Zebra Technologies, a prominent barcode scanner manufacturer, has forewarned of a challenging fourth quarter, expecting sales to drop between 32 percent and 36 percent. This downward trajectory is attributed to a slowdown in technology spending against the backdrop of a tough economic environment.
In the third quarter of 2023, Zebra Technologies reported total revenue of $956 million, reflecting a notable decrease of 36 percent. The company’s adjusted earnings stood at 87 cents per share during this period.
The performance of Zebra Technologies was notably affected by declining sales in its Enterprise Visibility & Mobility (EVM) and Asset Intelligence & Tracking (AIT) segments. Sales in the EVM segment for the third quarter amounted to $632 million, down from $936 million in the prior year. Similarly, the AIT segment reported sales of $324 million for the third quarter of 2023, compared to $442 million in the previous year.
The company’s customer base includes notable names such as the U.S. Postal Service and Walgreens Boots Alliance. Zebra Technologies had previously expressed concerns about an impending impact from reduced demand and increasing inventory levels among its clients, particularly in the retail, e-commerce, and logistics sectors.
CEO Bill Burns acknowledged the challenges faced by the company, stating, “While we believe demand trends are leveling, we are not seeing signs of a market recovery based on customer behavior, and remain cautious in our planning for the remainder of the year and the first half of 2024.”
In response to these challenges, Zebra Technologies initiated a series of cost-cutting measures during the second quarter, including a slowdown in hiring and downsizing of its offices. These efforts were aimed at mitigating the effects of soft demand across its end-markets.
Despite the headwinds, the company expects annual cost savings of approximately $100 million, up from the initially targeted $85 million, arising from its cost-reduction initiatives. These measures are part of Zebra Technologies’ strategy to navigate the current economic challenges and maintain its financial resilience.
The company remains committed to adapting and optimizing its operations to align with market conditions, ensuring its continued strength in providing barcode scanning solutions and enterprise technologies.
