Logitech has warned that things are about to get worse before they get better after it revealed that profits had dropped by 70 per cent during the third quarter to $40m (£27.6m).
The impact of sales took its toll of the bottom line of the company. Sales were down 16 per cent on 2007 to $627m (£432.5m), with the firm saying gross margins had fallen seven per cent – and laid the blame on the doors of steep price promotions of retailers.
The vendor revealed that sales fell heaviest in the US and Europe, down 21 per cent and 19 per cent respectively. Only Asia saw growth, up eight per cent on 2007.
Such is its uncertainty about how bad the economy will get before it gets better, that the company broke with tradition and did not give financial guidance for the forthcoming year.
"All indications point to an even weaker retail environment in the coming months," warned Logitech’s chief executive Gerald Quindlen in an interview with the Financial Times. "It’s such a difficult environment to make predictions. It’s too hard to forecast the March quarter, let alone the next financial year."
"Our plans assume that in Q4 we will see year-over-year declines in sales, operating income before restructuring charges and gross margin that are similar to or worse than the year over year declines we experienced in Q3," he added.
"We’re taking these steps in anticipation of an environment we think will get worse before it gets better."