PC peripherals maker Logitech International missed Wall Street's targets for its fiscal first quarter and lowered its full-year outlook, citing a challenging macroeconomic environment. Still, LOGI stock rose on the news Tuesday.
Logitech late Monday said it earned an adjusted 74 cents a share on sales of $1.16 billion in the quarter ended June 30. Analysts polled by FactSet expected the company to earn 89 cents a share on sales of $1.21 billion. In the year-earlier period, Logitech earned $1.22 a share on sales of $1.31 billion.
The company's June-quarter sales fell 12% year over year, or 9% in constant currency.
For the full fiscal year, Logitech now expects sales to decline 4% to 8% in constant currency. It previously forecast sales growth of 2% to 4% in constant currency.
LOGI Stock Rises After Report
On the stock market today, LOGI stock climbed 3.2% to close at 55.07.
Logitech faces difficult comparisons to the heady growth it experienced during the Covid-19 pandemic. The work-from-home, learn-at-home and play-at-home trends from the pandemic fueled sales of its devices.
"While we will cut back our spending given the current environment, our strong innovation engine paired with secular growth trends — hybrid work, video everywhere, gaming and digital content creation — position us well for the future," Chief Executive Bracken Darrell said in a news release. Most of the spending cuts will be in advertising and marketing, Darrell told Investor's Business Daily.
Meanwhile, Logitech's board approved an increased share buyback authorization up to $1.5 billion. This expands the company's current $1 billion, three-year share buyback authorization. Logitech has repurchased about $697 million of LOGI stock in the current program, which ends in July 2023.
Logitech Guidance Might Be Conservative
Of Logitech's nine product categories, only three posted year-over-year sales growth in the fiscal first quarter. Video collaboration device sales rose 5% in the period. Keyboards and combos saw sales increase 4%. And sales of pointing devices increased a fraction.
The hybrid work trend has benefited those categories, Darrell told IBD.
"Everybody is really thinking about what to do with the office," he said. "They're resetting their footprints and video-enabling rooms."
On the negative side, Logitech's gaming device sales were weak, falling 16% year over year in the June quarter.
In a note to clients, Wedbush Securities analyst Michael Pachter said Logitech likely is being conservative with its guidance.
"We view this as a fresh bar the management team can easily sail over, and we expect the team to raise guidance as the year progresses," Pachter said. He rates LOGI stock as outperform.
Follow Patrick Seitz on Twitter at @IBD_PSeitz for more stories on consumer technology, software and semiconductor stocks.
