Medical devices and equipment manufacturer Fisher & Paykel Healthcare (F&P Healthcare) has warned that costs are likely to increase in the 2026 financial year (FY26) under the new United States tariff regime.
The dual Australian and New Zealand-listed company said its costs would rise as a result of the U.S. decision to impose a 25% tariff on products imported from Mexico, with effect on or after 4 February 2025.
F&P Healthcare said it manufactured about 45% of its volume in Mexico and 55% in New Zealand and, for the first half of FY25, 43% of its revenue came from the U.S.
About 60% of U.S. volumes are supplied from the company’s Mexico manufacturing facilities.
“The company does not currently anticipate a material impact from the announced tariffs on its net profit after tax for the 2025 financial year,” F&P Healthcare said.
“For the 2026 financial year, the company’s costs would likely increase due to the introduction of the new tariffs, acknowledging that the economic environment, global response to US tariffs and foreign currency movements may be fluid over this period.”
The company continued to expect to reach its gross margin target of 65% through continuous improvement and efficient growth into existing infrastructure but the tariffs may have added two to three years to that expectation.
F&P said it was working through the complexities of the tariffs and would provide an update on the FY26 outlook and the time-frame to return to the gross margin target at its full year results at the end of May.
Managing Director and CEO Lewis Gradon said the company took a long-term view and would work with global suppliers and U.S. customers to provide solutions to best mitigate the impact of the tariffs on all parties.
“Fundamentally, our products and therapies are designed to improve care and outcomes for patients and to reduce the overall costs of providing healthcare,” Gradon said in an ASX announcement.
“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.”
Fisher & Paykel Healthcare (ASX: FPH, NZX: FPH) shares closed on Friday at A$34.35, down 33 cents (0.95%) on the day, after ranging between $33.83 and $34.82, and capitalising the company at $20 billion.
