Swiss hearing aid maker Sonova resumes supplying Costco, source says
28/10/2024 14:39
Oct 28 (Reuters) - Swiss hearing aid maker Sonova
SOON.S is resuming supplies to Costco COST.O , a source with
knowledge of the matter told Reuters on Monday.
Its shares rose as much as 7% to their highest in more than
two years.
The product to be sold at Costco, a prescription hearing aid
by the name of Sennheiser Sonite R which was specifically
designed for the retailer, will initially be available in 107
locations in the United States, with a gradual expansion
expected in the future, the source said.
The source added that it is typical for Costco to test sales
of a product in a number of warehouses before a broader roll
out.
The comments come after analysts at J.P. Morgan wrote in a
note to clients that online reports on Friday had said Sonova
was expected to replace Rexton as a supplier to Costco, after
the Swiss company's previous agreement with the retailer was
discontinued in 2022.
"I think there is the expectation already in terms of what
the analysts are writing, that this will be, I mean, a gradual
ramp-up," the source said.
J.P. Morgan analysts deemed the move "a positive surprise",
noting Sonova and other hearing aid management teams had
previously downplayed the possibility of a near-term return to
Costco.
Sonova had previously been a supplier under Costco's own
brand Kirkland Signature, the analysts noted.
"We do not believe re-entering Costco on the branded side
will be worth as much as the previous KS contract, as Sonova
will be competing with Demant and GN rather than being the sole
supplier of KS," the analysts said.
The official launch of the Sennheiser product for Costco
will come during Monday, the source said.
Costco was not immediately available for comment, while a
spokesperson at Sennheiser Consumer division declined to
comment.
In 2023, the company had reported a hit to its full-year
2022-23 profits from the loss of a big U.S. customer, whose name
it did not disclose.
Sonova makes hearing aids under a number of brands, such as
Phonak, Unitron, Hansaton and Sennheiser.
(Reporting by Elizaveta Gladun and Linda Pasquini; Additional
reporting by Neil J Kanatt; Editing by David Holmes)
((Elizaveta.gladun@thomsonreuters.com))