The bottom line is that net income fell by a third to $140.2 million.
Operating profit (non-GAAP) fell by 32 percent to $ 204.2 million in the months of September to December 2022, as the Swiss-American group announced on Tuesday. Sales also plunged 22 percent to $1.27 billion. The appreciation of the dollar left its mark: at constant currencies, sales would only have fallen by 17 percent.
Two weeks ago, Logitech had announced a drop in sales to $1.26 to $1.27 billion and an EBIT diver by a third to between $198 million and $203 million. This led to the share falling by 20 percent to around 50 francs. Since then, the title has been bobbing along at this level.
Demand from companies was weaker than expected, Logitech explains the drop in sales. Purchases by private consumers have also fallen and are concentrated on action weeks.
Sales fell in all product categories. Sales of gaming accessories, which is the largest category, shrank by 16 percent. While simulation products stagnated, accessories for PC and console games experienced a decline.
Keyboards and combos were down 22 percent. Demand for video equipment in conference rooms fell to around the same extent. Computer mice were also less in demand (-14 percent). PC webcams even fell by half.
The biggest setback was in America, where sales plunged by almost a quarter. In Europe, the minus was 22 percent, while Asia brought in almost a fifth less sales. In Asia, sales in China have suffered, partly offset by stronger performance elsewhere.
However, the crash took place from previously unattainable heights and must therefore be put into perspective. With sales of 1.27 billion, sales in the reporting quarter were still almost 40 percent higher than in 2019 or before the outbreak of the corona pandemic. And operating profit exceeds that of the Christmas quarter of 2019 by a third.
In the two years of the pandemic, the group had benefited from a boom in orders from customers, all of whom wanted to upgrade their computers because they were stuck at home. For example, keyboards, gaming equipment and computer mice had been box office hits.
With the easing of the corona measures and the partial return of the employees to the office, it was clear that these sales levels could not be maintained. Business was also hit by the outbreak of the Ukraine war, skyrocketing inflation and the deteriorating economic outlook, which made companies more cautious.
In the first nine months, sales fell by 15.8 percent to $ 3.58 billion. Operating income (non-GAAP) fell by almost a third to $506.2 million. Net income (GAAP) fell almost 40 percent to $323.1 million.
For the full year 2022/23, the company had lowered its targets two weeks ago: Logitech now expects a drop in sales of between 13 and 15 percent at constant currencies. The target for non-GAAP operating income has been lowered to between $550 million and $600 million.
Previously, Logitech had assumed a currency-adjusted decline in sales of between 4 and 8 percent and non-GAAP earnings between 650 and 750 million dollars. In the previous fiscal year 2021/22, Logitech still had an operating profit (non-GAAP) of 904 million dollars.