Walmart-backed Symbotic plummets 35% on delayed annual filing, financial reporting concerns
27/11/2024 14:54
Nov 27 (Reuters) - Shares of warehouse automation firm
Symbotic SYM.O slumped more than 35% in early trading on
Wednesday after the Walmart-backed company delayed the filing of
its annual report citing "material weaknesses" in internal
control over its financial reporting.
Symbotic said it needed more time to assess the financial
impacts of correcting a revenue recognition error and its
effects on the fiscal year ended September 28, 2024.
The company, which went public in June 2022, builds and
operates robotic warehouse systems for retail giants, including
Walmart WMT.N , Target TGT.N , Albertsons ACI.N , and C&S
Wholesale.
As of Jan. 2024, Walmart owned a 14.5% stake in Symbotic,
according to LSEG data.
Last week, Symbotic restated its quarterly financial
statements for fiscal year 2024, saying some of its revenues
were recognized earlier than the actual period that they were
generated in.
Despite initially promising a timely annual report
filing, the company said it had later identified additional
errors affecting key metrics such as gross profit and net
income.
Symbotic expects the total impact of these corrections to
reduce its revenue, gross profit, and adjusted earnings before
interest, taxes, depreciation, and amortization (EBITDA) by $30
million to $40 million for the year.
The company's shares, having fallen about 27% this year
through previous close, were last trading at $24.44. If losses
hold, the stock is on track to erase around $7.59 billion from
its market value of $21.91 billion
Symbotic has a low free float of just over 86 million
shares, or about 15% of outstanding shares, making it
susceptible to wild price swings.
The Wilmington, Massachusetts-based firm also cut its
forecast for the current quarter - it now expects revenue of
$480 million to $500 million, compared with prior expectations
of $495 million to $515 million.
(Reporting by Deborah Sophia in Bengaluru; Editing by Tasim
Zahid)
((DeborahMary.Sophia@thomsonreuters.com;))