Logitech Reports Abysmal 3Q

For a company that once boasted 34 straight quarters of double-digit revenue growth, Logitech's LOGI third-quarter report was a cold shower. Total sales declined 16% from last year, with weakness throughout the company's broad product line. Keyboards, pointing devices, gaming consoles, and remote control devices all declined in excess of 20% from last year. The only categories that showed growth were audio and video products, boosted in part by recent acquisitions. We believe Logitech will face ongoing sales weakness in its business throughout 2009 as well as lower gross margins, since it is offering incentives to retailers to clear its growing inventory.