Logitech clings onto cost-cutting axe as sales, profit sail away
Such a lovely time to be in retail
Losses widened at PC peripherals kingpin Logitech as OEM sales sank and restructuring charges kicked in.
The company posted an operating loss of $59m (£38m) for fiscal Q1 2013, ended 30 June. This included a one-off charge of $34m in part to pay for redundancies. The same quarter a year ago recorded a $45m operating loss.
Sales dropped two per cent to $469m (£302m) in this latest quarter, but turnover was flat once unfavourable currency exchange translations were excluded.
Chairman and CEO Guerrino De Luca said the numbers were in line with expectations.
"We are in the middle of our turnaround," he said, "We continue to benefit from the simplification of our organisation and processes, cost savings from the restructuring."
Logitech confirmed at the start of June that it plans to axe 450 staff to help slash $80m in overheads.
In Q1, total retail sales were flat at $395m despite a 17 per cent spike in EMEA. There was no growth in Asia and a decline of 11 per cent in the Americas, however. Average retail prices fell four per cent and gear priced over $100 accounted for just 13 per cent of Logitech's sales to consumers.
OEM sales were down by a quarter on the same period a year ago to $36.7m.
De Luca expects the restructure plans to "bear fruit beginning in the second half of fiscal year 2013" when the lighter overheads boost profits and a bunch of consumer kit in music, tablets and the digital home launch. ®