In short: Logitech has shared preliminary financial results for the holiday quarter, which more or less reflect the broader PC market, and this is not good news for investors. For the quarter ended December 31, 2022, Logitech recorded preliminary net sales of $1.26 billion to $1.27 billion. This is 22-23% less in US dollars compared to the same period a year earlier.
Operating profit ranged from $171 to $176 million, which is 33-35% less than the $263 million received in the same quarter a year ago.
Logitech CEO Bracken Darrell said they were disappointed with the preliminary results, adding that they reflected challenging macroeconomic conditions, including slowing sales to corporate customers. Based on these softer numbers and the continued uncertainty in the supply chain due to the ongoing Covid outbreak in China, the peripheral manufacturer is lowering its annual forecast.
Logitech’s forecast for fiscal year 2023 included $650 million to $750 million in non-GAAP operating profit and negative eight to negative four percent sales growth. The adjusted forecast now ranges from $500 to $600 million, as well as negative 15 to negative 13 percent sales growth.
The Swiss manufacturer of peripherals was one of several businesses that benefited from the pandemic. As companies have switched to work-from-home models to stay afloat during lockdown, sales of PCs and related accessories such as keyboards and mice have skyrocketed. Since the pandemic is mostly over, the demand for PCs and accessories has decreased significantly.
On this news, Logitech shares fell by about 20 percent.
Earlier this week, IDC reported that global shipments of traditional PCs fell 28.1% in the holiday quarter compared to the same three-month period in 2021. In fact, this decline was comparable to the fourth quarter of 2018, when Intel was struggling with CPU inventory.
IDC expects some segments of the PC market to start recovering by the end of this year, with broader growth to follow in 2024.