Information Technology Logitech sets higher targets after good first quarter

Logitech has raised its outlook after a strong start to the 2024/25 financial year. Improved demand in almost all product categories has kept the computer accessories manufacturer's business on course for growth.

Logitech generated sales of just under 1.1 billion US dollars between April and June, according to a press release issued on Tuesday. This was 12 percent more than in the same period last year.

With the exception of webcams, the most important product categories grew. Demand was also good from a regional perspective. However, Logitech made particularly strong gains in the EMEA region.

However, it is above all the profit development that was significantly better than expected. Here, operating profit (EBIT, non-GAAP) adjusted for costs in connection with acquisitions and restructuring increased by 67 percent to 182 million dollars. The corresponding net profit amounted to 174.6 million (+69%). Logitech attributes this to improved demand, strong gross margins and cost discipline.

The tech company increased its EBIT according to GAAP by 96 percent to 153 million dollars, while it more than doubled its unadjusted net profit to 141.8 million dollars.

Outlook raised

Logitech has thus clearly exceeded analysts' forecasts, particularly in terms of profit. Looking ahead, the company has subsequently raised its outlook. The company is now targeting sales of between 4.34 and 4.43 billion US dollars, which would correspond to an increase of between 1 and 3 percent. Previously, Logitech had assumed growth of between 0 and 2 percent.

Logitech has raised its forecast for non-GAAP operating profit to a figure between 700 and 730 million US dollars, up from the previous forecast of 685 to 715 million US dollars. In percentage terms, the Group thus expects an increase of between 0 and 4 percent. Previously, Logitech had assumed that profits could rise or fall by 2 percent.

While the Group continues its return to sales growth, it also emphasizes the ongoing risks in the press release. "The positive business momentum is taking place against the backdrop of an uncertain and volatile global economy," CEO Hanneke Faber is quoted as saying in the press release.

Despite the good performance, the company remains pragmatic when it comes to future risks and uncertainties. "These include the resilience of general consumer demand, the level of B2B and IT spending, stubborn inflation, the monetary policy of central banks, the fiscal policy of governments and geopolitical conflicts."

AI on the rise

With the omnipresent hype surrounding artificial intelligence, Logitech is also focusing more and more on this topic. As the communiqué shows, many of the numerous products that the company launched on the market in the first three months of its financial year make use of AI capabilities, such as a recently launched conference camera.

The decision by the Vaud district court of La Côte is also likely to be a talking point. Yesterday, Monday, it ruled that the computer accessories manufacturer must nominate Board member Guy Gecht for the position of Chairman of the Board of Directors at the request of company founder Daniel Borel.

Borel and Logitech have been wrangling over the position of Chairman of the Board for weeks. The company founder has been opposing the re-election of Wendy Becker, who has been Chairwoman since 2019, for some time. At the beginning of July, Logitech announced that Becker would not be standing for re-election at the Annual General Meeting in fall 2025. However, Borel wants her to step down as early as 2024 and therefore recently proposed Gecht, although he has so far declined the position.

SDA