Logitech Shares Jump 11% Despite Slower Q2 Sales Growth
Logitech sales dropped 12% in Q2 FY ’23, 7% in constant currency, to $1.15 billion, reflecting a “challenging macroeconomic environment," the company reported Monday. Operating income dropped 29% year on year to $127 million for the quarter ended Sept. 30.
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After several difficult quarters of sales growth decline after a surge of COVID-19-related sales on work-at-home trends, Logitech’s shares jumped Tuesday, closing 11% higher at $50.64. The company maintained guidance from July and announced over 20 new products for the holiday sales season, while teasing a conference room product for next year. On a Tuesday earnings call, CEO Bracken Darrell said the new products reflect long-term trends of hybrid work, video everywhere, gaming and digital content creation.
Darrell highlighted Logitech Sight, an AI-powered camera for business customers that’s designed to “make hybrid work work” by creating what he called an equitable experience for remote and in-room participants. Due next year at $1,999, Sight will provide a “more natural video perspective," capturing conversations and nonverbal communication as they happen, he said. It’s an example of Logitech’s increasingly software-based focus, he said, and it's "additive" to the business-to-business product line.
For gamers, Logitech bowed for the holiday season G Cloud, a device for cloud gamers that allows them to access PC and console games “from nearly anywhere.” Gamers want “on-demand access to their favorite games” wherever they are, Darrell said.
The company slashed its financial outlook on a July earnings call (see 2207260040), citing macroeconomic headwinds. Chief Financial Officer Nate Olmstead reaffirmed the outlook Tuesday, projecting a 4%-8% decline in sales growth in constant currency for the fiscal year. The company announced Olmstead is leaving Logitech but plans to stay on during the transition as the company searches for a new CFO.
Video collaboration sales grew 2% year on year, driven by conference room cameras, peripherals and headsets, management said in prepared remarks. Video conference room cameras and peripherals were up 30%, but business-oriented webcams fell more than 30% year on year, it said. PC webcam sales dropped 33% from “pandemic highs,” it said.
Results in pointing devices reflected currency exchange headwinds, with the segment falling 2% in dollars but rising 3% in constant currency. Gaming and Keyboard & Combos sales slid 10% year on year due to weaker market conditions in China and Europe. Growth in simulation products was offset by declines in PC and console gaming. The tablet and other accessories category declined 29% year on year.
In audio, mobile speaker sales grew 6% year on year, Logitech said. Despite the company’s continued shift away from the mobile speaker category, it launched the Wonderboom 3 and Hyperboom Bluetooth speakers in the quarter. Audio and wearables tumbled 22% year on year, the company said.