Q1 2026 Logitech International SA Earnings Call
Virtual reality.
In recognition of all of our teams innovative design and engineering work Logitech was named one of Fortune's most innovative European companies for 2025 in the quarter.
Doubling down on B to B is another important strategic pillar.
Logitech for business demand outpaced our consumer business demand this quarter led by double digit net sales growth and video conferencing.
Blood checked for business progress reflects the strength of our portfolio of simpler smarter more sustainable enterprise solutions.
And the opportunities in services and new verticals.
Finally, we drove very strong execution around the world.
In Q1, APAC results, particularly stood out we're seeing meaningful progress from our China for China investments.
Our China team achieved a significant milestone in may when they returned to growing share in a very fast growing Chinese gaming market.
As we look ahead to the second quarter and beyond we expect continued uncertainty when it comes to tariff policy to inflation and customer sentiment.
But logitech has proven time and time again that we are uniquely built to thrive in times like these.
Our businesses globally balanced with about two thirds of sales generated outside the U S.
Our diversified manufacturing footprint spans six countries and gives us flexibility and resilience.
Our strong brand provides loyalty and pricing power.
Our pristine balance sheet offers financial flexibility.
And most importantly, our experienced team continues to execute at the highest level.
So in Q2, we're going to continue to play offense to drive growth and market share gains.
We will maintain rigorous cost discipline and.
And we will act with agility to respond to evolving market conditions.
The fundamentals of our business are strong and our strategy positions us very well to navigate uncertainty and deliver attractive results.
So with that I'll turn it over to you alright. Thank you Andrea and thank you all for joining us on the call.
So I'll extend my gratitude to our teams around the globe for the strong execution during the quarter.
Our teams demonstrated became operate under challenging market conditions operating with agility, while making solid progress towards our overall goals.
And as you've seen from the financials that we published earlier today.
We began in fiscal year, 'twenty, six with strong execution and focus.
Sales were up 5% year over year in constant currency supported by continued robust demand across both the consumer and B to b.
Despite significant external headwinds, we increased our profitability and generated strong operating cash flow.
And as expected this fiscal year started with selling in line with sell through and we delivered another strong year over year growth across all our key product categories.
Now a couple of highlights to mention.
Video collaboration deliver 13% year over year growth driven by strong North American demand.
Personal workspace grew 6% year over year fueled by double digit growth in web cams and tablet accessories and this marks the fifth consecutive quarter of growth in tablet accessories.
And on a regional level Asia Pacific grew 15% year over year led by sustained double digit growth in China.
EMEA grew 9% driven by strong demand across all product categories, While North America declined 4%, primarily the result of a pause in some part of shipments during price negotiations, which are now largely complete.
non-GAAP gross margin rate for the quarter was 42, 1%.
And this reflects a 120 basis points decline from the first quarter of last year due to the negative impact from tariffs higher promotional spend and a release in inventory reserves recorded in the prior year period.
These were partially offset by price increases in the U S and the continued momentum from cost reductions.
Operating expenses declined 2% year over year and were 24, 5% of net sales down from 26, 5% in the first quarter of last year.
This decrease was driven by operating leverage and a reduction in G&A as a result of the measures that we implemented to mitigate the impact of tariffs.
Cash flow was also strong we generated $125 million in cash from operations and ended the quarter with a cash balance of $1 5 billion.
We returned $122 million to shareholders through share repurchases, which is consistent with our capital allocation priorities.
So overall this quarter brought continued macroeconomic operational challenges.
Notably and approximately 100 basis points negative impact from the U S tariffs and the response, we diligently followed the strategy that we outlined in the last earnings call.
Which allowed us to increase profitability for the company by 80 basis points in non-GAAP operating income.
Now more specifically for.
First we implemented price increases in North America.
The execution of this price increase is now largely complete and we expect the full benefit to be recorded in the second quarter.
Second we executed.
Cost saving actions, mostly in G&A around controllable expenses.
And third we continue to leverage the strength of our balance sheet and accelerated the acquisition of inventory in advance of tariffs going into effect.
Now looking ahead to the second quarter.
We are expecting net sales to grow 1% to 5% year over year in constant currency.
Gross margin rate to be between 41 and 42%.
And non-GAAP operating income between 180 and $200 million.
We are expanding the negative impact of tariffs in the second quarter to be between 200 entry onto the basis points, which will be partially offset by 200 basis points of positive price as a result of the price increase that we executed in the first quarter.
So in summary, we delivered solid results in the first quarter I want to thank all our teams around the globe for their dedication and flexibility.
