Tariffs Concern Fitbit, CFO Said as USTR Floated Plan to Boost New Tranche 150%
Fitbit continues to worry about tariffs, its finance chief said shortly after the Trump administration said it might impose 25 percent (up from 10 percent) tariffs on $200 billion of Chinese products over intellectual property disagreements (see 1808010078). The company…
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is “navigating a number of different paths” to reduce or eliminate such exposure, said Chief Financial Officer Ron Kisling on a Wednesday evening earnings call. Fitbit uses Chinese contract manufacturers to produce its devices, and tariffs would increase the bill of materials costs of goods it imports to the U.S., said Kisling. There’s no certainty whether the tariffs “will ultimately go into effect,” or if wearable devices can qualify for tariff “exemptions,” or “how much, if any, of the potential increase in cost can be mitigated,” said Kisling. The full-year forecast “excludes the potential impact,” he said. “We support open markets and free trade where everyone plays by the rules.” One proposed tariff line “covers a wide variety of wireless products, including fitness trackers and smartwatches, which comprise nearly all of Fitbit's products,” said the company in comments July 27 asking to testify against the duties. Also, following Q2 results, the company's stock closed down 7.9 percent Thursday at $5.45.