The maker of Roomba has ‘substantial doubt' about surviving
iRobot (IRBT), a maker of robotic vacuum cleaners, has 'substantial doubt about the company's ability to continue,' it revealed in its quarterly earnings report Wednesday. The stark warning torpedoed the company's stock 30% lower in premarket trading.
The Massachusetts-based company also said its board is exploring a 'strategic review of alternatives for the business' that could portend a sale and refinancing of its mounting debt.
The news comes about 14 months after Amazon abandoned plans to buy the company because of concerns from European Union's regulators, who threatened to block the deal. Soon afterward, iRobot founder Colin Angle departed the company, its stock cratered and the company laid off about half of its employees.
iRobot has been working to turn things around. This week the company released eight new Roombas, marking the largest product launch in the company's 30-year history. iRobot hopes the new products will help boost its revenue, which plunged 44% in the fourth quarter compared to a year earlier.
However, the company warned Wednesday that there's 'no assurance' the new products 'will be successful due to potential factors, including, but not limited to, consumer demand, competition, macroeconomic conditions, and tariff policies.'
CEO Gary Cohen, however, remains optimistic. In the earnings release he said 'this strong pipeline of breakthrough new products' should improve profit margins compared to earlier product lines and 'should begin to support year-over-year revenue growth in 2025.'
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