iRobot Sales Surge 43% Fueled By Roomba Vacuum Online Sales

iRobot quarterly sales jumped 43% blowing past the Street consensus as consumers stocked up on its robot vacuum cleaners during the coronavirus pandemic. Shares closed 5.1% higher on Tuesday.

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iRobot (IRBT) reported third-quarter revenue of $413.1 million, beating analysts’ expectations by about $98 million. The robot maker said that growth was primarily driven by an 86% increase in premium robot (list price of $500 or higher) revenue, as well as 36% overall unit growth. Online orders surged by about 70% and made up 60% of quarterly sales. Direct-to-consumer revenue of $35 million soared about 155% from the prior year’s third quarter.

Non-GAAP net income per share rose to $2.58 in the reported quarter from $1.50 a year ago, exceeding the Street consensus by $1.58.

“The pandemic continues to shine a light on how our robots can help individuals and families keep their floors clean while freeing them to spend their time doing the other things in their lives that they need or want to do. Consumer demand for our premium Roomba and Braava robots remained robust during the third quarter,” iRobot CEO Colin Angle said. “As a result of our excellent third-quarter 2020 performance, sustained sell-through trends, the extension of our tariff exclusion until year-end and a range of exciting opportunities ahead, we now expect to deliver strong full-year 2020 results with annual revenue, gross margin, operating profitability and EPS all on course to exceed our original 2020 targets.”

For the fiscal year ending January 2, 2021, iRobot forecasts revenue of $1.365 billion to $1.375 billion compared with the $1.23 billion expected by analysts. EPS is estimated at $3.43 to $3.53.

As of September 26, the company’s cash, cash equivalents and short-term investments were $357.3 million, up from $242.3 million as of June 27, 2020 and $256.4 million as of December 28, 2019.

Shares in iRobot have been on a stellar gaining streak, spiking 90% so far this year, while analysts are sidelined on the stock for now. The Hold consensus breaks down into 2 Holds, 1 Sell and 1 Buy. That’s with an $82.50 average price target indicating 14% downside potential lied ahead.

Ahead of the results, Needham analyst James Ricchiuti this week reiterated a Hold rating on the stock, noting that it will be increasingly difficult to “deliver upside surprises over the remainder of 2020”.

“While IRBT will enjoy the benefit in the 2H from the extension of List 3 tariff exclusion for robotic vacuums through year-end, further tariff relief is unlikely in 2021, when robotic vacuums are likely to be once again subject to 25% tariffs,” Ricchiuti wrote in a note to investors. (See IRBT stock analysis on TipRanks)