Logitech with strong profit growth and increased outlook
Published: Tuesday, Jan 23rd 2024, 06:40
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The computer accessories manufacturer increased profits significantly in the important Christmas quarter despite a slight decline in sales. The outlook was also revised upwards again.
The new CEO Hanneke Faber is generally positive. "We achieved solid results in our third quarter," she is quoted as saying in the press release. "But we will only be satisfied when we achieve sales growth again."
This is because sales fell by 1 percent to 1.26 billion US dollars in the third quarter of the 2023/24 financial year, as Logitech announced on Tuesday night. At constant currencies, sales would have fallen by 3 percent.
Significant increase in earnings
However, as soon as you turn to the results, the direction is completely different. "The results for the third quarter show our focus on operational discipline," says CFO Chuck Boynton.
The gross margin (non-GAAP) climbed to 42.3% after 37.9% in the previous year. The operating result (non-GAAP) also recovered significantly after the dip in the previous year and increased by 22% to 248.2 million dollars. Net profit (GAAP) also recovered impressively, rising by 74% to 244.7 million dollars.
Logitech's figures significantly exceeded analysts' expectations, particularly in terms of earnings and gross margin.
Meanwhile, sales developed differently in the various product categories. For example, sales of gaming accessories fell by 1%, while keyboards and combos increased by 4%. In contrast, demand for video collaboration fell by 2 percent. PC webcams (-9%) and headsets (-11%) were also less in demand.
Outlook raised again
The company raised its guidance for the full year 2023/24 in October. These targets have now been raised again. The Group now expects sales of 4.2 to 4.25 billion dollars, which would only represent a decline in sales of 6 to 7 percent in dollar terms. Non-GAAP EBIT is now expected to be between 610 and 660 million. An increase of 4 to 12 percent is therefore targeted.
Logitech had previously forecast sales of between 4.0 and 4.15 billion dollars, which would have been a decline of between 9 and 12 percent. Adjusted EBIT was expected to land in the range of 525 to 575 million, which would have been a decline of 2 to 11 percent.
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