So with that let's open the call for questions.
Thank you Matteo will now begin the question and answer session. Please be sure to on mute and turn your video on before asking your question with that our first question comes from Didier with Bank of America sit here.
Yes. Thank you for taking my question.
I just wondered if you could share your thoughts on.
Sort of the.
Consumer reaction to your price actions so.
This had a positive impact as you might have the number for the current quarter. If you could just remind us what the pricing benefit in the quarter was versus volumes.
And what's your.
What's your view.
No.
Yes, sorry about this.
So what's your view on the consumer reaction were you positively surprised by the volumes.
Response to the price action the price hikes, if you want that you've done in the quarter and is that encouraging you to raise prices further.
In order to compensate for the tariffs impact.
Yeah, Yeah, Thanks, Sanjay good to see.
So the positive impact of price in the first quarter was 50 basis points because of course, we only announced the price increase mid April and then as usual it takes about four to eight weeks to get it fully implemented across the trade.
It's really too early to say much about the impact on the consumer because again, we only completed the implementation towards the very end of the quarter. So you didn't really see the new prices on shelf across the U S trade until the end of the quarter. So that's hard to tell them what.
We do know and this is expected is that the negotiations with our customers took us four to eight weeks to get this fully implemented and during that time, we did see an impact on in stock levels and on shelf availability, which again is expected during price negotiation and it temporarily affected.
At the net sales, which you see in our in our America's net sales number.
However that implementation is now essentially complete in stock levels have recovered.
And this positions us really well for back to school and for the holidays.
And a quick follow up would be on on the.
Video collaboration business, which as you know shrink for the strength.
Is that just can you elaborate a little bit on that and how confident that this trend is sustainable into the later part of this year.
Yeah. So obviously very pleased with 13% growth in D C and <unk>.
Overall that business is strong.
Very strong demand in North America actually there may have been a little bit of pull in in North America in advance of the tariffs so that that wouldn't repeat.
And EU was a little low on inventory at the end of Q4, so they had to bring in a little more insight the first quarter and but at the end of the weeks on hand are still at a very healthy normal operating range.
Okay.
Lastly plays it but still a double digit growth numbers that really good number for V C showing the underlying strength of that business.
Thank you so much.
Okay. Our next question comes from Tim long with Barclays.
Thank you.
Two if I could it sounded like first one b BB was pretty strong this quarter.
Just walk us through kind of it sounds like video collaboration but any other moving parts, there and just remind us on the kind of economic financial impact of growing the BTB in the mix.
And second on the gaming side, a really strong quarter. It sounds like some new product. There can you talk about kind of sustainability.
The strength that youre seeing in the gaming vertical.
Yeah.
I'll, let <unk> comment on launch set for business and economic impact, but it definitely was another strong performance.
Tech business.
Demand in that space outpacing consumer demand.
And that's really true across our full logitech for business portfolio, which as you know consists of paid up the U S as well as video conferencing and headsets.
And all of that despite the 7% price increase so which applied across BW <unk>. So that's really good to see.
Yeah, we continue to strengthen our capabilities and BP.
Now we now have a global partner program and 135 countries. That's one place where we needed to improve and we're also continuing to grow in those new verticals that we've talked about and education had another quarter of double digit growth. So all of that has got the same hotel you want to just comment on the PMD.
Generally videoconferencing is actually positive for us in terms of mix the margin on video conference.
Could you average that comfort.
It's a good product.
Yeah, and then on gaming yeah.
So we're very excited about the strength of both the gaming market and our gaming business.
We saw very solid share growth in gaming in North America in the quarter and China was really outstanding and the market continues to grow very very fast in China.
And we also had strong growth you saw our APAC numbers, we don't break out China about APAC, because that plus 15, China was significantly ahead of that so it's great to see.
And a big milestone for US is the fact that in May. We finally started gaining share in gaming in China, which is awesome. We're number one but we've been losing share for a while so.
That's a good one swallow does not make summer, but you got to start somewhere.
And then across the World we saw good growth in our premium segments on gaming, So pro and say I'm, a real priority for us and we extended our partnership with Mclaren and we launched a really exciting new headset that $5 22, so lots of great things in gaming and that's just a long term real.
Any big bet for us.
Thank you.
Okay.
Our next question comes from Lucas with Behringwerke requests.
Yeah.
Okay. Skipping ahead. Our next question will come from Martin with BNP Martin. Please go ahead.
Yeah.
Hi, guys.
Okay.
Yes.
