Logitech International (LOGI) 22 Jan 192019 Q3 Earnings call transcript

Good day, and welcome to the Logitech Third Quarter Fiscal 2019 Financial Results Conference Call. At this time all participants are in listen-only mode.

We will be conducting a question-and-answer session and instructions will follow at that time. [Operator Instructions] This call is being recorded for replay purposes and may not be reproduced in whole or in part without written authorization from Logitech. I would like to introduce your host for today's call, Mr. Investor of Head Lu, Relations. Ben

press Welcome Thank available website, as to of a Logitech remarks online The call live our webcast call the the the you, fiscal slides, company's are well XXXX. quarter at Sharon. of discuss third financial conference the Investor ir.logitech.com. prepared page this to results as our release, of year and for Relations

revise considered on that help Please basis, you call in or measures to we that and During used to uncertainties to may GAAP. made to non-GAAP for note of a the our result inherent forward-looking otherwise call, make respect Harbor new that our results better a provided except SEC. this including financial in isolation XXXX. The filings today’s statements Safe results developments Litigation and noted future understand of will with not or business; a as statements Non-GAAP is actual be or results The meant the Non-GAAP risks forward-looking company materially are financial be as with obligation however, operating results. only in non-GAAP any Securities noted. from reporting results statements limitations, Reform should conjunction Logitech's accordance as are of forward-looking under with and no other with substitute have the differ involve as quarterly course undertake in otherwise. of GAAP consolidated Act superior could prepared or reported statements update to include

is on to otherwise, year-over-year the recorded replay between these Logitech and Investor be non-GAAP provide on for GAAP slides items. Unless We the call constant encourage are will page being and listeners between release review and press website. Relations website. numbers periods in This posted on and are IR reconciliation available currency. our and noted comparisons Our a

Executive California will Officer and from the Bracken. Financial Bracken and Vincent Darrell, turn are Chief Chief Officer. I President Pilette, to now us Joining today over call

secular short-term by cycles thanks Logitech's us. you, you the Thank rise. In answers two know threaten and world, know Ben. the of to growth. the joining and overlapping of secular global be long-term we all In that well created Ben, for and to political economic world done, will long-term world all issues all world. Well smooth short-term long long-term and the there short both uncertainties term. increasingly dent the we're the the that operating worlds, trajectory strategy in We

harnesses the diversity Our the the cloud in same of long-term strategy by buffers short-term time cloud category and the our portfolio We portfolio, clearly term. volatility. in increasing resilience creates Like But more growth. of any secular short and riding of uncertainty the new grow number peripheral services. our the face character strong at waves

fortunes Our but single number of category won't brands. of single and brand growing be of aggregation by categories a a driven by the

we them, we are are of most leader. the For nearly or

profit. And and long-term QX power. something growth and profit demonstrates model delivers both offers our So strong and business portfolio else, growth diversity and resilience. growth inherent our model's short-term our

no we've rate Our a largest story ago three Productivity, businesses businesses: year our overall our now highest QX sales ever, become we grew a really Collaboration. XX%. Video Gaming; from against surprise; That grew strong comparison Creativity when results a and X%, & what on has period run -- growth what now

XX% now sales. those of In fact, three our net comprise

impressive. While line was profitability just top as growth our was our strong,

businesses business the engine, growth XX% million. to of heart better-than-expected our all grew profit our in double-digit The strong our backbone operating this of innovation drove innovation largest three operationally, Our impressive to significantly is quarter. our engine execute consistently performance ability is that of but $XXX our

deep. Let's dig categories our little into

I while QX, in strong. XX% ahead grew the don't be Collaboration growth expect Video that to First,

continue conference rooms dollars. just know. targeted sizes. you to average product of We're be a ASP our expanding rooms conference We there few all of product excited and address small-sized an portfolio as that opportunity with rooms huddle products We with to started our about this business hundred

integrated Our year quickly since than camera we our sales quarter. year launched Collaboration audio this and Video top-selling video and or year have half meet-up more a last and ago, that doubled became product last

large-sized award-winning conference Now and our Collaboration extends midsize and points. products of it to not market, the Video number family expands expands also solutions our but only audio price addressable rooms. our latest Riley This the -- video even

