Logitech's sales plunge 20% as demand for PCs slows
Peripherals-maker CEO lowers forecast, citing ongoing war in Ukraine as cause of uncertainty
Peripheral maker Logitech is ending its fiscal 2022 on something of a low point, with the pandemic-induced sales growth extravaganza coming to an abrupt end, and forecasts for business this year lowered due to the conflict in Ukraine.
The Swiss-based organization was in the right place at the right time when citizens across swathes of the world were forced to work, study and play at home: demand for mice, keyboards, headsets, etc went through the roof.
Growth rates Logitech achieved during those lockdown years, when the PC became the centre of most people’s universe, were impressive but seemingly impossible to sustain. For its Q4 ended 31 March [PDF], company revenues plunged by a fifth year-on-year to $1.23 billion and operating profit dived 52 percent to $108.2 million.
Logitech finished the prior financial year with record revenue of $5.25 billion, up 76 percent and closed out this latest 12 months of trade ended 31 March with a new sales peak of $5.48 billion, up 4 percent year-on-year. Operating profit was $744 million, down 32 percent.
"This year, we sustained our scale," said Bracken Darrell, Logitech president and CEO in statement. He also pointed out the company beat its own original profit guidance by $100 million and grew for a ninth consecutive year.
PC shipments shot up during the pandemic, helping to lift an entire ecosystem, including peripherals manufacturers. 341 million PCs were shipped into channels globally in 2021, although growth was more modest in Q1 2022. IDC estimated sales-in to have declined 5.1 percent.
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Logitech said pointing devices grew 14 percent in Q4 and 3 percent for the year; keyboards and combos jumped 8 percent for the quarter and 22 percent for the year. PC webcams decreased 40 percent in Q4 and fell 8 percent for the whole year. Gaming was up nominally in the quarter and grew 17 percent for the year.
Video collaboration, smart home, and mobile speakers all recorded declines for Logitech’s last quarter and the entire fiscal year.
In terms of geography, sales were down in EMEA and Asia Pacific but up in the Americas.
Bracken said Logitech is "riding secular growth trends in hybrid work, video collaboration, esports and digital content creation. We'll continue to deliver against those with agility, operational excellence and a diverse, innovative portfolio."
The CEO said he's "excited for the future" – however Logitech's near term outlook for sales was clipped today to 2 to 4 percent growth in constant currency, down from mid-single digits guidance previously given. Non-GAAP operating income was reduced to between $875 million to $925 million from between $900 million and $950 million.
The company said in a statement:
"We reduced our Fiscal Year 2023 outlook, removing the estimate of annual sales and profits that would have been generated in Ukraine and Russia. This reflects the current, uncertain environment in which the war in Ukraine continues without sign of resolution in the near term. We continue to monitor the Russia/ Ukraine situation and broader, potentially challenging, market conditions." ®