NZ's Fisher & Paykel Healthcare tumbles as US-Mexico tariffs threaten cost blowout

Fisher & Paykel Healthcare

02/02/2025 22:31

Feb 3 (Reuters) - Shares in New Zealand's Fisher &
Paykel Healthcare  FPH.NZ  were set for their worst session in
21 months on Monday as the medical equipment maker warned of
higher costs arising from the U.S. imposing tariffs on imports
from Mexico.
    The stock dropped as much as 8.5% by 2216 GMT and was set
for its biggest single-day fall since May 2023. It was the top
loser on the S&P/NZX 50 index  .NZ50 , which was down 1.8%.
    U.S. President Donald Trump on Saturday imposed 25% tariffs
on Mexican and most Canadian imports and 10% on goods from
China, starting on Tuesday.
    Fisher & Paykel Healthcare, which manufactures about 45% of
its volume in Mexico, received 43% of its revenue in the first
half of fiscal 2025 from the U.S. Moreover, about 60% of its
sales to the U.S. are supplied from its Mexican facilities.
    As a result of the new tariffs, the company's costs would
likely increase from fiscal 2026 onwards, it said. The tariffs
may have added two to three years to its goal of achieving a
gross margin of 65%.
    "The company takes a long-term view and will be working with
global suppliers and U.S. customers to provide solutions to best
mitigate the impact of the tariffs on all parties," CEO Lewis
Gradon said.
     The Auckland-based firm's stock is down 10% so far this
year, including the day's moves.
    
    
    

 (Reporting by Aaditya Govind Rao in Bengaluru; Editing by Lisa
Shumaker)
 ((Aaditya.GovindRao@thomsonreuters.com;))