Maybe can you talk about the just the demand pattern.
In Q1.
Anything different compared to typical Q1 through the tariff coming after you seeing demands increase a lot profit tariff announcements and then paid off towards the end of travel you wanted in the U S.
And then the <unk>.
Second one is really more on just market share competition.
You wanted to pay off and obviously in this.
And the environment.
You talk about how you generally see yourself positions I mean compared to peers with regards to.
Your current production set up on pricing.
A quick could you potentially gain.
<unk> Chan and raise prices further on the back of your potentially better production footprint. Thank you.
Why don't I take the first one.
Okay Martin so.
And your first question. So we're very pleased with the demand in the first quarter.
It was high.
High single digit for the company and overall it was pretty broad based when you look at.
Both the B.
<unk> ended up in the consumer.
Were up nicely to be actually outpaced abate the consumer but overall very very strong.
And it was also broad in terms of product obviously.
You had a couple of big deals.
Improvements year over year with tablet accessories, which grew double digits in all the other product lines were.
In the high single digit that's what I was really really good and broad based demand and also geography geographically.
<unk> at this point.
It was very strong in AP in you.
Okay.
Relatively flattish in North America.
To your question in terms of.
Paul and I go back to work on like I mentioned earlier, we have not seen that on the consumer side, we have seen a little bit at the beginning of the quarter on the b to b side with the customer trying to pull in some of the app.
The product like we did with our own suppliers.
In advance of tariffs, but when you look at overall the quarter is the impact of this pull in was overall immaterial. So remember it was overall pretty good and broad based yeah, yeah and in terms of shares.
We saw share gains in a number of categories at a global level.
And I was particularly encouraged by the fact that across all our key categories in the U S. Our past three months, we saw share growth, so PWM gaming and video conferencing.
The impact of price on share really is too early to tell the last share reading we have is through may.
And in the U S, our new prices or not fully reflected on shelf.
By the end of May so we have to read that carefully I do expect a temporary.
Softening of shares after a price increase that's what you tend to see but it's a temporary effect.
And we'll take it from there.
Great. Thanks, a lot thanks Martin.
Okay. Our next question comes from.
Michael with Fundable Michael.
Yes, Hi can you hear me.
Okay.
On the results.
I have two questions.
First one is on your inventory.
So strategy.
Sure.
How are you going to proceed in.
In the current quarter in terms of.
No acquiring inventory and what effect it will have one on net working capital and cash flow.
The second question would be on the tablet accessory business growing into obviously now back to school for a quarter and how you're lined up and we will work towards what youre expecting for fourth quarter on tablet accessories.
In your guidance.
Yeah. Thanks, why don't I take the tablets and then we can come back to inventory. So cameras are already part of our business.
It's quite strategic and that 50.
That you saw in the first quarter. We're pleased about for two reasons tablets are designed for a fast growing segment of people that work on the go which is all of us in this virtual.
And so that's a growing segment and second as you just pointed out Michael.
Serve the important education vertical.
And when we can serve them K to 12 young children with our products, we create a lifelong relationship with that consumer. So it's a long term strategic kind of first product that.
People getting their hands from logitech, so very important.
I think the other thing that we're pleased with us since the launch of the combo touch now.
Over a year ago that was a great design led innovation that importantly, also significantly improved the margins of the tablets. So it's a much more attractive business for us now than it was 15 months ago.
So all of that is good we expect another.
Good quarter, because as you said, it's back to school and so we expect another good quarter for tablets in Q2.
As people around the world students around the world to go back to school.
In Asia in the U S and in Europe.
Yeah.
Michael for on your question on inventory. So we if you go back.
On the last earnings call, we when we laid out the strategy that we.
We were.
Two.
Execute on to mitigate the impact of tariffs.
We said that we have a great balance sheet.
And we wanted to be opportunistic and use leverage the strength of our balance sheet to try to pull in some inventory ahead of tariffs being into effect.
And that was.
Sure he and the team on the operation done a marvelous job.
They were very successful in doing it in the first quarter and actually when you look at the.
Okay.
The gross margin that granted earlier today, we came in on the higher end of the range that we provided three months ago and Thats one of the reasons. The team has done a fantastic job. So we want to continue to operate under the same identical framework because as you've seen in the first quarter results. Notwithstanding the fact that we pulled in inventory so the inventory.
Balances a little higher than last year.
And.
We still closed with $125 million of operating cash flow, our cash balance of one 1 billion and a half and cash conversion days.
