Computer parts maker Logitech raised its full-year guidance after it reported better-than-expected quarterly sales and profit. The company, which makes keyboards, mice, and webcams, expects fiscal 2024 revenues to be flat in constant currencies. That compares with an earlier forecast for 35% to 40% growth.
Quarterly revenue rose to $974 million from the previous quarter, beating market expectations. Non-GAAP operating income rose to $109 million from $82 million a year ago. Chief Financial Officer Nate Olmstead attributed the results to a stronger-than-expected product cycle and continued cost reduction efforts.
After a massive surge last year, investors had been worried about a slowdown in demand for computer and gaming peripherals.
Logitech, which also raised its earnings outlook in July, is expected to update its annual forecast when it reports fiscal first-quarter results on Monday.
The Swiss-American company experienced an intense pandemic as people stocked up on its equipment to work from home. It is confident that the secular trends that fueled the spike can continue this year and beyond. The company cited demand for products like video conferencing, webcams, and gaming and growth in attractive long-term niches like remote work and digital entertainment.
It added that it was closer to finding a new CEO after Bracken Darrell left in June to take charge of Vans sneaker maker VF Corp (VFC.N). The departure of the highly-regarded executive credited with making Logitech a standout in the crowded tech hardware sector has been a concern for investors.
On Tuesday, Logitech also said it would restructure its marketing and corporate functions to save more than $100 million annually. It said it will shift resources to better support its consumer business and core technologies, such as video collaboration, gaming, and remote work, and accelerate investment in artificial intelligence. The company also said it would reduce costs by relocating employees, cutting travel expenses, and reducing advertising spending.
The company will continue to invest in the research and development of new products and plans to increase hiring for engineering and design positions. It will also focus on improving the efficiency of its operations, including increasing automation and investing in data analytics.
Shares of Logitech were up 12% in early trading on Wall Street. The stock is still near its record low and has fallen more than 30% this year, but it could rebound if the company can show that the favorable long-term trends it identifies are here to stay. Investors will be looking for more details on the strategy from management in Monday’s earnings report. Institutional buyers have been buying the stock at a 2:1 rate compared to sellers, which may indicate that a bottom is in sight.