Logitech bets on AI, gaming and business users as it raises spending, CEO says
Logitech's Strategic Investments and Market Outlook
By John Revill
ZURICH, May 8 (Reuters) - Logitech International will increase spending on product development and marketing this year, CEO Hanneke Faber said, even as concerns grow of a possible global economic slowdown fuelled by the Iran war.
The Swiss-U.S. maker of keyboards, mice and video-conferencing equipment is betting on gaming, business customers and artificial intelligence-enabled devices to maintain growth, after cutting costs last year to offset the impact of U.S. President Donald Trump's tariffs.
The push comes despite supply disruptions in the Middle East, which have complicated shipments and are expected to cost the company about $15 million in sales in the current quarter, after a $5 million hit in the three months to the end of March.
Logitech expects momentum from its fourth quarter to carry into the current period, aiming for 2% to 4% sales growth in constant currencies to $1.190 billion to $1.215 billion.
Increased Investment Amid Global Uncertainty
"We can and we should invest," Faber told Reuters. "The world is changing so fast with AI, which offers so many opportunities.
"We came out of the last fiscal year with such a strong financial base, so we have the firepower to do it," she added.
Spending Plans and Financial Targets
Logitech plans to keep total operating expenses for the fiscal year toward the top end of its long-term range of 24% to 26% of sales, up from 24.8% in the 12 months to March 2026.
Focus on Gaming and Business Customers
Resilient Demand in Key Markets
GAMING AND BUSINESS DEMAND SEEN AS RESILIENT
Research and development spending to produce new devices should be around 6% of sales this year, after coming in slightly below that level last year, while sales and marketing spending will also rise from about 16%, Faber said.
Gaming Market Growth
Gaming remains a key focus, with younger consumers spending more time playing computer games, making it a resilient market, she added.
Business and Enterprise Expansion
Logitech is also stepping up efforts to win more business customers, with demand expected to remain strong as companies boosted by strong recent earnings invest in new computer hardware.
The company would look at healthcare, education and government as long-term growth areas, Faber said.
Sustainability and Supply Chain Challenges
Logitech has been shielded from oil price rises which have made plastic more expensive, due to 78% of the company's products using recycled rather than virgin plastic.
Still, Middle East disruption has hit sales because some products could not be delivered from factories in Asia to its distribution centre in Dubai and on to other parts of the Gulf and Africa, despite demand remaining intact.
"We're not seeing that demand for our products is down," Faber said. "It's just logistically hard to get it to people."
(Reporting by John RevillEditing by David Goodman and Louise Heavens)
