iROBOT Corporation Q2 2009 Earnings Call Transcript

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2009-07-23 11:09:23.0

Tags: iRobot Corp., Europe, Call Transcript, Needham & Co., Earnings, Robots, Sales Strategy, Sales Force Management, Emerging Technologies, Sales, Seeking Alpha

Question-and-Answer Session

Operator

(Operator Instructions) Your first question comes from Jim Ricchiuti - Needham & Company.

James Ricchiuti Needham & Company

You appear to be understandably cautious with respect to the domestic holiday season coming up. I wonder, how do you see the international business, Colin? You don't have as much experience with the home robot business overseas as it relates to the holiday season. Can you give us some sense what you're seeing, what you're assuming for that business now that it's a bigger part of your consumer revenue?

Colin Angle

Well, we've been in international markets for some time. Certainly, they have taken off over the past 18 months, and that's exciting for us. But what we've modeled in our plan for the year is a continuation of the solid and strong performance we saw in the first half of the year, but we haven't assumed a tremendous improvement over the rates of sales that we're currently enjoying. So we're trying to be cautious about that, too, because the recession in Europe is on the upswing not the downswing, as far as we can still, and we want to make sure that we protect ourselves.

James Ricchiuti Needham & Company

And was the business down in the U.K., Colin, in the quarter?

Colin Angle

No, it's been up. We talked about U.K. being impacted, but throughout the rest of Europe the demand for this product entering the marketplace and the job our distributors have being doing driving sales have outpaced the negative impact of recession, so we continue to be up.

Operator

Your next question comes from Barbara Coffey - Kaufman Brothers.

Barbara Coffey Kaufman Brothers

Yes, as you take a look at Europe and sort of the home robots, are there certain patterns of buying behavior, if you're doing it differently here than in the U.S.? Is it because they don't have the same kind of big box stores in the same way? Could you speak a little bit about sort of how the sales process might be different overseas?

Colin Angle

We actually have adopted a strategy where we use local distributors to help form our distribution strategy country-by-country and that's important because, as you point out, each country has different ways of buying this type of product.

For example, in Germany we're getting a lot of traction in sales through very small boutique stores. It's one of the only countries left on the planet where that is an effective way of moving volumes of product, where you have sort of mom and pop electronic stores.

 

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