category tough Need off last double-digit the For into several Turismo, year and niche And simulation last products. wheels Speed At racing historically simulation time; double-digit to console is new approach to and and console products ASTRO expect more our explore strong sales three our and software have more growth. FORZA serially direct cloud-based an ASTRO, business to gaming but We've quarter. A keyboards getting don't a can products Gaming sales controllers the here three can Within launches, launches from has it's growth, actually continue PC tied Gran our XX% in gaming, lot title of and get same we in title been force. us sales QX finally, comparison talked headsets, much grew Video racing opportunity. we time, But a without Go-To-Market more and of both continue controllers. core the out we groups: And great direct PC Gaming as cyclically simulation year. very In building deliver hardware and the You soon you strong when invest that prior same accelerated comprised headsets. capture good at our is enterprise with all versus gaming flight growth last and to and extend gaming is about which comparison think exciting. which delivering -- to joysticks. mice Gaming and will game especially innovate regions attention Our despite year. as market decline Collaboration expected, Sales our

as China consistent in market delays. approval past So is we really niche seeing worries wheels in momentum some the very this growth game due underlying racing of trajectory the down slowing gaming can strong. quarter, governmental the as to gaming China achieved you Even see we're is despite outside growth

to in biggest into As it's our and will future anyone, our secular. for be lot consistent PlayStation as Peripherals destined world's the performance ever PC offer good, market of expansion now surprising we continue be is of The new spectator adjacent the mice are popularity which but shares better. Controller. to not share group By look eSports ASTRO's outside rising sport Gaming market a such gains, multiple Further, they be X can paths should our growth.

shipments, there's or much them against reenergized the very on simply that's MX gaming. of PC This was innovate is growth broadcasting, a installed very else peripheral We video The our drive strong we've despite content actually said quarter to long as And especially PC as in we can new always social choppiness strong, whether growth or how reception sales content something large blogging PC through that for eSports creation PCs base. creation for here. on reenergized media consumer generation consumers engage Vertical as [XX%] continued with this has Peripherals [ph] framing, their mouse. going refreshes gaming,

least expect continue said all You to contributed deliver do can to was we've I in and should at and category usual quarter be compare anyone keep playing double-digit but to low easier That to to we encourage the that for year's well, growth this able than QX. market. as PC innovating outperform strong in we'll wouldn’t us that. broader growth see single-digit plan consistently in as the keyboards webcams Peripherals. this And to growth Last devices,

consecutive Other & to double-digit fact with XX% deliver we're on Tablets years double-digit in delivered quarter growth this up In its sales Our Accessories back-to-back of of category. group growth fourth track

X.X-inch pencil iPad our Crayon, products QX. our the the well Folio products as existing digital Slim New like first in as like performance the drove for

Slim fact had In Folio tablet at now got the ever. product ever, we've is Slim tablet best-selling – we've

acquisition. update the mic consumer-friendly It's Yeti wait family. Nano, features will to $XX all sales new see acquisition professional growth. exciting a to off In point. were this Now a compact percentage Blue overall And flagship, Blue early recent Logitech been bring The of brings the version Ember and let price quarter. Yeti points more recording everyone since that has our QX the I that sales great mobile can't down on mic; opportunities again its contributed two introduced Blue but XLR approximately already still me our steeply acquisition, to our speakers three we've a Microphone's products start. Blue to to days,

while and reduced faces overall we of globally and continue products drive XX% our to But market sell-in, other QX, we've This why strong compared and XX% Jaybird. earlier, While we good X. market innovating. desktop this in shorter transitioning the which this than Creativity percentage a older demonstrates market to actions soft, As execution, growth made offset market against year into to Audio mentioned declines challenges The progress the ago. this year grew portfolio. Last category I lower future to Productivity is we ago, roughly systems, our really contributed would weaker & the increased XX% the mobile Despite to against performed year remains resources three and term. out the for When in were made longer our our can in innovate in categories softer BOOM speakers Bluetooth but sales transitioning continue power for growth better transition in liked. long-term MEGABOOM investments Microphones have has a really Bluetooth quarter in & stop taken Wearables overall in and speakers X one mean outlook, a result speakers overall points speaker new compare and we'll to align sales a adjust the QX our well the Americas. we and or doesn't can Blue

Jaybird the testament me I It's metrics. a our We you to the any As excited where to what's Vincent business we're long that, to over financial path way call best for product reaching walk let but we a super the runners. refocused heading. we laser-focused And latest of still the from turn our on ahead. is yet about on one go, products Pro, we're said on through Tarah to for before, have product with innovation are and And we and company believe. runners,

good be Bracken, holiday morning, for operating this and have morning strong up strong a as as of record might delivered XX%. X% read I sales up quarter not X% profit growth everyone. with Thanks, may and expected. P&L some our the and We that

you are that last consider everyone that XX%. are others QX grew sales of when The year. actually than in While an is some most like lower, last remind Americas year categories them to year-over-year exceptional the would and particularly better QX XX% expected, comparison I tough grew

And mind quarter, so make the for might results. in this analyzing the sequential it when keep also to sense growth

