Shares of Logitech plunged 11.1% to $99.45 in pre-market trading on October 28 after the company warned that a semiconductor supplier disruption would shave $70 million to $80 million off sales in its fiscal third quarter — the critical holiday period that typically generates its highest revenue of the year. Sales are generally highest during Logitech's third fiscal quarter (October to December) primarily due to increased consumer demand during the holiday season. The selloff erased roughly $1.9 billion in market value overnight.
The Supplier Accident That Snowballed Into a Holiday-Quarter Crisis. Logitech has been affected by rising demand for semiconductor chips driven by AI buildouts, and in late June 2026, one of its semiconductor suppliers experienced a serious incident at its manufacturing facilities, resulting in temporary closure. Management initially estimated a $200 million potential Q3 hit when first disclosed in July; after significant mitigation work, they now estimate the negative impact at $70 million to $80 million in the third quarter. That's a better number — but still large enough to push guidance to -5% to flat constant-currency sales growth, spooking investors who had priced in continued momentum.
Q2 Beat the Prior Year but Missed the Street. Logitech's Q2 revenue reached $1.22 billion, below analyst expectations of $1.31 billion, and GAAP EPS of $1.25 missed the estimated $1.47. Bright spots included video collaboration sales growing 12% and gaming rising 7% , but these couldn't offset a 30% drop in tablet accessories and weakness in Europe. The miss gives the supply warning extra sting: investors can't lean on a blowout quarter to cushion the forward view.
Margins Are Under Pressure Too, Not Just Revenue. Q3 gross margin is expected between 41% and 42%, a 200-basis-point year-over-year decline due to higher logistics and material costs. That means each dollar Logitech does sell will be less profitable, compressing the $220–$255 million non-GAAP operating income outlook and limiting the company's ability to invest aggressively in its 19 new holiday product launches.
The Path to Recovery Is Visible but Not Guaranteed. By the fourth quarter, Logitech expects the supplier disruption to be largely resolved. With a $1.5 billion cash balance and $406 million returned to shareholders this quarter alone , the balance sheet remains healthy. But investors are being asked to look past a difficult holiday quarter on faith that demand hasn't leaked to competitors — a bet the market clearly isn't ready to make at $112.