Fremont, Calif. - Logitech sales decreased 36 percent in the first quarter of its fiscal year, the company said in announcing its financial results for the period.
Sales were $328 million, compared with $509 million in the same quarter last year - a drop of 36 percent. Excluding the unfavorable impact of exchange rate changes, sales decreased by 33 percent, the company said.
Logitech posted an operating loss of $33 million, compared with operating income of $30 million in the same quarter a year ago. The net loss for Q1 was $36 million (20 cents per share) compared with net income of $29 million (16 cents per share) in the prior-year period. The company said it recorded pretax restructuring charges of $1.4 million ($1.1 million after tax). First-quarter gross margin was 24.4 percent, compared with 34.1 percent in the prior-year period.
Retail sales for the quarter declined by 35 percent year over year, with sales down by 39 percent in Europe, the Middle East and Africa; 37 percent in the Americas; and 22 percent in Asia. OEM sales were down by 39 percent.
Gerald P. Quindlen, Logitech president and CEO, said in a statement: "Our results were consistent with the outlook we shared at the start of the quarter, with slightly higher sales and a lower operating loss than anticipated. During Q1, we made substantial progress in helping our channel partners reset to their new, lower levels of weeks of supply. While there is still more progress to be made, we continue to expect this reset to be completed by the end of the second quarter, which will benefit both our sales and our profitability in the second half of the fiscal year. We ended Q1 with a cash balance of $567 million, an increase of more than $80 million over the same period last year - due to our sustained focus on working capital management."
Quindlen continued, "We expect a return to profitability in Q2 as well as a return to earnings growth for the second half of FY 2010, due to the combined impact of the conclusion of our channel partners' reset, our ongoing cost-reduction measures and the introductions during Q2 of most of our new products for the FY 2010 holiday season. Designed for today's more discerning consumers, our new lineup of products is expected to stimulate demand and reduce promotional pressures during the second half of the fiscal year."