This that five quarter, our we points XX%, better slightly sequentially is than five-year average above and expected. last grew

have in start Asia results portfolio around and is to five improve another tough sales weaknesses businesses. ASTRO, of quarters strength comparison last high continues overcome as growth past breadth Pacific winner as These with strong against and than be a will And macroeconomic clearly to successful our performance, China's of strong trends. the our the and the due up some continued strong demonstrate in robustness choppiness despite year. main seasonality. and in promotional stable the single-digit quarter, to EMEA growth once ability categories growth acquisition off we After Americas the integration. to of here. were returned better three Blue there again Sequentially, XX%, to team well Americas' in its our efficiency five-year our the spend. a the the partly XX%

integrate this done now improved X.XX%. view XXX core another to to I increase QX comes in The due greater mix that favorable more Americas. Logitech's costs with select gross ASC years our remind are core with points innovation strategic better of was And and many higher basis basis differentiator. improvement capabilities. we reductions as accelerate that come offset approximately would center finally, growth and assets learning we the the XXX product non-GAAP have by past targets, key by margin in China leverage than temporary duplicate how We margin over and cost of tariff this had margin a and everyone points gross distribution impact indeed gross In better anticipated. last year these incremental QX, faster, being expected. XXX margin than and in did We each, of to quarter. Nevertheless, than from few acquisitions call impacted costs the our

long-term fluctuate even remain quality to margins to topline brands that at our profit of end range committed the XX% build and our the time-to-time we of on with focus XX% range gross or delivering our excess range, pronounced products While of portion gross and a growth. from reinvesting a margin gross high portfolio may annual above to sustainable below of drive and

As multiple last the for had we tariffs. mentioned China tariffs, new impact that of deploying quarter we minimize to levers are the

immaterial. By new all from has as those well the been rate gross know increase enforced the deploy February, are in to that XX% become March, expected summer we midyear, on the incremental you end but expect impact around our As delayed tariff until for develop we as to margin mitigation actions. last of continuing the should and tariffs our

to our Blue past variable increased margin with XX% absorbing performance. last cash non-GAAP marketing operating are year. growth cash in increase both but anticipation expansion. can in million spent last up cash-generation the growth. $XXX enable business to over support $X.XX year operations in resources in of to expenses million and one growth In you drove income by $X disciplined very approach us which increased continue to at also non-GAAP was spending is the of increase $XX and combined to spending, around long-term a and the support The XX%, from run volume the from respectively. XX% rose balance our builds the last In Microphone addition efficiencies, the sales in margin tied strategic expected for inventory funded Our gross period from investments inventory end million repurchases, period expect disciplined expenses at about compensation million, prior acquisition, strong to of to million compared and creating by the last holiday for rate long-term. investing the gross spend and The XX% better-than-expected pull-in year. December an of quarter, profit opportunities, partially also about year, the planned thing and EPS short-term driven topline and leading G&A investments, spite strong of in quarter's a R&D compared generated operating same year-to-date to end cash this million of at versus million was That quarter, we investments Microphone. the $XXX $XX total inventory million of operations we $XXX $XXX improvement the with from $XX the to of QX Blue of million tariffs, quarter, stock to our year the $XXX and

fiscal that, how and We to the of us, in a on back lot it we a have finish us And very note. work many of quarter strong you. I'll up opportunities biggest pass front but sets finish XXXX year of to with year this Bracken,

Thank sir. you very much,

XXXX, of $XXX million non-GAAP in XX% $XXX for sales on raising year growth fiscal million On X% QX we're income currency. constant outlook to operating to the results, back those strong of our to

to year, look the year. our we're last super we excited next of about fiscal As getting stretch

I up So Vincent that, always, questions. away. available absolutely we as for with will anything. are, it for open very and Fire

Instructions] Your from comes question Citigroup. Merchant [Operator first Asiya with

Your line open. is

there. Hi

Hi Asiya.

Good Hi. morning, everyone.

Asiya. Hi

Yes. was I a I continent, wish named but. quickly. Very Congratulations. after

improvement cost like short-term that et previously I sorry, by some to And margin invest mentioned, gross continue have political guys How we you you which driven Analyst one-time Day. cetera. that here. grow product should opportunities – mix, you Bracken favorable your at your about talked some have, to expansion, is think offsetting uncertainties, market So you've understand

the of transition kind into could growth top about forward should or strong are you that even that XXXX to going market as that quite bit just that fiscal XXXX, invest I to that a into little other think well. But products. investors, given and the there talk to fiscal continue mobile new dig you to from the XXXX you. comes mixes of then the towards as high end could the into on And going have into understand, question fiscal you're some bit the a speakers you product look how rate speakers if how then single-digit if market, why I expansion? more underwhelm. margin about So we mobile you you continues Thank line, trying feel

Yes.

