Logitech announced a 34 percent fall in quarterly operating profit as the Swiss company is hit by currency headwinds as well as shrinking demand for computer mice. First quarter operating profit came in at $14.5 million, versus $21.8 milion a year ago, while revenue shrunk 4.7 percent to $467.2 million.
While the firm is seeing strong demand for its newer music and video accessories, sales of its traditional mice and keyboard business are declining. In recent years the firm refocused its attention to new product lines like wireless music speakers, video conferencing products and video game controllers to offset the decline in sales of the accessories on which it built its global brand name.
However, unlike what some media are mistakenly reporting, Logitech has no plans to shift away from mice and keyboards. There was some brief confusion about this as Logitech mentioned it would phase out one of its units that manufactures cheap mice that are resold by third-party companies but this decision has no impact on the firm's line of own-brand mice. Instead, Logitech will double down on retail sales and will place a bigger emphasis on the gaming market.
Sales of Logitech's OEM mice division collapsed 26 percent last quarter. Logitech CEO Bracken Darrell told investors that once the company exits the low-margin mouse manufacturing business, underlying revenue is set to show sustained sales growth in constant currency terms.
Darrell also mentioned Logitech will be increasing prices outside the US to offset currency declines. For European customers this means price hikes of around 11 to 13 percent across the board.