Logitech International (LOGN.S), a manufacturer of computer keyboards and webcams, boosted its earnings and reduced the rate of its sales decline during its second quarter, which ended on September 30. As a result, the company raised its outlook for the entire year on Tuesday.
The Swiss-American firm, which enjoyed a strong surge as consumers stocked up on its equipment to work from home, added that it was closer to finding a new CEO after Bracken Darrell departed in June to take control of Vans shoe maker VF Corp. (VFC.N.). Darrell left the company in June to take leadership of Vans sneaker manufacturer VF Corp.
Both events are expected to benefit the firm, whose chairman, Wendy Becker, was criticized by Daniel Borel, one of the company’s co-founders, a month ago. The firm’s share price, which was 61.9 Swiss francs after trading was completed on Monday, was projected to increase 8.2% in premarket trading on the Zurich stock exchange.
“We made great progress toward a return to growth and exceeded our pre-pandemic profit levels,” said Guy Gecht, who is currently serving as interim CEO.
Logitech’s revenues declined in the three months leading up to September 30, as the company continued to lap strong comparisons from the preceding years. However, the decline in sales during the second quarter was just 8%, bringing the total to $1.06 billion, which was only half the pace of the decline in sales during the first quarter, which was 16%.
This resulted in a decrease in revenue for the first half of the firm by 12%, which was better than the 19%–14% drop that Logitech had anticipated. While this was happening, Logitech reduced expenses by spending less on logistics and promotions, which led to increased profits.
Logitech’s non-GAAP operating income for the second quarter increased by 17% to $183 million, bringing the amount for the year’s first half to $292 million. This result exceeded the company’s $180 to $220 million projection.
As a direct consequence of this development, Logitech, which also produces mobile speakers, headsets, and computer mice, raised its projection for sales and profits for the entire year. Its previous expectation of full-year sales was $3.8 billion to $4 billion, but it now anticipates revenues of between $4 billion and $4.15 billion. According to Logitech’s statement, the company anticipates its full-year non-GAAP operating income will be higher than its prior prediction, falling between $525 million and $575 million.
Following the announcement of the results, Bank Vontobel increased its target price for Logitech from 71 to 77 Swiss francs, stating that the company “continues to execute with high precision on a proven and strong business model and financial model.”
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