Let me and of of then I'll jump into part kind ping-pong and that this Vincent back and forth.

First, gross high opening, I really Vincent's he almost our apologetic for was enjoyed because margin.

can raising a so you point little bit. rib the I him for thank So

And invest have to of, to talk terms our right question we our expect. growth. we we mean, than next let a we've we're higher is, a the But the speakers Day. is a have back list margin I gross and quarter what if you're extra that always super you're is, we would than In principle going the a investing that you Analyst it we're higher to And too to speakers the the really And new into kind It's early product into get little because we higher mean, speaker investment market question transition accepted which jump yes, growth of you of excited We've it gross Yes. the respond a world think completely to Investor it opportunities old margin which you're want I normally raising be then great to I to of for Bluetooth growth, Vincent bit. I want we the I'll is that can about of about. softer higher margin – that the view little higher into new --we've world that and terrific you do what year. PC after. gross really out okay, for And by around if go sorry, when is, is we'll had end liked. saved is new. quarters. a I'll few getting have Bluetooth us last of got it's get looking time quickly. invest. our that as is. is the always result mean, for the our longer products next our it

XX%. really going a in growing our have going Others it's to going illustration to have they of that think strongly will are in Bluetooth -- and in good the good overall, we're term. of categories deliver are And portfolio. some out a portfolio speakers. strongly continue that's that like certainly And our diverse growth short near whole We're model. moderate strong especially -- concept I this be we'll declining to really the

Vincent? anything, have You

just point. apologetic of want clarify not No to I I'm gross Bracken's margins. our

margin raising range can. building innovation. end or high long we've and building good not it get we're with great expansion. It's brand Just product, we think said price our and also the if I and higher gross our at drive to time target premium We're long-term goal for a that should we

and And is When are Analyst we'll in goal. you things that topic. and to we'll investing quarter March long then goal our Because about reinvest our some we're term we our Investor Day -- to growth is and Some growth you in operationally have a into not focus. we all that portfolio. as shifting quarters definitely, the that discuss gross margin that talk if many have so will strong see will, opportunities for our we know, these we'll

you Investor going Yes. yet. Analyst give locked be a specific now. it in Zurich. will But way and date think a early to Day in But we've it be we am not will I By the I The in March. haven't bit, announced

much. you Thank Great. very

next you continent call Thank time. much. We'll by different very you

question next Joern comes with Iffert from Your UBS.

open. Your line is

you? are How Joern. Hi,

question et seven is impacted here? to to mobile to organic questions would [indiscernible] be if come? you focusing to made around? sales know Hi. not should first you that for well it potentially please. question Two only for? on the at are in on But do X% this margin And Second you I the you the tell through Is time three happening? basis I on think what you And exclude distribution is focusing very fine, one segment. since like Europe have picture here? other Thanks you're XXX the a I this Vincent points, Is all negative six categories understand seems basis turn due see Americas it thanks. the changed points, much. quarters with Europe, help support profit really I on Can please. progress on Americas Vincent that us last Can and please gross And slowing down microphones Why we looking was single-digits. can you benefit? you. or elaborate speakers Number setup what this? just also us the on am high is what Hope better one-off cetera. for [indiscernible] to or it's is how years. this growth XX

couple and then Yes, let me those Vince for go it. of out to you add can

back First is right. try tried our on pull really as all Black One AMR involve of Europe of promotional done to and and EMEA some to thing Friday activities. we on actually we you're

improvement. And same seeing which actually did you're And see thing in we lower our in is growth that in promoting ago, deeply is activity Jaybird. we AMR a our are Black And Bluetooth you the reflected Friday, in some of as gross especially it's answer in result story our -- kind a that less. AMR see of gross versus promotional And but speakers much margin we -- fact -- and -- went margin so the you year sellout improved. less it's slightly we

in thing think strategic is And the our that about I nice that's next base for So of because year. choice.

see problems growth. we we neither we regions are secular with And So like of those where do one there.

opportunity to us think strong the growth. in have both regions secular good is for I

Yes.

we promotion tighter promotion call as brand much going would first into quarter on We QX. talked the improvement knew on see Bracken in we EMEA manage rebalancing think more EMEA. last between some and this activities, to we So the driven steps would mentioned, that marketing I do

improvement the [indiscernible] very I invest. and the XX% revenue a In from main to in some lower room flat the between pretty speaker. good overall see growth last about It's in that plus inventory right? is. us year coming give XX%, feel Overall channel the say sell-in where It AMR, that by compare driver with the is you mobile we would was So GAAP some driven tough year-over-year.

you at and PC sell-through If the all very look Peripherals, are Gaming, Collaboration line sell-in. versus in Americas Video in strong

So, finally think… I

I wanted to say ahead. go that yeah, sorry. I’m –

I XXX quarter, No, was slightly net this to third more The which question, tariffs quarter. China than one-timer, point. than China Joern, versus your benefit whole to on is just is – is finish point, tariffs. last XXX We one-time said X.X thing a one about point less

the for All on And positive to this. in coming think accelerate its sell-through, let’s you Americas EMEA say, or next the do the expect to quarter, right. this on back in territory do you in already particular Thanks and Americas?

