Logitech International SA (LOGI) Q2 FY 2024 Earnings: Sales Down 8%, Operating Income Up 23%
Logitech's Q2 FY 2024 sales were $1.06 billion, down 8% in US dollars and 9% in constant currency, compared to the prior year.
GAAP operating income was $157 million, up 23% compared to the prior year. Non-GAAP operating income was $183 million, up 17% compared to the prior year.
GAAP earnings per share (EPS) was $0.86, up 72% compared to the prior year. Non-GAAP EPS was $1.09, up 30% compared to the prior year.
The company raised its full-year outlook for Fiscal Year 2024.
Logitech International SA (NASDAQ:LOGI) released its earnings report for the second quarter of Fiscal Year 2024 on October 24, 2023. Despite a challenging market environment, the company demonstrated resilience with a 23% increase in GAAP operating income compared to the prior year. However, sales were down 8% in US dollars and 9% in constant currency, compared to the prior year.
Financial Performance Highlights
Logitech's GAAP operating income for Q2 FY 2024 was $157 million, marking a 23% increase compared to the prior year. Non-GAAP operating income was $183 million, up 17% compared to the prior year. The company continued to reduce operating expenses, which were down 9% compared to the prior year, aligning with the decline in net sales.
GAAP earnings per share (EPS) was $0.86, up 72% compared to the prior year. Non-GAAP EPS was $1.09, up 30% compared to the prior year. Cash flow from operations was $223 million, up $150 million compared to the prior year. The quarter-ending cash balance was $1.16 billion.
Company Commentary
The Logitech team stepped up execution this quarter and delivered results that demonstrate the underlying potential of our business, said Guy Gecht, Logitech interim chief executive officer. We made great progress toward a return to growth and exceeded our pre-pandemic profit levels. Our design-led innovation capabilities were on full display, with 16 new product introductions during the quarter. I'm proud of what our team has accomplished in this challenging environment. We remain focused on developing market leading products, operational excellence, and value creation for shareholders."
While our second quarter revenue was down compared to last year, we delivered expanded gross margins of 42.0% and operating margins of 17.3%, said Chuck Boynton, Logitech chief financial officer. Through strong operating execution and working capital management, we generated $223 million in operating cash flow and returned $276 million to our shareholders. Our focus on cost discipline with a customer-first mindset is paying off, with share growth in key categories. We remain cautiously optimistic on the balance of the year and are pleased to raise the annual outlook.
Updated Full Year Outlook
Logitech raised its full-year outlook for Fiscal Year 2024. The company now expects sales to be between $4.0 - $4.15 billion, up from the previous forecast of $3.8 - $4.0 billion. The expected sales decline in US dollars, year over year, has been revised from 16% - 12% to 12% - 9%. Non-GAAP operating income is now expected to be between $525 - $575 million, up from the previous forecast of $400 - $500 million.
Financial Tables Summary
Logitech's GAAP condensed consolidated statements of operations showed net sales of $1,057,008 for the three months ended September 30, 2023, compared to $1,148,951 for the same period in 2022. The cost of goods sold was $615,403, resulting in a gross profit of $438,622. After accounting for operating expenses, the operating income was $156,639.
For the six months ended September 30, 2023, net sales were $2,031,507, compared to $2,308,816 for the same period in 2022. The cost of goods sold was $1,211,115, resulting in a gross profit of $814,264. After accounting for operating expenses, the operating income was $235,044.
Logitech's condensed consolidated balance sheets showed total current assets of $2,492,224 and total assets of $3,425,030 as of September 30, 2023. Total current liabilities were $1,086,947, and total liabilities were $1,347,765. The total shareholders' equity was $2,077,265.
Logitech's condensed consolidated statements of cash flows showed net cash provided by operating activities of $223,264 for the three months ended September 30, 2023, and $463,059 for the six months ended September 30, 2023. The cash and cash equivalents at the end of the period were $1,163,904.
Logitech's supplemental financial information showed net sales by product category. Gaming led the way with $282,104 in
This article first appeared on GuruFocus.