Thanks to very strong collections that we continue to see also in the first quarter closed around 40, which is the framework that we outlined even endovascular day, so our strategy will be unchanged.
If we can and we will pull in as much as inventory as possible to obtain the company our customer <unk>.
Leveraged the strong balance sheet that we have.
Thank you and transfer you will accelerate your buyback given the.
The balance sheet position.
Not very intensive in the.
Quarter.
We have been pretty consistent if you look back to the last three four quarters.
<unk> bought back between 120 and call it the $130 million of shares we had one uptick back in I think it was the third quarter of the last fiscal year, where we are.
There was a dislocation in the stock price and we opportunistically buying back more.
But overall I go back to what we said at the Investor Day right.
We clearly laid out the capital allocation priority of the company and we said that we are targeting a 2 billion buyback in three years and we will follow that.
The realigned in March.
Perfect. Thank you Youre welcome. Thank you.
Our next question comes from Assia merchant with Citi.
Okay, Great. Hopefully you guys can hear me. Thank you for taking my question can I ask a little bit on the guidance for gross margins.
If you can just feel that a little bit I think I heard there was some benefit of inventory reserves.
That impacted gross margins this quarter and how should we think about that next quarter.
As well and just if you can unpack the guidance relative to the tariff impacts that you guys are seeing and I think in the past you had expected a much worse, a tariff impact, which obviously doesn't seem to be working through right. Now so how should we think about the guidance relative to that thank you.
Sure Rajeev. So let me maybe the best way to answer the question, we start with the first quarter that we disclosed.
And give you a couple of new medical data points.
So overall, we're very pleased with the performance on the gross margin on the higher end pretty much in line with what we said on the higher end of the.
Of the outlook that we provided three months ago. Thanks to the work on cost reduction and some of the comments that I made earlier to Michael's question on beer on the inventory when you unpack the.
120 basis points year over year decline you have the tariff impact was about 100 negative basis points offset by 50 bps.
Basis points positive price that I mentioned earlier, so net net the tariff impact in the quarter was negative 50, which was slightly better than what we had anticipated at the beginning of the quarter, but overall call. It roughly nine I think that when we talked about three months ago, we were expecting.
100 basis points negative so in the zone.
And then year over year, we also had about 50 basis points of pressure due to inventory reserves that were released in the prior year in the first quarter, which did not occur in the first quarter of this year. So that's how you unpack it the 120 basis points of.
Deterioration in the year over year comparison on the gross margin for the first quarter now when I move when we move to the <unk> to the second.
Second quarter of last year, the gross margin rate was 44% and here is where it's important to remember then last quarter last year in the second quarter, we had a sizable release of inventory reserve, which benefited the gross margin by about 100 basis points and we even said at the time this was.
There was not going to repeat so really the number you have to compare yourself is about 43% right.
And so from there we would expect the tariffs to impact about 200 to 300 basis points negative, but this will be offset by the 200 basis points of positive impact from price to the actions that <unk> mentioned earlier.
And then we have about roughly a 100 basis points of year over year.
Pressure on the gross margin coming from slightly higher promotion net of FX. So thats your walk two to <unk>, 41% to 42% so overall.
Performance on the gross margin rate should be pretty much similar to what we have seen happening in the first quarter and the impact of tariffs.
Net of ever Gainesville tariff metal this diversification and active price is between zero to 100 basis points negative.
Okay, Great and just if I may like as you look ahead is that kind of what we should think about I mean, typically you do have some promotional expenses et cetera.
Back half of the back half of your fiscal year. It tends to be slightly margin dilutive versus your first half. So how should we think about the gross margin trajectory for the rest of the year. Thank you.
I think the situation is still pretty volatile.
In terms of macroeconomic impact we'll have to see is drawn at this point.
What is going to happen with the consumer the price elasticity, even in the second quarter. So I think making any comments beyond the second quarter at this point is a bit premature.
So I'm going to leave it like that.
Alright, Thank you very much.
Kim.
Our next question comes from semi with J P. Morgan.
Yes, hi, thanks for taking my questions.
So the first one in the fourth quarter you have about mid single digit growth in revenues sell throughs pretty similar mid single digit youre guiding to one to five for the second quarter or how much of that is sort of what you're embedding in for what you've been sort of highlighting is shift changes on account of pricing because I would.
<unk> you also get the benefit of pricing on that front as well.
Okay.
You saw it, particularly given that you have benefit of pricing and maybe sort of addition to that you have the Americas.
Was that you're highlighting in one queue that impacted you. So how do you expect that to play out in <unk> do you expect inventory replenishment and <unk>.
