Logitech Increases Spending on Product Development as AI Opportunities Emerge
Logitech International will boost spending on product development and marketing this year despite growing concerns about a global economic slowdown, CEO Hanneke Faber said. The Swiss-U.S. maker of keyboards, mice, and video-conferencing equipment is betting on gaming, business customers, and AI-enabled devices to sustain growth.
The company plans to keep total operating expenses 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. Research and development spending should reach around 6% of sales this year, while sales and marketing spending will also rise from about 16%.
"We can and we should invest," Faber told Reuters. "The world is changing so fast with AI, which offers so many opportunities."
Supply Disruptions Add to Costs
Middle East disruptions will cost Logitech about $15 million in sales this quarter, after a $5 million hit in the three months to the end of March. Some products could not be delivered from Asian factories to the company's distribution center in Dubai and on to other parts of the Gulf and Africa.
Demand for Logitech's products remains intact, Faber said. The logistics challenge stems from shipping constraints, not a drop in customer interest.
Gaming and Business Markets Show Resilience
Gaming remains a key focus for the company. Younger consumers are spending more time playing computer games, making the market resilient even as broader economic concerns mount.
Logitech is also stepping up efforts to win more business customers. Companies with strong recent earnings are investing in new computer hardware, creating demand for the company's products.
The company is exploring healthcare, education, and government as long-term growth areas.
Financial Outlook
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.
The company has been shielded from oil price rises that have made plastic more expensive. Seventy-eight percent of Logitech's products use recycled rather than virgin plastic, reducing exposure to commodity cost increases.
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