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A month has gone by since the last earnings report for Logitech (LOGI - Free Report) . Shares have lost about 2.7% in that time frame, underperforming the S&P 500.Will the recent negative trend continue leading up to its next earnings release, or is Logitech due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the latest earnings report in order to get a better handle on the important catalysts.
Logitech Q1 Earnings Beat Estimates on Tariff Refunds, Premium DemandLogitech reported first-quarter fiscal 2027 non-GAAP earnings of $1.85 per share, up 47% year over year. The metric topped the Zacks Consensus Estimate by 39.1%. Revenues rose 7% to $1.23 billion and beat the consensus mark by 2.1%.
The results reflected strong demand for premium pointing devices, gaming products and video collaboration solutions. Non-GAAP gross margin expanded 770 basis points to 49.8%, aided by $61 million in tariff refunds, favorable currency movements, product mix and cost reductions.
LOGI's Product Categories Show Broad StrengthGaming revenues increased 12% year over year to $354.2 million, with constant-currency growth of 9%. The PRO X2 SUPERSTRIKE mouse supported gaming-mouse momentum, while the Americas and Asia Pacific delivered solid growth.
Pointing Devices revenues climbed 16% to $227.3 million, or 14% in constant currency, driven by a shift toward premium products such as the MX Master 4. Video Collaboration sales advanced 11% to $185.3 million, extending demand from workplace customers. The company also gained about 220 basis points of share across personal workspace products.
Logitech Faces Weakness in Select CategoriesKeyboards & Combos revenues rose 2% to $227.8 million, as strength in the Americas offset weakness in the EMEA. Tablet Accessories sales slipped 2% to $89.4 million against a difficult prior-year comparison tied to a large education contract.
Webcam revenues declined 9% to $76.6 million, while Headsets fell 3% to $44.1 million. Other-category revenues dropped 12% to $22.5 million, reflecting softness in mobile and PC speakers.
LOGI's Regional Mix Supports GrowthAmericas sales grew 11% in constant currency, led by double-digit gains in Gaming, Keyboards & Combos and Pointing Devices. Asia Pacific increased 5%, with China outperforming the broader region amid strong execution around the June 18 shopping festival.
EMEA sales declined 4% as the Middle East conflict reduced regional growth by roughly 400 basis points. Even so, Logitech gained share in Europe despite subdued consumer and enterprise demand.
Logitech's Margins Benefit From Refunds and MixNon-GAAP operating expenses increased 14% to $320.4 million, reflecting higher investments in sales and marketing and research and development. General & administrative expenses remained controlled at 2.8% of sales.
Non-GAAP operating income surged 44% to $290 million. Excluding tariff refunds, operating income rose 14% to $229 million, showing that stronger mix and execution also supported profitability beyond the one-time benefit.
LOGI Generates Solid Cash Flow and Returns CapitalCash flow from operations increased to $166.7 million from $125 million a year earlier. Logitech ended the quarter with $1.75 billion in cash and cash equivalents, while inventories were $491.7 million.
The company repurchased $113.6 million of shares during the quarter. Management also noted that channel inventory remained within the operating ranges seen since the start of fiscal 2025.
Logitech Issues Cautious Q2 OutlookFor the second quarter of fiscal 2027, Logitech expects revenues between $1.19 billion and $1.22 billion, implying year-over-year growth of 0-3% on both a reported and constant-currency basis. Non-GAAP operating income is projected between $185 million and $210 million.
The outlook includes an estimated $20 million revenue headwind from a semiconductor supplier shutdown. Based on limited information, management sees a potential impact of up to $200 million in the third quarter, with the disruption expected to be largely resolved by the fourth quarter.
LOGI Maintains Long-Term Margin ViewLogitech has not issued formal full-year revenue guidance. Excluding the supplier disruption, management said demand momentum would continue at roughly the first-quarter pace through the balance of fiscal 2027.
The company still expects full-year non-GAAP operating margin to track near the high end of its 15-18% long-term target range. Strong underlying execution and the tariff refunds are expected to support that profitability level despite continued growth investments.
How Have Estimates Been Moving Since Then?It turns out, fresh estimates have trended downward during the past month.
The consensus estimate has shifted -6.77% due to these changes.
VGM ScoresAt this time, Logitech has a strong Growth Score of A, though it is lagging a lot on the Momentum Score front with an F. However, the stock was allocated a grade of C on the value side, putting it in the middle 20% for value investors.
Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.
OutlookEstimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Interestingly, Logitech has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.