Logitech Stock Plunges Over 10% as Supply Chain Warning Eclipses Earnings Beat

Logitech International (LOGN) shares tumbled more than 10% after the company's strong second-quarter earnings were overshadowed by a warning of a significant supply chain disruption that is expected to weigh on its crucial holiday quarter.

Guidance Overrides Strong Results

The computer peripherals maker reported adjusted earnings per share of $1.51 on net sales of $1.22 billion for its second fiscal quarter of 2027, according to results released October 27. Both figures surpassed analyst consensus estimates, which called for $1.30 in EPS. The 3% year-over-year revenue growth marked the company's eleventh consecutive quarter of expansion.

Despite the beat, the positive results were eclipsed by the company's forward-looking guidance, which dominated investor sentiment and triggered the sharp sell-off.

Supply Chain Woes Hit Holiday Outlook

The primary driver for the stock's decline was the disclosure of a serious incident at a semiconductor supplier's manufacturing facility, which forced a closure in late June. Logitech provided a sobering outlook for the impact on its third quarter, which includes the holiday shopping season.

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Key guidance points for the third quarter include:

• A projected negative revenue impact of $70 million to $80 million due to the supply disruption.
• Gross margin is expected to contract to a range of 41% to 42%, roughly 200 basis points below the prior year.
• The margin pressure was attributed to a combination of the supply issue and elevated costs for freight, logistics, and materials.

Market Reaction and Context

Compounding the supply issue, CEO Hanneke Faber described a "K-shaped" consumer environment, where premium shoppers are spending freely but mainstream customers are seeking discounts. This suggests higher promotional spending may be necessary, further pressuring margins.

The stock's sharp decline was reportedly amplified by profit-taking, as shares had rallied ahead of the earnings release. The move was idiosyncratic to Logitech, as the broader Swiss Market Index had closed higher, indicating the sell-off was driven by company-specific risks rather than a wider market downturn.