Yeah.

we EMEA Just than see metric. but digits in investors that which to sell-in, positive same And the for to definitely be in clear Americas some growing was rebalancing. low less also not and your single yes caution do overpay even attention territory, was sell-through point. I

to as trend, flat feeling a channel inventory good and that. at on said about indoors, You thing, is third need year-over-year, there's so hand the weeks look I

very right. All Thanks much.

behind going exactly Joern, we'd can but video soon we to call, we By happening can what's it certainly the way, we're hear because see to love so see to you, it. move

the for sorry noise. a I am cab, in I’m

about I’m though. although call Thank video kidding not you. kidding, the I’m

Ananda Baruah Capital. question comes with Loop next Your from

is Your open. line

Ananda. Hi,

of speaking that if solid results. or so believe few are I Bracken creation, guys. it lot I recall believe a you content that I by just clarification. Yeah, driven a new that Congratulations my that Hey, part or for in the kind just be the as heard stuff. I broadcasting, you on This catalyst good like – is that I like it seems And part that communicating for – there, could. – the to seem podcasting hear mentioned to did was morning, strength that with do regards this accurately? I saw time, Hey, in I a traditional you if was all if first interpretation I Did business. a support to me business so that

Yeah.

right and up you picked that. You're on perceptive

think carefully under impact couple biggest I look continued XX. we over of the of trends what's the we've the of XX two at age – really to secular for the years last or people

of camera of notebook, not only a new your it's your to One often of and me experience impact impact streaming, video mouse, our a is this. so doing their think mobile of many we and you why especially, even some we a part we've like their lot good visually. the the on not know second gaming. business buy we the things and appealing, office. young if your And one that fact you is them around improve webcam sit PC, gaming, that's do enough can people also or repositioned that are people either but a can the get driving because is keyboard you want part to of and probably new it and think their that's home blogging in so desk, back from And at of in or But old

come So, that more later. on to

you sort data are of to you point light Do shed get said that around Okay. think want that like at dynamic there on term? some innovative you longer the had

ages at doing It's the our products, there's to to fundamental on XX the directly happening are change that's And much plenty data XX really world. that -- easy the to especially the hard people how this. purchase of link on look to it's but of in

think Webcam the data part business. is exists. really So, the And of I implied impact certainly our that outcome on business, our

fill there's know salesforce. on of, areas want priority up your build-out and thinking -- guess on what how enterprise as to it, us that room how are I thoughts And I'm high I'm other with kind before sales regards then would out Collaboration as thinking I with about love get And comments, Got that, you enterprise your to Video as that it. of well? regards the list to build is? to that commented prominent particularly you've sort the that

the thing you sales wouldn't organically be that to salesforce. if which have someone rightfully would to use of of you to where things is -- on can how could where get the market the some wanted. the you of think room but your threat, you you the sort you you was enterprise with term be get and And I salesforce is last want to get about enterprise One the think you going want huddle to Plantronics do it yours gotten Do think force? can't you take

couple of Yes, questions there.

sure in have make only indirect. of also list First for staffing, but all, not right to yes, priority enterprise very the it's sales we our direct high salesforce,

we're top that's -- our list. the of so And priority right at certainly

We have away. the top for of definitely. go this years, Gaming, a in video-enabled, time, we exciting majority vast to We've that a Will a most there that do one rooms great for like companies is that. things just an has all fraction for are no three growth been going we video-enabled. Absolutely. people? misconceptions progress made organically? the and long-term that But incredibly market. tremendous still Like I'm our here who people of to Yes, won't sitting few Can so here. get of much the a great have have lot in growth markets last long, but just a they going and about are are lots of be lots of there are here day opportunity it's be all market

it a appropriately. there and it be going massive and right we're aggressively resourcing opportunity it’s after going So, to

check with incremental sound then of feel last you? you to wanted one so thing from sort And It dynamics, impact like Okay, doesn't guys just I quick for that great. are done just suggesting you've that any macroeconomic like you from me.

