Logitech Reports Better-Than-Expected Q2 Results, Raises Full-Year Outlook By Investing.com

In its recent Q2 earnings call, Logitech (NASDAQ:) International SA (NASDAQ:LOGI) reported better-than-expected results, despite facing challenges in Asia. The company also increased its full-year outlook for fiscal year 2024, forecasting revenue to fall between $4 billion and $4.15 billion.

Key takeaways from the earnings call include:

• Logitech repurchased 1.2 million shares for $124 million, with $94 million paid in Q2 and the remaining balance to be paid in Q3.
• The company showcased its PRO line gaming products in a video presentation.
• Logitech plans to reduce channel inventory in Q4 and maintain operating expenses at around 25% or less of revenue.
• The company is actively working towards returning to healthy growth, with a focus on video collaboration, personal workspaces, and PC gaming.
• Margins in Q2 were better than expected due to revenue overdelivery, improved gross to net margins, decreased inventory, and cost reductions.
• The company’s search for a new CEO is nearing a decision.

Despite facing a decline in the market, Logitech expects the back half of the year to be similar to the first half in terms of total revenue. The company also noted that Q3 and Q4 may face some margin headwinds due to increased promotions and reduction in channel inventory.

Logitech is witnessing growth in the video conferencing market this quarter and expects this growth to return, although the timeline remains uncertain. The company highlighted the importance of Q3 performance and the return of video conferencing as potential inflection points for their business.

The company also mentioned its focus on geographic growth, particularly in Europe and Asia. In Europe, Logitech reported a strong performance, with gaming, mice, keyboards, and video products performing well. The company attributed this success to their execution and team in Europe.

In the gaming segment, Logitech highlighted that their product portfolio for consoles is aging, but they have a new product launching next year that they believe will bring significant benefits. The company also noted a pull-forward of demand during the COVID-19 pandemic but expects upgrades to happen in the future.

Logitech also discussed its plans for the upcoming December quarter. The company expects promotions to be less than last year but with a mix shift towards more consumer-focused items, which could impact gross margins. The company also mentioned its new site product, stating that it is still in the early stages with single-digit millions of orders, but the reception has been strong. Logitech believes that with the current rate of change, year-on-year growth is likely to occur by mid to the end of next year.

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