Logitech reports broad declines as pre-pandemic buying cycles return
Inventory holding reduced in Q1, hunt for new CEO continues
Logitech has reported shrinking sales across much of its portfolio but the rate of decline is slowing, causing interim CEO Guy Gecht to up sales and profit forecasts for the first half of fiscal 2024.
Revenue for the Swiss and US peripheral maker's Q1 ending June 30 plunged 16 percent year-on-year to $974 million, and profit from operations fell by almost a third to $78 million.
Board member Gecht, who Logitech made interim CEO last month following the exit of Bracken Darrell, described trading conditions as "still challenging."
According to Logitech's earnings slides [PDF], the only category to report sales expansion in the quarter was Tablet accessories, up 7 percent to $70 million. Webcams were down 30 percent to $75 million, Keyboards and Combos fell 20 percent to $181 million, Video Collaboration fell 23 percent to $139 million, and Headsets dropped by a fifth to $37 million.
Gaming was down 9 percent to $266 million and Pointing Devices declined 20 percent to $174 million. The Others section – mostly mobile and PC speakers – dived 35 percent to $31 million.
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This was actually better than initially estimated by Logitech and encouraged the finance department to boost the sales outlook for H1 from between $1.8 billion to $1.9 billion to between $1.875 billion and $1.975 billion. If accurate, the forecast means Logitech's revenues will decline by 14-19 percent as opposed to the previous expected 18-22 percent.
"This solid first quarter highlights steady progress on many important metrics," said CFO Charles Boynton in a statement. "We delivered another quarter of reduced inventory and operating expenses."
Operating expenses fell from $344 million to $297 million. One of the many levers pulled to do this was making 300 of its 8,200-strong workforce redundant.
Logitech reckons it is "making steady progress" in the hunt for a successor to Bracken, who after 10 years running the company left to run VF Corp, maker of Vans sneakers and The North Face line of outdoor clothing.
The pandemic was kind to many tech companies, including Logitech, which soared to record highs on the back of demand from consumers and biz users that suddenly found themselves locked up indoors amid government-imposed lockdowns to slow the rate of COVID-19 infections.
The rise of Logitech came in parallel to a resurgence in the PC market, another area that is now struggling for growth. Normal buying cycles are resuming. ®