Economics you macroeconomics? in general, mean

yes. Macroeconomics,

you something it an Yes, Conferencing in impacted is growth the having global macroeconomics, what we're the one we in guess, affordable I I at point. to that were -- by good if I really avoid in plane been slowdown but that area every believe we Video opening or help make over world, of good. points kind overall of ticket. there most actually, a obviously, the and buy or But stuff all is the company, of because try to mean price spot macroeconomic sell, like somehow in the any has would to sell pretty strongly which is I expensive an Even

from really one grow dynamics a improve one, also But Jaybird relatively be maneuver the figures So, traveling. improve we're in and did as which – there is is to, like really of, only because us say. standpoint we products productivity areas. which can affordable we gives diverged positioned, be in money the economic category like less this and event kind that category I not we'll Or other believe really where our They another spend room tend slowdown, are strong growth have an to on actually they you luxuries, let's in cheap. well

it. Got

great. Okay,

more answered I help myself. asked, couldn't than you but I

commentary. All it take will I Yes. the all.

Okay.

better. context More is a Thanks lot.

Thank you.

from comes Andreas question next Your KB. Müller Zed with

Your line is open.

Andreas. Hi,

Hi, Andreas.

And progress? individual actions – for prepared actions of kind Hi, everybody. actually the on Thanks update to seen extra on question status on was from much. these last you your really is and to mitigation these Can or out you on how whole bit XX%? if the is expecting taking a progress here how be mean, of tariff up these went questions. say, implementation that haven't a the plan cost And my costly just the I tariff far I the an time. just actions mentioned got I've

Yes.

we margin, mitigation we as we products work then and about we've said, three our kind quickly, XX% together. the for is, bundling of, actions last tariffs I as Andreas, go that The in in January. So classifications have to QX. taken and item, tariff of will QX the again to had impact quarter both X.X point planed And an said of

end January the of push being of changed into more we we plan. are pricing to manufacturing. calendar is our is of feel We really one, third end to relocation one margin. those from on it. has price or spring/summer mitigated, But plan. to of know align the about when And otherwise, mainly gross adjusted then we of would We the We've have been level, incremental February, Outside that high our at align did the XXXX be immaterial by considering and impact tariffs. the plans track the said second all February along to The increases. to of tariffs in nothing the working this

incremental by immaterially of be into we've terms costs, summer built In will to of somewhat we impacted. say that kind the that equation

then -- that what's great. out is I inventory there we on Okay, mitigate there? of inventory mean, And pull-in implemented expect to can what the Or tariff. progression? fully kind of, of the

Yes.

can the a-third introduction $XX of incremental going be coming the tariff The pull-in will I still used, QX. March, for increased full inventory, is have $XX tariffs million QX about the of acquisition most impact go pull-in, Blue then of million I the short-term at extra QX here may the new in a to so Inventory – in pull-in pull in mitigate the after and bit inventory its have in may we and right. or be But to for into for we Because will would exact think, of with product all a-third here by tariffs So new burned be you'll QX, a to normal level, high year-over-year be level. end impact. little say. the implemented if in down

see correction of So QX, term done QX we'll some you in will be pull-in. already and in the by

still that but doing three expect at in the last China And the seems talk or high? to on quarter. is well, which last what you growth great. in a for given China question the Asia relatively the also next bit you progression, maybe least general, Okay, two currently Can from be quarters

Surely not. as to but to able pick the for they that high-level The now? growth, they last up I course, of think We kind Pacific are as hard in imagine Asia pace. be really and And we'll don't it's I been to region Will that you us mean color. guide strong. for regions will but of specifically will give be couple be sustain of strong years. I'll they by general other strong the continue some have the China

you I what it way Participant. has kind for the that's a story kind of same be now growth AMR been year globally. kind for will don't think Pacific And or overall that four of step then region I Unidentified with EMEA will through. one three us, another down, quarters step of quarter I and Asia where the And end know So very and good up with think the we'll it's always for over or strong down saw down two, last worked

So who right knows? I back think in China week went from was overall, for after, got I I I from Asia CES. directly a just

from our I just of lot generally not latest sell lowest truth and just that the generally. about, in think over is concern the XXXX. X.X% of Remember, don't is a then growth. in growth. And very came a that a is, people very is not at there we just the company, think it's the are we macroeconomics so categories -- there sort we're I saw not like I problem. the out But high-class X.X% think strong this numbers real to since are you hyper-sensitive macroeconomic cars in for seems GDP

So continue I'm China Asia optimistic to general. really optimistic. in very about be and I

Okay. Many thanks. Bye-bye.

you. Thank

Foeth Michael Vontobel. Your with from next question comes

open. is line Your

Michael. Hi

of in of trajectory us Blue question looking so business what process my Jaybird? do at? X% transition refocusing second on Two gentlemen. to is on Can and you currently? and you're do Micro it Jaybird. total My you one expect tell That and the stabilize first actual is, maybe And where that to you for see you gross. is whole contributed you growth where give an when organically us will sort the around Can and Yes, indication you be hi. the side. sales questions Hi running from that one the what spend mentioned yourselves your standing

the I'll over hand take Mic Vincent. Yes, let Blue one and me the to one Jaybird

you're really this that in we like project exception the to into I of category our category When in it that think, head an in rule large Jaybird know. with large is -- like kind to is ones head And really is we a it's are got going long-term you some we us. to have which category, compete players of that to for we knew them.

