Logitech has announced the preliminary financial results for the third quarter of the Fiscal Year 2023. As predicted, the tech company has reported a loss in revenue as compared to the same period last year. The impending fear of recession combined with massive layoffs has changed consumer spending habits this year and hence it is no surprise that Logitech reported a 22% fall in quarterly sales. However, the actual figures were worse than the company’s expectations.
The preliminary results show the net sales of the company were between $1.26 billion and $1.27 billion, down 22% as compared to Q3 of the previous fiscal year. The GAAP( Generally Accepted Accounting Principles) operating income is between $171 million and $176 million, down to 33%, compared to $263 million in the same quarter a year ago.
This downward trend in its financials is not surprising given that the company had already predicted negative growth for the year ending 2023. The company had previously predicted an outlook of between negative 8 percent and negative 4 percent sales growth in constant currency, and between $650 million and $750 million in non-GAAP operating income.
After the preliminary results of the third quarter, the company has further adjusted its Fiscal Year 2023 outlook to between negative 15 percent and negative 13 percent sales growth in constant currency, and between $550 million and $600 million in non-GAAP operating income.
The previous year 2021-22 was great for Logitech as the pandemic-induced remote working scenario led to an increased demand for its products like computer gadgets and gaming devices. However, now things are looking bleak for the company as the fear of impending recession, combined with massive layoffs, has reduced the demand for its computer and home office products. As more and more people are getting back to the office, the demand for home office supplies is dwindling. Also, the fear of an imminent global recession and rising inflation has further shrunk the market.
The global consumer trend 2023, revealed that the cost-of-living crisis is undermining purchasing power for consumers, and saving money is the top priority. Consumption behaviors are less about the acquisition and more about the reduction in 2023. These trends offer insight into the sharp drop in the revenue of companies like Logitech, as consumers are now in savings mode rather than a spending spree.
Logitech President and CEO, Bracken Darrell commented, “We are disappointed in these preliminary third-quarter results. They reflect challenging macroeconomic conditions. Based on the softer-than-expected third-quarter results, and uncertainty in supply availability, we are reducing our full-year outlook.”
Logitech is a multi-brand company that provides hardware and software solutions for different sectors including music, gaming, video, and computing. Some of their famous products include Mice & Keyboards, Headsets & Webcams, Gaming solutions, and more.
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(Source)
