Logitech International said it will reduce its reliance on Chinese manufacturing to mitigate the impact of new U.S. import tariffs by shifting production of computer mice and other peripherals to alternative locations.
The company, which manufactures all of its products outside the United States despite the country accounting for 35% of its sales, plans to lower the share of China-made goods shipped to the U.S. from 40% to 10%. Logitech will move production to Vietnam, Taiwan, Thailand, Malaysia, and Mexico, where it works with contract manufacturers.
Chief Executive Hanneke Faber said the company would actively manage trade-related challenges. “We are going to play offence while exercising strong cost discipline and acting with agility,” she told analysts following the release of the company’s fourth-quarter earnings.
Logitech has been affected by Washington’s decision to impose a 145% import duty on certain Chinese goods. To offset the impact, the company has raised U.S. prices by about 10% and announced cost-cutting measures, including hiring delays and reduced spending on travel and other expenses.
Faber said the company’s diversified manufacturing footprint enables rapid adjustments. “While I won’t say it’s easy to shift volume, our team is doing a fantastic job at shifting volume fast to mitigate tariff impacts,” she said.
Logitech reported a 16% drop in non-GAAP operating profit to $133 million for the quarter ended March, missing analysts’ expectations of $134 million. Quarterly sales were flat at $1.01 billion, falling short of the $1.03 billion consensus estimate compiled by Visible Alpha.
Despite the earnings miss, Bank Vontobel analyst Michael Foeth expressed confidence in Logitech’s strategy. The company’s stock was up 1.5% in early trading on the Swiss exchange.