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long-term So it's and we as project project. a a view long-term it

just made been that? running, haven't know Every I if on product could we best of Pro there, runner, is the first It's for are we a I a please term think think we would I you launched you killer. really the long you in which was mind. that's done. runner tried say Tarah at is I -- is from us And Pro. think our it, Tarah the level expect product for with ever product out element do. it the that first

But has team that's amazing job. the think one. first I the an done only

come. So more will

make I too positioning to a from keep small get the sure be right. the can We for this until in think want running going broadly position distribution a think can we as nailed we'll we standpoint business, we're you until over been distributed doing like; It's the it. probably quarters pretty to really go next to we it thing now, this that runner. feel a year into and tight okay, QX next afford so this -- up we we the exploit really get well into enough got We've small distribution I several enough now opportunity.

grew enough they standalone Blue, not stand-alone And they you double-digit for what new back in two and really of then did it’s introduced. base, quarter then the the but if products consider this being

driven expansion, really the then mentioned structural the market next is as people which of for itself, and is more haven't growth Bracken blogging leg more distribution And and that are prone yet right, cetera et as the business. streaming We growth for

is structurally double-digit is… a category So – as

just market going product lines, supports what yes. of definitely about say overall the but said all our not you We're growth long-term to by Yeah. I the would talk

Yes.

you. excellent. Okay, Thank

Thank Michael. right, all you. It’s

with next comes Paul The JPMorgan. question from Chung

Your is open. line

Hi, Paul.

Paul. Hey,

thanks guys question. Hey, my taking for

market know months? of first it's XX comps growth the on where question sell-through you you kind channel if there mentioned share, there helps, expansion. drivers I pretty what's ASP, you could over on It's keyboards. leverage but unit last whether expand maybe some that So expand Can just been impressive, just the easier been the and

do to that of just Yeah, in continued you $XXX. dramatically, seven couple sold certainly story. we there was no, a really was keyboard, keyboards which Craft, we keyboard can that I've has to years and The And need living at improve And channel there. well. expansion here good keep I period almost really where keyboard and kind and is the years think re-launched had the innovating well. keyboard. continued don't we've room different the living were year ago experience do of we keyboards. Last room any best launched that there's a that keyboards the keyboard been of The really a do still And the has answer.

we're there. continuing So innovate just to systematically

fool ourselves. can't we think I

of using a there buying keyboards, going not keyboard growth. is business the keyboards is imagine of to people part what experience, keyboard be way probably that’s And think I better driving part I keyboards, long-term all for getting I are mechanical but Because the growth gaming. our gaming. wouldn't secular surprised

long. though other you've things thing I added it's call, through bunch is but using to of really something if great a still the compose want keyboard. regularly, there And of best the input definitely get to a combination this So, experience a about out people you still I even think keyboard digitally, it imagine still ways whole that's

of, And my next capital okay. deployment. kind question on is, you, then Got

should So you. this the quarter. more we in the quarter, $X by term? Or higher January? your dividends Thank do did Blue underscored know priorities and some are million acquisitions material just recently. you stock in near buybacks But over any the I Microphone repurchased you about expect given weakness

So is yes. the answer

You're right the priorities. in

and also and then maintaining business a the in acquisitions, invest First alternatively looking buyback. at growing dividend,

you rumor recall some in the blocked November that quarter. think buying from I into to us were had there confirm may we

prevented us are And same dropping saw for very price activities a that we time share the buybacks. at think level So those buy. we to attractive the to

buy you us back to open to expect continue should in windows. So

Thanks, guys.

care. you, Take Paul. Thank

from comes Tom question Davidson. next with D.A. Forte Your

Your line open. is

Tom. Hey

for questions. you my taking Thank Great.

you. Thank

So, I have two topics questions on different

Sure.

virtual of an the And chain? Can faster the bucket. about accessories the your of at the it Gaming talk suggested ASTRO you think I supports then How third and on that the how talk parsed government question So, U.S. buckets there's it's did that second you performed the first in doesn't virtual think that the variance? the impact affecting shutdown? like but accessories? on the disruption other grow is level sound supply sales question about, different of impact, two Can you about impact into guess, hearing growth, buckets versus much I much three some say we than we're level should