In the in the region.
Yeah, It's a great question to make so you've seen that we've we've guided for the quarter with a fairly broad topline range, 1% to 5%. The high end of that assumes that the market remains resilient and that the impact of the U S price increase on the consumer is modest so that would be the high end.
Conversely, the low end and we would see some more deterioration in consumer sentiment and a longer lasting impact of the price increase in the U S. On the consumer so that's kind of how we think about the book ends of that of that range.
And anything in terms of how you're thinking the Americas pause sort of plays out in terms of <unk>. It and then just for my follow up.
If you can just sort of clarify foot tariff. So as we go into <unk> are we largely assuming with the price offsets you're neutral on the gross margin without us. Thank you.
So the.
So that for the first part of your question when you break down the regions to Anika point.
We are expecting.
AP you saw how the performance in the first quarter was great and we think that will continue into the second quarter on the top line.
Europe had good performance in the first quarter high single digit maybe a slight deceleration.
Due to the inventory dynamic that <unk> mentioned earlier, but overall, we're expecting Europe to continue to perform very well and then the.
The range really comes down to North America, and Thats exactly what Hanukkah just described.
In terms of.
Expectation for Pearsall.
That's a tough question.
They are.
We said for the second quarter of the current date.
The current tariff environment.
We're expecting the impact of tariffs to be.
Between zero to negative 100 basis points.
This all inclusive so tariff costs net of manufacturing diversification and that of the price increase.
With the current tariff environment, if that were not to change that would be a good proxy also for the remainder of the year.
But we'll have to see what happens with legislation insurance reform. That's all we can say absolutely.
Absolutely I mean, it is some people think everything is now settled but it remains a moving feast.
The expected tariff impact on our U S volumes of the countries, we make in China, plus five is not entirely clear so to tariff policy isn't entirely clear that product classification with suites to exemptions isn't entirely clear.
And then of course, what also impacts the tariff rates that we see in the P&L is our own manufacturing footprint and when things change our own mix.
In our own strategic inventory decisions. So there's a lot of variables.
Which is why we don't break all of those out because we drive you nuts and it just give you what it all adds up to them.
Thank you.
Question.
Our next question comes from Arlanda with loop capital.
Yeah, Hey, guys. Good afternoon, I really appreciate you guys taking the questions.
I guess, two if I could.
Got it and maybe this has become more of a housekeeping question, but when I do like asking it.
Last year.
The remarks, you had made about opportunity to harmonize portfolios across across the areas of the geographies can you can you talk can you sort of talk to where you guys are in that is there anything left to do and what the impact is dead and is there a future impact ticket.
From that and I have a quick follow up as well.
Yeah.
I think we're in a very good place when it comes to harmonize portfolios across around the world really and obviously that helps in terms of cost reductions quarter by quarter, a simpler is always better but we're in a pretty good place.
And if anything our China for China program, which is working very well.
Does add a little bit of extra.
Skus in our lineup, because we're adding China for China innovation.
But what E. I also expect we will start seeing it that some of that China for China innovation actually becomes global innovation again going forward, so that will be a really good dynamic.
Thanks for that and then the follow up is are you.
You had mentioned.
Is there a price negotiations inventory gets a little skinny on the shelves.
So that can impact sales and then you also may later on I'll remark about you expect is that while it's not atypical to loosen sure asset prices increase are those two to sort of share pressuring dynamics distinct share pressuring dynamics.
Yeah, you got that exactly right. So we're through the first phase or the inventory got a little skinny or through that because our customers have accepted the price increase their ordering or back to the inventory then we actually did see that earlier in the second quarter, we had a good Amazon Prime so that would tell me.
That things are back in order in terms of inventory.
But again the effect of the actually higher consumer price that is yet to be seen and again, usually in the short term that could have an effect.
<unk> sales and share.
Keith.
Thanks, a lot.
Okay. Our next question comes from yarn with UBS Your line.
Thank you Hello, everybody. Thanks for taking my questions two to three please if I may start with the first one.
And just a dollar check you are a few negotiations in North America about restarting a M T.
And this was impacting the flatter first rule.
Yeah, I wouldn't say empty shelves, but there were certainly skews that went out of stock on the.
Real and virtual shelves.
So it wasn't like there was no logitech at all but there were certain big Skus that were out could.
Could you just maybe this doesn't meaningfully impact on your business in North America and therefore.
Yeah.
I'm on.
But it had some impact.
