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Bracken Darrell, Logitech CEO joined Yahoo Finance Live to break down the key takeaways from Logitech's recent earnings and what to make of the latest consumer trends.
- All right, welcome back to Yahoo Finance Live. I can give you, what was it, 1.3 billion reasons that you might want to consider Logitech. That's how much sales increased, up 66% compared to the same quarter last year. Profits nearly doubled. Don't take it from me. Let's speak with the CEO from Logitech, Bracken Darrell.
Good to have you here, and thank you for joining us. And most of us know, we might not even realize the device we're using is a Logitech device. But you're watching sales specifically because of the hybrid stuff we've all been going through just skyrocket. Will that trend continue?
BRACKEN DARRELL: Yeah, we really think the hybrid trend favors what we do. We both enable workspaces for all kinds of work and video, and in office spaces for video conferencing. So we're really in the kind of spot where we think both business are going to do really well with a hybrid trend.
- Bracken, I was on your site earlier. It looks like a number of your items are back in stock, and I know this is something that you and I have discussed multiple times over the past year. I guess, are you still experiencing any supply chain issues, and what does that look like now?
BRACKEN DARRELL: Yeah, we were struggling for the last year, especially, but we're back in stock in just about everything. We have a few things that are still a little short. We've got a few chip challenges, like most companies that are on the chip supply business. But overall, we're in we're in pretty good shape from a supply standpoint.
- Tell us about Logitech Scribe, because the world is going to have this hybrid model. I don't think anyone can specifically say where it all winds up ending, but you've got a way to make it work. What does Scribe actually allow us to do?
BRACKEN DARRELL: Yeah, we video-enable rooms of all sizes, from little, tiny huddle rooms, all the way to big board rooms. And what Scribe is, is a way to essentially take any kind of whiteboard, or writable wall, and we have a camera called Scribe the drops in right above it. And then it becomes a participant in your meeting, and you can essentially operate on a whiteboard the way you would if you were in person. So it's really awesome.
- Bracken, I don't know this is if it's still a little bit too early to tell, but we're in the back to school season, right now, something we've been covering closely, here. What has demand been like for your products. And I guess, how does it compare not so much to last year, but going back to 2019 and previously?
BRACKEN DARRELL: Well, it's too early for us to say. We're just starting the quarter. But overall, we think education has been a real powerhouse for us over the last year, as people became hybrid. Not only workers, but also hybrid students. And we think that once you've got a workspace set up, you're going to need one, because a lot of the schools have got their students acclimated with the idea of working more from home. So we're optimistic about back to school in general, for the long term.
- Let's talk about the advanced gaming gear, because when you talk about where sales growth was ginormous-- not my word, but on the 20 somethings used-- sales of gaming devices, it was up 76%. I mean, that was the largest sector unit of growth, and I can't imagine that's going to slow down.
BRACKEN DARRELL: No, we're super optimistic about long term for gaming. I'm an Olympics addict. I barely watch much TV except for you guys and Kramer except during the Olympics, and then I just leave it on all the time. And I'm surprised that we don't already have gaming in the Olympics. Gaming continues to be a super strong long term trend. More and more people are coming into it, there are more and more games. It's the playground of this generation, and so I think you're just going to see it keep growing.
- Bracken, I was happy to hear that Yahoo Finance is in the mix of what you watch on a regular basis. One thing that you mentioned in your earnings call was your reinvestment plan going forward. I guess, where exactly do you plan to increase spend, and what does that mean just in terms of new products that we could expect going forward?
BRACKEN DARRELL: Well, we're going to keep investing in the video conferencing space, as well as gaming, of course. And then streaming and creating, but we're also investing in going to market. We've got a lot of opportunities to bring our products to market around the world. So we're investing there. And finally in marketing. You're starting to see a little more marketing from us than you would have in the past. We had a Super Bowl ad last year, and you can expect more of that in the future. Super exciting stuff.
- Bracken, this is a little unrelated to the business, but we have a guest coming on in a bit who's going to talk about the need for warehouse space to store and deliver the products we order. Are you finding any kind of problem once you get the goods to the United States with the warehousing, so they can be distributed to those of us who buy it?
BRACKEN DARRELL: No, but I know that's been a struggle. I think there's been some congestion issues in the ports and in Asia, too. But so far, we've been able to manage it pretty well. We haven't had too many problems, but I know that transportation this past six months has been a struggle for many companies.
- Bracken, we were just talking with our doctor in the last block figuring out how and when some companies are bringing their workers back. I guess, what does your plan look like going forward for Logitech?
BRACKEN DARRELL: Well, we're we're starting to bring it back now. So of course our Asia office, especially China, have been open. Taiwan too. Australia is generally back, but in a hybrid work environment. You know, two days in, three days out. We're just starting in the US. Our California offices that just opened up for about 10% capacity. We'll wrap that up at the end of this month, and then we'll slowly start back into Europe, too. We've had a few fits and starts in Europe as COVID's come back.
But overall, I'd say we're in the right direction, I think. I would be surprised if we get to mid fall, or certainly the first next year, if we're not generally in offices. But we'll be in a hybrid environment like most people. Two or three days in, two or three days out. A lot of flexibility for employees. They love it.
- Bracken, I've just got to let you know. I prefer to watch the Yahoo Finance Live reruns from the old days when they were in black and white on Nick at Nite. Is Nick at Nite even a thing anymore? Bracken Darrell is the CEO of Logitech, and we appreciate your joining us. All the best to you, sir.