Logitech CEO talks logistics

Bracken Darrell, Logitech CEO, untangles the supply chain and holiday supply fears on Yahoo Finance.

Video transcript

SEANA SMITH: Logitech reporting record fiscal second quarter sales, growing 4% in the quarter and more than 80% from just two years ago. So we want to talk about this and what we could expect going forward. We have Bracken Darrell. He's the CEO of Logitech. And Bracken, it's good to see you again. You're producing very strong results. You're growing your market share in a number of key product categories. Where are you seeing the most growth?

BRACKEN DARRELL: You know, our growth is pretty broadly distributed, but I guess our strongest this quarter was actually in keyboards and combos and the old keyboard. And our mice grew very strong there. Our gaming business was super strong. So it really had very, very broad scale growth. And we're growing market share across almost all of our portfolio.

SEANA SMITH: And you're doing this at a time when so many of your competitors are struggling. You know, many people and many companies, I should say, are dealing with supply chain constraints. I know that you're not immune to this, but you're able to navigate it. And you actually just confirmed your full year outlook despite some of these challenges. How are you managing this headwind?

BRACKEN DARRELL: You know, we have a couple of advantages. One is that while we're not immune to it, we have our own manufacturing. So we make about 50% of what we sell in our own factory. That gives us a lens, a visibility that other companies might not have. We also have some long-term relationships with many of our suppliers. We're a 40-year-old company. And so, that's the second one.

And the third one is we just have a fantastic-- I'm sure everybody else feels [INAUDIBLE]. We have a fantastic operations team led by [? Prakash ?] and [? Kendra. ?] And they have done an amazing job here and in sustainability at the same time.

SEANA SMITH: Bracken, when you're planning for this and, I guess, some of the challenges that you could potentially see over the next couple of months as a result of some of these supply chain issues, how long are you expecting some of these headwinds to persist?

BRACKEN DARRELL: You know, we're kind of buckled down and saying, OK, this could go on into next year. So we're going to keep an eye on it as we exit the year. But we're prepared for it to happen all the way through to occur for us, at least, all the way through the end of our fiscal year, which is the Q1 of most people's year. And then we'll see next year. We're going to be ready for if it continues, it continues.

SEANA SMITH: Are you going to be able to meet demand, do you think, for the holidays?

BRACKEN DARRELL: You know, we're certainly managing as well as we possibly can. One of the biggest challenges right now is actually logistics, you know, just getting stuff here. You know, it's been a real struggle. And that's a surprise for me. It's not something I've seen before in my career where you literally couldn't get containers to ship things over. But we're going to have a lot of product to sell. So there's going to be a lot of buying. And there are a lot of stockings to stuff. So we're available.

SEANA SMITH: Certainly, as I know, your products have been very popular, especially since the start of the pandemic. Bracken, going through some of your divisions, I know gaming was a standout. It grew 9% in the last quarter against 84% growth over the last year. What's fueling that type of growth?

BRACKEN DARRELL: You know, we think-- we sit on the-- we sit sort of right with four major trends that are driving the whole world behind us. One of those is the rise of gaming as a legitimate sport and as a pastime for more and more people. If you're under the age of 35, it's almost certain you game. More people watched the Super Bowl last-- more people watched the League of Legends final than watched the Super Bowl live, or about the same. And that's just one game. So it's going to be the biggest spectator and participant sport in the world. And that's just a long-term trend. It's going to keep going.

SEANA SMITH: Bracken, demand in the US versus what you're seeing overseas in Asia and Europe specifically, I know US and Asia was a little bit stronger compared to Europe this past quarter, but how does it all compare, and what do you expect to see going forward?

BRACKEN DARRELL: You know, I think the nice thing about that story is that it is a little bit stronger in Asia, especially in China, and that, you know, that's interesting because they're a little farther along in their reaction to what the pandemic has been than the rest of the world is. So demand continues to look strong over there, and especially in China. So it makes me feel good about the rest of the world. And then the other good thing is in all parts of the world, that the huge lift that we got last year has not subsided dramatically. It's actually, we're continuing on that level and even gaining on top of it.