has been around for a long time. I have bought 5 over the years myself. Never could find them in stores, bought them on-line. Good unit, just not Bluetooth. They had been selling the "Vandal" (on-line as well) which was actually a nice bigger size dual speaker unit. Gave away 2 of those this spring. Nice to see they are finally bringing their obsolete inventory down before the Air Raid hits the stores on the 25th (release date)
Thanks Stafford... Any numbers you can share would be helpful. Channel Checks from now into the Holidays have always been a good indication as well.
Beats’ growth has fuelled the overall headphone market in the US, which rose from $1.8bn in 2011 to $2.4bn in 2012, according to NPD, the market research firm. Despite the increasing competition, Beats remains the market leader: it had 40 per cent of all US headphone sales and close to 70 per cent of premium priced headphone sales over the Christmas period. Its 2012 revenues rose from $298m to $519m. Unlisted Beats does not disclose whether or not it makes a profit. These numbers are all include and do not break out 200 dollar plus over ear market only. From the two quarters listed I think they (Beats) will have a net revenue decrease in 2013.
That's good info Safford. What portion of those figures are increases on their Beats Bluetooth Speaker and larger (350 speaker system). Both are fairly new. It looks like they (Beats) are a less then 400 million dollar revenue company if I read your numbers right (which Shocks me as I was led to believe it was much more). Also, that 200 + OVER EAR market is loaded with brands. Everything from high end studio, "DJ", consumer home stereo etc. some of those sets in the 1000 dollar range. The only thing Skullcandy has is the Mix Masters in that range. Walk the isle(s) of shame at a BBY. Beats dominates. The drop may be everyone else (and the mixmaster). I suppose it all depends on the time frame and product mix.
I can say Beats has focused on their "Pill" speaker heavy lately and it takes up a good share of their shelf space in their displays. This is new and would be included in your figures? That in my opinion is part of their sales increase (Beats)
That is a concern however I have noticed a few things at retail. Beats (and others) have not made any significant attemps into the under 100 dollar range yet (Sony is solid there and number one, Skull number 2) Beats would have to cheapen their build quality, cut back on high end advertising, packaging and display costs significantly to get into the range. They would have to burn a HUGE amount of inventory (just like SKUL has but significantly higher cost) They utilize spun aluminum and leather etc. that would have to come down to plastic and "pleather". Essentially retooling. There margins would significantly contract as they are living on high margins they get from their premium price. Their image would suffer as build quality goes down. Remember Skullcandy has actually increased their quality and image over the past several years. Not saying Beats is dead, but there will be some contraction in the market as far as number of companies playing in the sandbox. Hoby also appears to be looking at other audio technology as well as licensing and retail stores. IMO
They are not in the above $100 market - That is HTC/Beats that market has lost 44% sales according yo NDA data. SKUL is the leader in the under $100 earbud market which has a net increase in sales and consumer shift from high end over ear. It also is higher margin. That my friend is a FACT....
Hoby laid it on the line and Institutional buyers love that. He has a plan (and a proven one). Prior management was stuffing the off priced channels to hit targets and that caused the collapse of profitability.
He is investor friendly vs the old regime of Andrus and Wescoat.
Expect positive news as we proceed into Q4 and early next year. New (quality) products, decreased inventory.
Excellent Balance sheet, increased cash flow and cash on hand and favoritable credit line in place.
Astro brand has legs and value.
Once the inventory is burned off, EPS will surprise (Could be Q4, probably Q1)
Hired a VP from Under Armour, Opening Outlet Soores and looking at "High Margin" Licensing Deals.
Cash flow is good, balance sheet is strong. They are well positioned in the market with top retailers.
Expect innovated new products to come out that are not just #$%$ ear buds like other manufactures.
Upgrading website and brand continuity.
High end over ear (read Beats) market is down 44% y/y... SKUL (less excess inventory in that segment) is not going to play in that sandbox.
Hoby has a plan here...
Hoby is setting up for some big upside surprises going forward.
It was interesting that Radio Shack was that "mystery" top 2 customer (We knew BBY and thought it was Target).
Hoby laid the cards on the table.
The bulk of this revenue decrease is off priced channel elimination and Radio Shack as a brand struggling with consumers.
I have been investing and following this company since IPO (ouch) and this call was the best one ever as far as a plan and no BS.
The stock might take a hit tomorrow on the forward guidance (Earnings wise), great time to enter if it does.
Pretty much came in as expected. Interesting to see how the market reacts tomorrow. Remember, the market is looking for a solid plan and Hoby is open and delivering. He never promised anything overnight. I'll address my thoughts in another thread.
Hey Ben, as someone who has held a block of shares since February of 2012 I can add/confirm this:
1) Do NOT expect any news (except for required SEC filings and Analyst releases) for this stock. It just doesn't happen.
2) The recent move from 4.8 after the Q2 Earnings Call to 6.25 as of today is a 23%. This. (Without looking at the charts since IPO) represents the biggest quarterly gains that I can remember.
3). The market has reacted favorably to pretty much ANY earnings data so far for Q3. We have the benchmark set at .02 EPS and 52 million in revenue. The key here is if Hoby can maintain the Q4 estimates and not lower them.
4) insiders have not sold any shares all year (less a little from Andrus - which were planned and before he was dismissed. That says that management sees improvement (time frame is the question)
Just my opinion. I would like to see a 10-15% increase after hours on Wednesday (Break out above 7) and rise to 8 by years end. That would be another 20-25% gain and put us back at break even for the year.
Full year EC in February 2014 we could see 10 (if the broader market doesn't tank on macro news such as fed tightening)... I am less and less thinking that a buyout is going to happen (which probably means it will)...