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LOGITECH INTL NA SF -,25 Reports Operating Results (10-Q)

November 06, 2012 | About:
10qk

10qk

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LOGITECH INTL NA SF -,25 (LOGI) filed Quarterly Report for the period ended 2012-09-30.

Logitech International S.a. has a market cap of $1.17 billion; its shares were traded at around $7.08 with a P/E ratio of 14.5 and P/S ratio of 0.5. Logitech International S.a. had an annual average earning growth of 2.4% over the past 10 years.

Highlight of Business Operations:

Retail sales during the six months ended September 30, 2012 decreased 3% and retail units increased 1% compared with the six months ended September 30, 2011. We experienced modest growth in our EMEA region of 4%, led by keyboards/desktops, decline in our Americas region of 9% overall and in most categories, and decline in our Asia Pacific region of 4% primarily from video and gaming. If foreign currency exchange rates had been the same in the six months ended September 30, 2012 and 2011, the percentage changes in our constant dollar retail sales would have been an increase of 13% in EMEA, a decrease of 4% in Asia Pacific, and a decrease of 8% in the Americas. Sales incentive spending (including pricing discounts) during the six months ended September 30, 2012, compared with the same period of the prior fiscal year, decreased 12% due to controlled spending for customer incentive programs as well as lower sell-through during this period. Sales returns expense during the six months ended September 30, 2012, compared with the same period of the prior fiscal year, decreased 27% due to lower return trends and better channel inventory aging during this period.

Our retail sales in the three and six months ended September 30, 2012 declined compared with the same periods of the prior fiscal year. Retail sales declined in all three regions during the three months ended September 30, 2012, and increased in EMEA and declined in the Americas and Asia Pacific regions during the six months ended September 30, 2012, compared with the same periods of the prior fiscal year. Retail units sold decreased 2% during the three months ended September 30, 2012, and increased 1% in the six months ended September 30, 2012, compared with the same periods of the prior fiscal year. Our overall retail average selling price declined 3% in the three and six months ended September 30, 2012, compared with the same periods in the prior fiscal year. Products priced below $40 represented 54% and 57% of retail sales in the three and six months ended September 30, 2012, compared with 55% and 56% of retail sales in the three and six months ended September 30, 2011. Sales of our retail products priced above $100 represented 14% and 13% of retail sales in the three and six months ended September 30, 2012, compared with 15% and 16% of total retail sales in the three and six months ended September 30, 2011. If foreign currency exchange rates had been the same in the three and six months ended September 30, 2012 and 2011, our constant dollar retail sales would have been a decrease of 2% and an increase of 1%.

Retail sales of our pointing devices decreased 8% and 7% in the three and six months ended September 30, 2012, compared with the same period in the prior fiscal year, while retail units sold increased 2% and 1% during these periods. The primary weakness during the three and six months ended September 30, 2012, compared to the same periods of the prior fiscal year, was in our mid-priced and high-priced offerings which experienced double-digit declines, offset in part by single-digit growth in our low-priced offerings. Sales of all cordless mice decreased 4% and 6% in the three and six months ended September 30, 2012, while units sold increased 7% and 4% during the same period. Corded mice sales decreased 14% and 10% and units sold decreased 3% and 5% in the three and six months ended September 30, 2012 compared with the same periods in the prior fiscal year. In October 2012, we introduced several new products designed to enhance the touch and navigation capabilities of the new Windows 8 operating system.

Retail sales of keyboards and desktops increased 20% and 18% during the three and six months ended September 30, 2012, compared with the same periods in the prior fiscal year, while units sold increased 4% and 9% during these periods. The primary driver of this increase was from continued strong demand for the Logitech Ultrathin Keyboard Cover which experienced sales more than tripling during the three months ended September 30, 2012 and nearly tripling during the six months ended September 30, 2012, compared to the same periods in the prior fiscal year. Sales of cordless keyboards and desktops increased 4% in sales and 8% in units while sales of corded keyboards and desktops decreased 10% in sales and 8% in units during the three months ended September 30, 2012, compared with the same period in the prior fiscal year. Sales of cordless keyboards and desktops increased 13% in sales and 22% in units while sales of corded keyboards and desktops decreased 11% in sales and 6% in units during the six months ended September 30, 2012, compared with the same period in the prior fiscal year.

Retail sales of our gaming peripherals declined 1% and 12% in the three and six months ended September 30, 2012 compared with the same periods in the prior fiscal year, while retail units sold increased 10% during these periods. The decrease during both periods was from console gaming sales which declined by 85% in sales and 67% in units during the three months ended September 30, 2012 and by 89% in sales and 75% in units during the six months ended September 30, 2012. In contrast, PC gaming sales increased by 12% in sales and 17% in units during the three months ended September 30, 2012 and declined by 1% in sales and increased by 17% in units during the six months ended September 30, 2012. The improvement in PC gaming sales during the current quarter was driven by gaming mice, particularly from strong sales of Logitech G600 MMO Gaming Mouse, and by gaming headsets. The difference between the decline in PC gaming sales and the increase in units during the six months ended September 30, 2012 reflects a mix shift away from steering wheels to lower-priced mice, keyboards and gamepads.

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