Logitech issued a statement on complex issues affecting its product supply chain.Despite reporting record sales, Logitech now says it will also be affected by future logistics issues.The computer peripherals manufacturer reported that sales for the quarter ended September 30, 2021 were $1.31 billion. This means an increase of 4% over the same period last year, easily surpassing the $1.25 billion predicted by analysts.
In addition, compared with the second quarter of 2019, this number has jumped by 82%. This is the company’s highest sales in the second quarter in history. Considering that the workforce and students are migrating to work and study from home due to the new crown pandemic, this performance should not be too surprising. In addition to mice, Logitech also sells keyboards, headphones and speakers.
Despite this, Logitech’s stock price fell by 6% because it reported a significant drop in operating profit and confirmed that it is experiencing unprecedented supply chain problems. Logitech CEO Bracken Darrell told Reuters that this supply chain challenge will continue for the rest of the year. According to the current demand level to deliver products, Logitech will have some problems.
According to non-US GAAP, Logitech’s operating income fell by 40% to US$211 million in the quarter, while net profit fell by 48% to US$139.5 million. The reason for the sharp decline is that compared with 2020, store promotion and marketing expenditures have increased, and most non-essential retail stores have been closed.
Logitech said that bottlenecks in the supply chain have increased the time for air shipment of parts to two weeks. Previously, it took about four or five days to ship these parts. To make matters worse, costs are also soaring. Logitech is expanding the inventory level of existing parts by cooperating with more suppliers. Due to employees working at home and gamers, they still have a strong demand for peripherals. As the mixed work model becomes more and more common, Logitech believes that the trend of working from home will not disappear. Consumers continue to upgrade their home office PC equipment as proof.