In the last month of the quarter, So and again, we don't have those shares yet so it's I can't really tell through Meda didn't have an impact the shares in North America were very strong and I think in early July where we're recovering from that impact now again, the second impact of the actually higher prices remains to be seen.
So, but all of this is normal.
Increased prices. It just you know you don't know overnight what will happen and you will have some noise in the actual negotiations.
This one and the second question is on gaming if I remember correctly last quarter also offer growing low single digits.
It seems that now it's again in brackets only growing low single digits. It should be a key structural growth driver is there anything going on in stimulation device. If I had said, which is cyclical and we should be aware off and how do you think the growth rate and then am I know for you and gaming.
Yeah.
So again I think gaming was probably most affected by the noise in the price negotiations as as you know, it's our most competitive category and in the U S. So it did suffer a little more than PWM from the out of stocks. So I.
I think we will see a good recovery in gaming in the quarters ahead of demand was up 6% in the quarter for gaming so.
It was pretty good.
I'll finish off Traffics, presenting gaming and is correct yeah. Okay.
Okay.
Thank you for the last question if you allow me on.
On the tariff and you say two to 300 basis points Cross tariff impact if my calculations are totally wrong, it's an average tariff of her own 15% plus.
Plus or minus Youre paying currently if that's roughly correct. So verify example of if anything happening with China growing to 55% in this part of the overall, Taiwan, Malaysia. After pay 30% that is two five basis points is increasingly likely in the back half of year.
I think the the amount for the first quarter was a little lower than that but as you know.
In Europe <unk> in the first quarter, we benefited four of the inventory that we were able to pull them back to the prior question that mitigate any impact. So I think your math is relatively close.
As far as the.
We only today, we were just talking about the outlook.
For the for the second quarter right. So.
At this point based on the <unk>.
Inventory that we have and we think.
Based on the demand that we see for the quarter and as inventory flushing through the system.
Whatever is going to happen in the next month to month and a half should be.
Relatively limited the impact for the second quarter and embedded in the in the range of the 200 to 300 basis points that.
We provided today and then we'll have to see what happens for the future and that's why we just to Anika point earlier will start by the second quarter and we'll update you moving forward.
But thank you Samantha center your culture, but roughly 15% that you mentioned moving forward. So excluding the first quarter is actually a.
Close to my calculations.
Rose.
Alright, thanks for the color thanks very much.
Okay. Our final question comes from my end Newman with Morgan Stanley.
Awesome. Thank you so much.
Hanukkah and maybe if you can help us better understand the timing to really share 7% to 10% top line growth target disclosed in March and there were some tam expansionary initiatives in there, but I assume it takes some time, but at the same time, we're already seeing success in education.
How long do you think until we get to that high single digit top line growth target.
Yeah, Great question. So as you know last fiscal we were actually at plus seven so.
We can already be pretty close.
Clearly a lot of uncertainty a lot of challenges in the markets in the past quarter. After liberation day, but again, we're pleased with even now the topline that we're seeing in the demand that we're seeing in the markets in terms of that and a large tam that's going to take time and education was the first vertical.
That we address we've been in that for a few years now.
And so we continue to see good growth there that's very encouraging the other two health care and government were really just starting and we're starting almost from scratch. So before that has a material impact and it will take a little longer.
But all that said I would say, even our core categories. Again, we showed last fiscal that we can get to high single digits or pretty close to it so.
So don't have a crystal ball, but it's going to happen.
Understood and then maybe kind of going back to an earlier question that if we think about the midpoint of guidance. It's fair one way you can help us understand how much the pricing increases in the U S are estimated to contribute terrorists September quarter topline growth.
We said that we are expecting the up.
The impact of price to be 200 basis points.
The gross margin level.
And Thats, what we are counting on our on our financials that we will see what happens at the end of the quarter.
Based on some of the uncertainties at the atomic I just talked about yeah.
I could add in the first quarter most of that 5% net sales growth. The vast majority was from volume actually.
So you know again pricing could be an additional benefit over time, but.
We got to see it always needs a little bit of time to play out in the market.
Awesome. Thank you so much.
<unk>.
At this time there are no further questions.
Okay.
Thanks, everybody I think we're ready to wrap up absolutely. Thank you so much for joining us today and for sticking with US at this late hour in Switzerland.
Yeah, just to summarize our team had a great start to the fiscal <unk>.
Looking ahead.
I am excited actually about the opportunity that's before us. So we're going to continue to play offense on continuing to manage costs and we're going to continue to be super agile and I look forward to speaking with you next quarter to take care of around Goodnight.