Logitech cuts sales outlook after Q3 miss

LOGITECH International on Thursday (Jan 12) reported lower earnings and sales between October and December and cut its sales outlook, citing a difficult economic backdrop and supply-chain uncertainties linked to China’s Covid-19 outbreak.

Shares of the Swiss-American maker of keyboards, mice and headsets were down 16.6 per cent in Zurich, pre-market indications from Julius Baer showed.

Logitech said that its preliminary third-quarter GAAP (generally accepted accounting principles) operating income fell around 35 per cent year on year, to between US$171 million and US$176 million. Its sales were down 22 per cent to a figure between US$1.26 billion and US$1.27 billion.

The company expected its year-to-March sales to fall between 13 per cent and 15 per cent on a constant-currency basis. Its earlier outlook was for a drop of 4 per cent to 8 per cent.

Chief executive Bracken Darrell said the weaker-than-expected results reflected “challenging macroeconomic conditions, including a slowdown in sales to enterprise customers in the quarter”.

The company was cutting its outlook based on the results, and on “uncertainty in supply availability related to the current Covid outbreak in China”.

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Last year, it recorded its highest second-quarter sales on the back of strong demand for home-office products and computer-gaming devices, amid Covid restrictions that kept consumers at home.

But this year, it has faced a slowdown as many lockdowns have been lifted and consumers have also become more downbeat. Higher component and transport costs have also been eating into profit margins. REUTERS