What happened

Week to date, shares of Logitech International (LOGI 0.69%) were up 11.5% as of 10 a.m. ET Friday, according to data provided by S&P Global Market Intelligence.

The company reported fiscal first-quarter earnings results earlier this week that continued to show weak demand for computer and video conferencing accessories. But the company is making progress to bring inventory in line with demand. As a result, management raised its full-year sales outlook for fiscal 2024 ending in March.

So what

Logitech sales hit a peak in late 2020, as consumers rushed to buy PC peripherals for gaming and remote work. The reopening of the economy and macroeconomic headwinds pressured sales. Last quarter's total net sales of $974 million is down from the peak of over $1.6 billion reached in the December-ended quarter of 2020. 

However, Logitech is showing signs of a turnaround. Sales increased by 1.4% over the previous quarter -- the first sequential increase in the fiscal first quarter in two years. 

Gross margin was also down year over year but grew 2.7 percentage points over the previous quarter. The reduction in inventory translated to a $275 million improvement in cash flow from operations. 

Now what

Management noted steady progress on key business metrics in the quarter and raised full-year sales guidance. Fiscal 2024 sales are now expected to be down between 19% and 14% compared to the previous range of 22% to 18%.  

Even though sales are still down year over year, there are clear signs that demand is stabilizing. The stock entered the quarter selling well off its previous peak, so the cheaper valuation seems to be putting a floor under the share price right now.

Another catalyst investors will want to watch in the near term is the announcement of the company's new CEO, following former CEO Bracken Darrell's move to the new CEO position at VF Corp. Although Darrell led the company to strong growth before the pandemic, a new leader could spring new life into the business.