What goes up must come down: Logitech sales tumble amid PC slump
CEO 'disappointed' by prelim top and bottom lines for latest full quarter
With PC makers cutting prices to spur demand and reduce inventory holdings in the channel, peripherals maker Logitech is facing its own share of commercial problems.
The company did well during the pandemic yet is now feeling the strain in a world that has had its fill of new computers, related gadgets and components.
Today Logitech confirmed this downward trend, with preliminary sales data indicating that revenue for the third quarter of its fiscal 2023 ended December 31 was between $1.26 billion and $1.27 billion, plunging by between 22 to 23 percent year-on-year.
Profit from operations was calculated at between $171 million and $176 million, a tumble of 33 to 35 percent.
"We are disappointed in these preliminary third quarter results," said Logitech president and CEO Bracken Darrell in a statement accompanying the prelims.
"They reflect challenging macroeconomic conditions including a slowdown in sales to enterprise in the quarter. Based on softer than expected third quarter results, and uncertainty in supply availability related to the current COVID outbreak in China, we are reducing our full year outlook."
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The company previously forecast a decline in turnover of between 8 and 4 percent in constant currency for its final quarter of fiscal '23, and non-GAAP operating income of $650 million to $750 million. Following the downgrade, Logitech now estimates sales to fall between 15 to 13 percent and non-GAAP income of $550 million to $600 million.
In a statement that sounds potentially ominous for staff, Darrell added: "We will continue to manage our costs to drive solid operating performance and will provide more detail on our earnings call later this month."
PC shipments swelled to 348 million at the end of 2021 as much of the Western world began working at home to comply with government-imposed lockdowns. Beyond this, demand for mice, keyboards, screens and webcams went through the roof, lifting companies such as Logitech.
That boom is well and truly over, analysts said yesterday. PC sales for 2022 came in at 292.3 million, and although these were preliminary calculations, the figure is unlikely to go up or down by a huge swing.
So just as vendors and their distributors are throwing caution to the wind by reducing PCs prices, Logitech and its legion of third-party sellers might also be looking at different incentives to drum up business. Or it may decide to take some actions to cut its cloth accordingly. ®