Logitech International SA (XSWX:LOGN) Raises FY 2024 Outlook Despite Sales Decline
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.
Cash flow from operations was $223 million, up $150 million compared to the prior year.
Logitech International SA (XSWX:LOGN) released its earnings report for the second quarter of Fiscal Year 2024 on October 24, 2023. Despite a decrease in sales, the company reported an increase in operating income and cash flow from operations.
Financial Performance Overview
Logitech's sales for Q2 FY 2024 were $1.06 billion, marking an 8% decrease in US dollars and a 9% decrease in constant currency compared to the prior year. However, the company's GAAP operating income was $157 million, reflecting a 23% increase compared to the prior year. The non-GAAP operating income was $183 million, up 17% compared to the prior year.
The company's GAAP earnings per share (EPS) was $0.86, up 72% compared to the prior year. The 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.
Management 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."
Updated Full Year Outlook
Logitech raised its full-year outlook for Fiscal Year 2024. The company now expects sales to be between $4.0 billion and $4.15 billion, up from the previous outlook of $3.8 billion to $4.0 billion. The expected sales decline year over year has been adjusted from 16%-12% to 12%-9%. Non-GAAP operating income is now expected to be between $525 million and $575 million, up from the previous outlook of $400 million to $500 million.
Financial Tables Summary
The financial tables provided in the earnings report show a detailed breakdown of Logitech's performance. The GAAP condensed consolidated statements of operations show net sales of $1,057,008 for the three months ended September 30, 2023, and $2,031,507 for the six months ended September 30, 2023. The condensed consolidated balance sheets show current assets of $2,492,224 as of September 30, 2023, and total assets of $3,425,030. The condensed consolidated statements of cash flows show 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.
Company's Performance Analysis
Despite the decline in sales, Logitech has managed to increase its operating income and cash flow from operations. This suggests that the company has been successful in reducing its operating expenses and improving its operational efficiency. The increase in GAAP and non-GAAP EPS also indicates that the company has been able to deliver a strong financial performance for its shareholders. The raised outlook for FY 2024 further demonstrates the company's confidence in its future performance.
Explore the complete 8-K earnings release (here) from Logitech International SA for further details.
This article first appeared on GuruFocus.
