Logitech Lifts Profit, Warns of Supply Hit
A supplier factory closure could reduce fiscal third-quarter sales by as much as $200 million.
Logitech International (LOGI), the computer-peripherals maker, reported a 60% increase in fiscal first-quarter operating income as wider gross margins amplified steady sales growth.
The quarter marked a sharp profit inflection. GAAP gross margin expanded 780 basis points to 49.5%, reversing the contraction recorded a year earlier, while GAAP operating income nearly doubled sequentially to $259 million. The result included $61 million of tariff refunds; non-GAAP operating income rose 44% to $290 million, or 14% excluding that benefit.
Sales rose 7% from a year earlier to $1.23 billion, matching the previous quarter's growth rate, while constant-currency growth accelerated to 5% from 3%. GAAP diluted earnings increased 66% to $1.63 a share, and non-GAAP earnings rose 47% to $1.85 a share.
Pointing Devices led the product categories with 16% sales growth, followed by Gaming at 12% and Video Collaboration at 11%. Webcams declined 9%, while Headsets fell 3% and Tablet Accessories decreased 2%, leaving growth concentrated in several of Logitech's larger categories.
Operating cash flow increased 33% from a year earlier to $167 million, though it fell about 18% from the preceding quarter. Logitech repurchased $114 million of shares, down about 7% from a year earlier.
For the fiscal second quarter, Logitech expects sales of $1.185 billion to $1.220 billion, representing growth of as much as 3%, compared with 7% in the first quarter. It expects non-GAAP operating income of $185 million to $210 million, down from the first quarter's refund-assisted $290 million.
Logitech offered no formal full-year guidance but said its non-GAAP operating margin should finish near the high end of its 15% to 18% long-term target. A semiconductor supplier's factory closure is expected to trim second-quarter sales by about $20 million and could cut third-quarter sales by as much as $200 million, with little to no impact expected in the fourth quarter if the disruption is largely resolved.