Logitech CEO: Shift of production out of China to avoid impact of U.S. tariffs is well on track

Logitech CEO: Shift of production out of China to avoid impact of U.S. tariffs is well on track

Logitech International's CEO, Hanneke Faber, has recently shared positive updates on the company's strategic shift to mitigate the impact of U.S. tariffs. Faber reported that the company is well on track with its plan to reduce its reliance on Chinese production, aiming to shift 40% of its U.S.-bound products out of China by the end of 2025.

The Swiss-U.S. company has been experiencing increased demand for its computer peripherals from businesses, which has contributed to its robust financial performance. In the first quarter of 2025, Logitech reported better-than-expected quarterly results, with non-GAAP operating income rising to $202 million and sales increasing to $1.15 billion [1].

Logitech's strategic priorities, particularly in the Asia Pacific region, have driven significant growth. The company is investing in shifting production lines to Vietnam, Taiwan, Thailand, Malaysia, and Mexico. This move is part of an effort to reduce the impact of elevated U.S. import duties and offset the costs associated with tariffs imposed by the Trump administration.

While the company experienced a 120-basis-point drop in first-quarter non-GAAP gross margin year-over-year due to tariffs and promotional costs, it has implemented price hikes in North America and cost-cutting measures to partially mitigate these impacts. In April, Logitech announced a 10% price increase in the United States to offset the tariffs [1].

Looking ahead, Logitech expects its sales to grow by 3% to 7% in the second quarter, with non-GAAP operating income projected to be between $180 million and $200 million [1]. The company's strategic shift in production is a key factor in its efforts to navigate the challenges posed by the global trade war.

References:
[1] https://www.marketscreener.com/news/logitech-reports-rise-in-quarterly-sales-ce7c5fdeda81f522