F1Q27 Earnings - An Unfortunate Supplier Issue

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F1Q27 Earnings - An Unfortunate Supplier Issue

UpdateMmuch pricing-driven growth LOGI can capture vs. any risk to deteriorating PC market

shipments. In totality, our FY27 EPS comes up to $5.90 from $5.65 prior (excl. the

$61M tariff refund benefit it actually falls to $5.47), which brings our price target to

$90, keeping us Underweight-rated.

What we learned from Logitech's F1Q27 earnings report:

(=) No evidence of pull-forward, but still inconsistent demand by region/product

and higher promotions in EMEA. Mgmt dismissed concerns around pull-forward in

F1Q, citing "very little to no" evidence of customers accelerating purchases ahead of

pricing actions or supply constraints. However, under the hood, demand remains

uneven across regions and categories. Strength in the quarter was driven by

premiumization and new product introductions across Pointing Devices and Gaming

- i.e. the MX Master 4 mouse and Pro X2 Super Strike mouse, both of which grew

"strong double digits Y/Y" - as well as tailwinds in B2B (Video Collaboration), helping

drive 11% Y/Y cc growth in the Americas and 5% Y/Y cc growth in Asia Pacific.

However, a softer macro and the ongoing conflict in the Middle East weighed on

growth in the EMEA region, where revenue declined Y/Y for the second consecutive

quarter (~$14M headwind in EMEA from disruptions in the Middle East), to which

LOGI responded with heavier promotional activity. While Logitech continues to

execute well through innovation and drive share gains, the underlying demand

backdrop remains mixed.

(-) What we know about Logitech's supplier issue, and how it impacts the year.

The most important new detail in the quarter was the disclosure of disruption at

one of Logitech's semiconductor suppliers, following an incident at a manufacturing