Logitech International, a Swiss manufacturer of computer peripherals and software, has announced that it expects its sales and operating profit to contract less than previously anticipated for fiscal 2024. This news has led to a surge in Logitech's shares in Tuesday morning trading.
Sales Forecast
Logitech now predicts its sales for the fiscal year ending March 31 to be in the range of $4 billion to $4.15 billion. This represents a year-on-year contraction of 12% to 9%. Previously, the company had projected a decline of 16% to 12%.
Operating Profit Outlook
The non-GAAP operating profit is expected to be between $525 million and $575 million, reflecting a year-on-year fall of 11% to 2%. Logitech's previous forecast indicated a decline of 32% to 15% in operating profit.
Improved Guidance
Logitech's improved guidance follows its sales performance in the three months ending September. During this period, the company recorded sales of $1.06 billion, which was an 8% decrease compared to the previous year. However, the non-GAAP operating profit increased by 17% to $183 million due to effective cost management measures.
The Significance of Non-GAAP Earnings
Non-GAAP earnings are an alternative accounting method used by companies to supplement standardized results based on Generally Accepted Accounting Principles (GAAP). These earnings provide a clearer picture of Logitech's financial performance.
Logitech's interim chief executive, Guy Gecht, expressed satisfaction with the company's quarterly results, stating that they demonstrate the underlying potential of their business. He also highlighted their progress towards a return to growth and their achievement of pre-pandemic profit levels.
