Logitech posts 'record' sales buffered by remote working rush

Logitech's sales have reached an all time high of US$2.98 billion (AU$4.62 billion) in fiscal year 2020 – reflecting a 7% growth rate buffered by high sales growth in the fourth quarter and a global shift to remote working.

As a result of the COVID-19 pandemic in Q4, businesses looked to support employees working from home by providing technology such as webcams, keyboards, speakers, and audio.

In Q4, Logitech sales grew to US$709 million (AU$1.10 billion), up 14% in US dollars and 15% in constant currency compared to Q4 of the prior year.

The company achieved gross profit of US$1.11 billion (AU$1.7 billion) across the 2020 fiscal year, and US $276.9 million (AU$415 million) in Q4.

"We have delivered five consecutive years at or near double-digit growth, and Logitech's products have never been more relevant," says Logitech president and chief executive officer Bracken Darrell.

"Video conferencing, working remotely, creating and streaming content, and gaming are long-term secular trends driving our business. The pandemic hasn't changed these trends: it has accelerated them.

Across the Logitech range of products, gaming achieved the highest net sales, followed by keyboards and combos, pointing devices, and video collaboration tools. All of these categories achieved significantly higher sales figures compared to the entire 2019 fiscal year and the 2019 Q4 quarter.

The company experienced a more modest growth rate in areas such as PC webcams, and a slight drop in mobile speaker sales, smart home products, and audio and wearables.

"We finished a solid year with a very strong fourth quarter," comments Logitech's chief financial officer Nate Olmstead.

"The COVID-19 pandemic introduces operational challenges, yet our ability to execute and strong long-term growth drivers give us the confidence to maintain our financial outlook for Fiscal Year 2021.

Logitech also confirmed its fiscal year 2021 outlook of mid-single-digit sales growth in constant currency and US$380 million to $400 million in non-GAAP operating income.

Financial results highlights (all figures in USD)

Fiscal year 2020:

• Sales were Logitech's highest ever at $2.98 billion, up 7% US dollars and 9% in constant currency compared to the prior year.
• GAAP operating income grew 5% to $276 million, compared to $263 million a year ago. GAAP earnings per share (EPS) grew 75% to $2.66, compared to $1.52 a year ago.
• Non-GAAP operating income grew 10% to $387 million, compared to $352 million a year ago. Non-GAAP EPS grew 7% to $2.15, compared to $2.01 a year ago.
• Cash flow from operations was a record $425 million, compared to $305 million a year ago.

For Q4 fiscal year 2020:

• Sales grew to $709 million, up 14% in US dollars and 15% in constant currency compared to Q4 of the prior year.
• GAAP operating income was $32 million, down 24% primarily due to a one-time, acquisition-related charge. Non-GAAP operating income grew 23% to $79 million, compared to Q4 of the prior year.