Allegro MicroSystems, Inc. (ALGM) experienced a 5.46% decline in its stock price during intraday trading on May 20, 2024, as the company grappled with the impact of inventory rebalancing efforts across its automotive and industrial markets.
In its fiscal first-quarter 2025 earnings call, Allegro reported a 40% year-over-year decline in sales to $167 million, primarily driven by the company's intentional under-shipping to distributors and automotive customers. This strategic move aimed to help these partners work down excess inventory levels accumulated during the industry's supply chain disruptions.
Vineet Nargolwala, Allegro's President and CEO, acknowledged the progress made in reducing inventories, stating, "We believe that inventory rebalancing in automotive will continue into our second quarter, and customers are returning to a more normal ordering pattern, which we expect to drive low double-digit growth in the second quarter sales."
Comments