Logitech Stock Is Down Because the Company’s Pandemic-Driven Growth Is Slowing
Logitech reported sales of $1.31 billion, up 2% from a year earlier, for its fiscal second quarter.
For its fiscal second quarter ended Sept. 30, Logitech (ticker: LOGI) reported sales of $1.31 billion, up 2% from a year earlier, though flat sequentially. Sales were slightly above the Street consensus at $1.27 billion. Non-GAAP earnings were $1.05 a share, about a nickel below Street estimates. Gross margin in the quarter was 42%, down 370 basis points from a year ago.
Logitech shares fell 3.9% to $85.95 in recent Tuesday trading.
Logitech’s growth had surged during the pandemic, as consumers outfitted their home offices with new webcams, microphones, and other peripherals—but the company now faces extremely difficult earnings comparisons. The latest quarter’s growth slowdown, while not a big surprise, compares with 66% year-over-year sales growth in the June quarter. Logitech reiterated its forecast for flat year-over-year revenues for the March 2022 fiscal year, give or take 5%. The company did not provide specific December quarter guidance.
In an interview with Barron’s, CEO Bracken Darrell said that he “felt good about the quarter,” despite ongoing supply chain challenges. While Logitech has managed through component shortages better than most of its peers, it remains “challenged on logistics,” he said, with tight capacity and higher costs tied to air and sea shipping. “We’re not gloom and doom about it at all, but it will have an effect.”
Logitech said sales grew 13% for pointing devices and 15% for keyboards in the September quarter. Webcam sales fell 9% from a year ago, but were triple the level from two years ago. Gaming products sales were up 9%, compared with an 84% increase a year ago in the middle of the pandemic. Mobile speakers sales were down 11%, and audio and wearables were down 15%. Sales rose 9% in Asia, but flat in Europe and off 1% in the Americas.
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