Logitech(US:LOGI)2025-10-29 20:12Sales Performance - Sales for the three and six months ended September 30, 2025, were $1,186.1 million and $2,333.8 million, representing a 6% increase compared to $1,116.0 million and $2,204.3 million for the same periods in 2024[119]. - Sales in the Asia Pacific region increased by 20% for the three months and 18% for the six months ended September 30, 2025, while sales in the EMEA region increased by 9% and 10%, respectively; however, sales in the Americas region decreased by 4% for both periods[120]. - Sales in the Americas region decreased primarily due to a decline in Gaming and Tablet Accessories, with a competitive pricing environment impacting Gaming sales[136]. - EMEA region sales increased, driven by Keyboards & Combos, Pointing Devices, and Video Collaboration, with a notable rise in Gaming sales over the six-month period[137]. - Asia Pacific region sales increased, primarily due to growth in Gaming and Tablet Accessories[138]. - Total sales for the three months ended September 30, 2025, were $1,186,056, a 6% increase from $1,116,034 in 2024; for the six months, sales were $2,333,759, also a 6% increase from $2,204,251 in 2024[139]. Financial Metrics - Gross margin for the three months ended September 30, 2025, was 43.4%, a decrease of 20 basis points compared to the same period in 2024; for the six months, gross margin was 42.6%, down 60 basis points[121]. - Gross profit for the three months ended September 30, 2025, was $514,456, a 6% increase from $486,091 in 2024; for the six months, gross profit was $993,418, a 4% increase from $952,349 in 2024[149]. - Operating expenses for the three months ended September 30, 2025, were $323.2 million, or 27.2% of sales, compared to $325.2 million, or 29.1% of sales, for the same period in 2024[122]. - Operating expenses for the three months ended September 30, 2025, were $323,165, slightly down from $325,195 in 2024; for the six months, operating expenses were $640,033, up from $637,954 in 2024[151]. - Net income for the three and six months ended September 30, 2025, was $170.7 million and $316.7 million, respectively, compared to $145.5 million and $287.3 million for the same periods in 2024[123]. Economic and Market Conditions - The company expects continued challenges from macroeconomic conditions, including inflation and geopolitical conflicts, which may impact demand and pricing[116]. - The company anticipates that the ongoing growth in gaming and new ways of working will provide long-term structural growth opportunities across its product portfolio[115]. Currency and Foreign Exchange - Approximately 53% of the company's sales during the three months ended September 30, 2025, were denominated in currencies other than the U.S. Dollar[134]. - If currency exchange rates had been constant, the sales growth rates for the three and six months ended September 30, 2025, would have been 4% for both periods[133]. - An adverse 10% foreign currency exchange rate change would have resulted in an adverse effect on income before income taxes of approximately $20.9 million as of September 30, 2025[199]. - If the U.S. Dollar had weakened by 10%, the amount recorded in accumulated other comprehensive income (AOCI) related to foreign exchange contracts would have been negatively impacted by approximately $30.1 million as of September 30, 2025[201]. - The company transacts business in approximately 30 currencies worldwide, with significant exposure to the Euro, Chinese Renminbi, and Japanese Yen[197]. Cash Flow and Capital Management - As of September 30, 2025, cash and cash equivalents totaled $1,375.8 million, down from $1,503.2 million as of March 31, 2025, reflecting a decrease of approximately 8.5%[168]. - Working capital as of September 30, 2025, was $1,468.4 million, a decrease from $1,491.6 million as of March 31, 2025, primarily due to increased accounts payable[169]. - For the six months ended September 30, 2025, net cash provided by operating activities was $353.9 million, compared to $342.0 million for the same period in 2024, representing an increase of approximately 3.0%[177]. - The company repurchased 2.5 million shares for an aggregate cost of $215.8 million during the six months ended September 30, 2025, with $432.7 million remaining available for repurchase under the 2023 share repurchase program[183]. - The company expects to target share repurchases of $2 billion over the three-year period ending March 31, 2028, subject to market conditions[183]. Tax and Restructuring - The effective income tax rate for the three months ended September 30, 2025, was 15.9%, a decrease from 17.4% for the same period in 2024, primarily due to changes in income mix and reduced tax incentives[165]. - The restructuring charges for the three and six months ended September 30, 2025, were related to a restructuring plan initiated in the fourth quarter of fiscal year 2025, expected to be completed in fiscal 2026[159]. Inventory and Demand Management - Days sales in accounts receivable (DSO) increased to 53 days for the three months ended September 30, 2025, compared to 51 days for the same period in 2024[173]. - Inventory turnover (ITO) improved to 5.2 times for the three months ended September 30, 2025, up from 4.8 times for the same period in 2024, indicating better demand management[176]. - The company recorded a liability for firm, non-cancelable, and unhedged inventory purchase commitments in excess of anticipated demand[188]. - The company has firm purchase commitments of $19.7 million for capital expenditures related to tooling and equipment for new and existing products[189]. - The company expects to continue making capital expenditures to support product development activities and ongoing operations[189].