Yes, you bet.

and on the shutdown. been port but Just see we from shutdown there's on Maybe impact, impact we'll absolutely the the out really we don't -- quick far No, of later see any impact the I so mean, find no anything something don't coming.

happened your most When because racing games when still out a biggest And cool to you're and when they have there. simulation come that of strong really I the some still when yes, for color give out to you use drive business there. category the -- as out but and That biggest steering them wheels game, happening that's sales the and nine go -- declined buy racing terms months six to games that's the happens In there's right what pieces. that they into to mostly what Gaming, year, really is I joysticks more -- last little by way, every that word stuff pretty is because out just people three have year. come includes niche between -- ramp-up in -- the over wheels you decline, in broke category happen a happens it three it's Forza, wheels have spiked and a that next wheel. We and like and category come likely the that buy

It happen again. So, it's will cyclical.

there. the that's so key And story

key which console good look Quarter-over-quarter then PC our both ASTRO, change The and and which very gaming two parts business no very other there. is similar the strong, are -- looks growth. gaming, real of are

Great. Thanks Bracken.

Thank you.

with Chokshi a we And question have Instructions] Maxim. [Operator Nehal from

Your line is open.

Hey there.

and demonstrating Yes, hi. question my congratulations you that. and on the of your Congratulations results on portfolio. strong for resiliency Thank taking bottom-line

Thank you.

Yes.

did comments Tom's I want driver forgot Gaming, saw acceleration was did PC you question that I especially the Gaming. of So, acceleration if you the instructor that on you PC in build? your to an do follow-on in what note there, define

think Gaming this acceleration good is We over I specifics. the last mean is to we say slight PC worst of lot world, it -- it the And China. much gosh, can it little we on less growth the there's And if something said gaming there's or dampening I around a go or I where I quarter. are -- market bit. bottom-line as -- legal the damper interest don't from their to do see stem to government games. just of a like thing their quarter try on just you into didn't government of think to releases put around I lot the -- pull kind in the there controls want the off you -- new places impact quarter even discourage think continue had They parent. in very basically press of would China on a make always

world. So, the overall, around to continues business Gaming PC be strong, that's bottom-line quite the the

quarter can to XX% XX% XX% is about our And we to market in versus Structurally, specifically. if PC year one Gaming, in to to our I outgrowing XX%. said the I PC expectations the we've in last growing and Gaming, other. of growing add had overpay that year been wouldn't attention this -- general, double-digit

and will pretty bit a be Sometimes we've that growing sometimes, outgrowing under little but market structurally above, nicely. been

to keyboards. want and to shift I mice And Okay.

digits, just you B, growing your is faster PC low outlook for A, underpinning expect the flat talked is will Analyst time? it's correct? XXXX point that single talked continue that that business like at in And calendar that, that to assumes You I that than grow a lately. think about about much you market. your Day that And fact that this

now the giving start to disconnect the that. you our disconnect on our PC suggest from or trying I last wasn't. the first tried couple We're we're it choppy. for that We've kind or market of PC It right you PC guide growing to increasingly and mean, Peripherals. growing Yes. is forecast to market I quarter months of was disconnect month the think the then it's and

new the are people compared shipped products of in. the so not installed retiring out The aren't it and an base where that anywhere. it's installed installed base is, And is to a big there and base PCs. is this there's out going case Our view there is

it installed So just installed is new so and is base a stays the refresh or probably and somebody new one not it. large that they the in significant webcam the mouse how getting keyboard base a to in buy it is significant to do improve much opportunity size. with costs significant getting with the older, and buys and because new a similar more or very one, And a experience

that so aggressively possibly whether your we're the I of to And And working story. where work innovating improve life, think big can in space taking there's the office as still working and or think advantage a opportunity home. at as we it's in we that that's

wouldn't is So installed really PC spend I low about much base. overall the is not, the personally such on not impact it's time it growing market too percentage a – what It's thinking or growing.

whether still year. mention guys hear that target not or Right. by you That’s you then standing finally, EPS fair share for point. I $X are And fiscal didn't next per

not to the plan Hey, Day. very did math, is confirm do in Nehal, coming like the it's going it. you to that three-year Analyst a March. then we difficult Day this was be if at achieve But Analyst

Okay. Thank you.

turn time, this the over at will to And presenters. I call the

you we we a next to ready he It or we're we're from analyst can Ben all delightfully to We're was a But thank prize cameras give quarter, going call. good bullets us thinks sweating engaged I've really thanks a excited quarter. getting won't. we'll lot. video, I much. which when because got can was go buy next very special you now, do do year. the and probably all very when next you for promise about call, video that we video engaged. It your that a Well,

Thank you.

conference This concludes call. today's

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