Martin Jungfleisch

Martin Jungfleisch asked about the main swing factors for Logitech's Q4 constant currency guidance to reach the high or low end, specifically regarding the U.S. consumer, China sustainability, gaming, or PC market slowdown. He also inquired if the difference between strong sell-through and sell-in was due to promotional activity or inventory restocking.

Answer

Matteo Anversa, CFO, explained that the Q4 outlook's midpoint aligns with Q3 performance across regions, with the high end contingent on continued momentum in the Americas. He clarified that the difference between sell-through and sell-in was primarily due to foreign exchange, slightly higher promotional spend for the holiday season, and a negative mix from tablet accessories, not significant inventory restocking. Hanneke Faber, CEO, confirmed healthy channel inventory levels post-holiday season and excellent own inventory turns.

Martin Jungfleisch from BNP Paribas asked about the primary drivers behind the strengthened keyboard and mice sales, specifically whether it was due to a Windows 10 refresh or a COVID-related refresh. He also inquired about the actual tariff headwind impact in Q2 and the expectation for it to ease as Logitech reduces its China-to-U.S. business.

Answer

CEO Hanneke Faber attributed the growth in keyboards and mice to the strong performance of the premium MX and Ergo portfolios, including the MX Master 4, and excellent execution in retail. She noted that while Windows 11 refresh and AI PCs offer mild tailwinds for attach opportunities, Logitech's growth is not directly tied to PC sales trends. CFO Matteo Anversa clarified that the tariff impact in Q2 was about 150 basis points, entirely offset by 150 basis points from pricing actions and manufacturing diversification, along with supply chain management pulling in inventory. He expects a similar 150 basis points tariff impact, offset by price, in Q3, assuming the current tariff structure.

Martin Jungfleisch inquired about the drivers behind the strength in keyboards and mice, specifically whether it's linked to Windows 10 refresh or COVID refresh, and asked Matteo Anversa about the tariff headwind impact in Q2 and its expected easing.

Answer

CEO Hanneke Faber attributed the growth in keyboards and mice primarily to the premium end of the portfolio (MX and Ergo lines) and excellent execution, noting that while Windows 11 refresh and AI PCs offer a mild tailwind and attach opportunities, they are not the main drivers. CFO Matteo Anversa clarified that the Q2 tariff impact was 150 basis points pressure, entirely offset by 150 basis points from pricing actions and manufacturing diversification, and he expects a similar dynamic in Q3, assuming the tariff structure remains unchanged.

Martin Jungfleisch from Exane BNP Paribas questioned the demand patterns in Q1, specifically any pull-forward due to tariffs, and inquired about Logitech's market share position and competitive advantage from its production footprint.

Answer

CFO Matteo Anversa stated that Q1 demand was strong and broad-based, with minimal pull-in impact, which was slightly visible in B2B but immaterial overall. CEO Hanneke Faber added that Logitech saw share gains in key US categories through May. She noted it's too early to assess the full impact of pricing on market share but expects a potential temporary softening, which is typical after a price increase.