Computer parts maker Logitech looks poised for growth after beating forecasts

 

Jan 23 (Reuters) - Logitech International's ( LOGN.S ) new CEO said on Tuesday the company would work to return to growth as it forecast annual sales would decline less than previously expected and third-quarter earnings would beat expectations. The maker of computer mice, keyboards, and webcams is dealing with customers wrestling with inflation and uncertainty among businesses about how to furnish their offices as they move toward hybrid work.

Shares fell 6% in early trade. The stock hit its highest level since October 2021 on Monday as sales surged as consumers furnished home offices during the COVID-19 pandemic. "A lot of expectations have already been reflected in share prices after external indicators hit their low points and increased guidance for net sales," Research Partners analyst Reto Huber said. 

"Our teams have performed well, continuing our long record of exceptional product innovation... but we won't be satisfied until we return to top-line growth," CEO Hanneke Faber said in a statement. The company, based in Lausanne, Switzerland, and San Jose, California, expects annual sales to decline 6%-7% to $4.2 billion-$4.25 billion. It previously forecast a 9%-12% full-year sales decline. In the quarter to Dec. 31, sales fell to $1.26 billion from $1.27 billion a year ago.

 

Its non-GAAP operating income rose to $248 million in the same period, traditionally the most important quarter of the year.

 

It forecasts non-GAAP operating income to rise 4%-12% to $610 million-$660 million. The company previously expected annual non-GAAP operating income of $525 - $575 million. "Logitech delivered better-than-expected results in the December quarter and sales fell just 1% year-over-year, indicating that the post-pandemic normalization is coming to an end and sales could start to pick up again in a few quarters." Vontobel analyst Michael Foeth said in a note.

 

Faber, the former head of Unilever's ( ULVR.L ) new tab nutrition business, joined Logitech on Dec. 1, replacing longtime CEO Bracken Darrell, who left to join sneaker and apparel company VF Corp ( VFC.N ). A new tab opens.

 

Reporting by John Reville, Ozan Erzene, and Disha Mishra in Bengaluru; Edited by Savio D'Souza, Rashmi Aich, and Barbara Lewis.