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Logitech shares rise despite Q3 sales miss

By Scott Kanowsky -- Shares in Logitech International SA (SIX:LOGN) rose on Tuesday as analysts noted that the Swiss-American computer equipment maker posted market share gains and strong cash flow despite missing sales estimates in the third quarter.

Analysts at Vontobel argued that Logitech, known for its devices like keyboards and mice, unveiled an improvement in "sell-through figures," a ratio measuring the amount of goods sold compared to the quantity delivered to a company from wholesale. They added that this indicates that end-demand for Logitech's products remains robust.

The analysts also pointed to the firm's cash flow from operations in October to December period of $280 million, calling it "solid." Logitech's cash balance stands at $1.04 billion.

However, third-quarter sales dropped by 22% to $1.27B, below Bloomberg consensus expectations of $1.34B, as consumers reined in spending due to recently elevated inflation. Logitech previously published preliminary numbers that showed sales would dip to between $1.26B and $1.27B.

Pre-tax profit also decreased to $182.8M, well under an anticipated return of $206M.

“These quarterly results reflect the current challenging macroeconomic conditions, including currency exchange rates and inflation, as well as lower enterprise and consumer spending,” said Logitech president and chief executive officer Bracken Darrell in a statement.

“With these external headwinds, we continued to aggressively manage our costs in the quarter, while at the same time growing market share in key categories."

Logitech reiterated its guidance for its 2023 financial year, saying it sees annual sales dropping 13% to 15% in the 12 months to the end of March and non-GAAP income of $550M to $600M.

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