In a sign the market is softening, leading accessory, gaming and communication Company Logitech has reported a 22 per cent fall in sales for the last quarter after surging during COVID lockdowns. Their shares rose 3.41 per cent after the results were announced.
Overnight, the Swiss business reported that sales for the last quarter came in at US$1.27 billion. Management say the result “Reflects the challenging macroeconomic environment” facing brands today operating in the consumer electronics market.
Management claim gaming sales declined 16 per cent, and video collaboration sales 21 per cent as staff returned to working from the office.
Sales of keyboards & combos sales declined 22 per cent and 17 per cent, while pointing devices sales declined 14 per cent.
Bracken Darrell, Logitech president and chief executive officer says, “These quarterly results reflect the current challenging macroeconomic conditions, including currency exchange rates and inflation, as well as lower enterprise and consumer spending.”
He adds, “With these external headwinds, we continued to aggressively manage our costs in the quarter, while at the same time growing market share in key categories. Our long-term strategies remain unchanged, and we remain committed to the growth trends that fuel our business.”
operating profit was down 33 per cent to US$177 million, compared to $263 million in the same quarter a year ago.
Logitech’s Fiscal Year 2023 outlook has been adjusted to between negative 15% and negative 13% sales growth in constant currency, and between $550 million and $600 million in non-GAAP operating income.
Credit: Logitech
The Swiss-US company says consumers also spent less during the quarter and concentrated their purchases on weeks when sales promotions took place.
Darrell declined to say what he thought would happen with consumer spending, saying Logitech would give its latest guidance at its investor day in March.
The previous year 2021-22 was strong for Logitech, as the pandemic-induced remote working scenario led to an increased demand for its products.
The problem for the business is that more and more people are heading back to the office, and demand for home office supplies is falling, claim analysts.
Also, the fear of an imminent global recession and rising inflation has further shrunk the market Logitech competes in.
