Fisher and Paykel (ASX:FPH) expects Donald Trump’s tariffs against Mexico to raise its costs in FY26, with a full outlook report to be calculated.

Around half of FPH’s overall manufacturing takes place in Mexico, while the other half runs in New Zealand; and 43% of 1HFY25 revenues came from sales in the U.S.

In the meantime, the company doesn’t expect a net profit decline for FY25, but highlighted in FY2026 “the company’s costs would likely increase… acknowledging the economic environment… may be fluid over this period.”

“The company is currently working through the complexities associated with the imposition of the tariffs and will provide an update on outlook for the 2026 financial year as well as an updated estimate of the timeframe to return to the gross margin target, at its full-year results at the end of May.”

That gross margin target, which the company ‘continues to expect to reach,’ is 65%. Fisher and Paykel now see it being two to three years away, due to the new tariffs.

“Across the business, we are continuing to make improvements that reduce costs or improve efficiencies. This proven combination is how we navigate all the various cost challenges that come our way over time,” FPH CEO Lewis Gradon said.

Gradon did not mention, at all, the question of U.S. politics.

“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.”

FPH last traded at $34.35/sh.

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