Logitech Posts Q2 Results

Logitech’s retail sales for Q2 grew by 5 percent year over year, increasing by 35 percent in Asia and 8 percent in EMEA and decreasing by 11 percent in the Americas. Harmony® remotes (up 17%) and pointing devices (up 16%) were the best-performing categories in retail and video sales grew for the third consecutive quarter (up 9%). OEM sales grew by 56 percent, reflecting exceptionally strong demand for microphones for console gaming.

“We are pleased to deliver double-digit revenue growth in what has become an increasingly challenging environment,” said Gerald P. Quindlen, Logitech president and chief executive officer. “The strong growth in Asia and OEM, as well as in pointing devices and Harmony remotes, underscores the resilience of our geographic and category diversification. The decline in our gross margin was primarily due to the combination of higher input costs and the mix between retail and OEM sales.

“Given the pervasive economic uncertainty, both in North America and Europe, we are tempering our outlook for growth for Fiscal 2009. We remain bullish on the opportunities across all our product categories and we believe we are well positioned to return to annual growth in the mid-teens when conditions improve.”

Outlook For Fiscal Year 2009, ending March 31, 2009 the Company now expects growth of 6-8 percent in sales and 3-5 percent in operating income, revised from the original target of 15 percent growth for both. The Company continues to expect FY 2009 gross margin to be above its long-term target range of 32-34 percent. Logitech expects its effective tax rate for the year to be approximately 12 percent.

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