Decision to Forego Tariff Price Hikes to Cost iRobot $5 Million in Q4 Gross Margins

IRobot’s decision not to pass along to retailers or consumers the higher costs of the 10 percent Trade Act Section 301 tariffs that took effect Sept. 24 on all vacuum cleaners manufactured in China will cost the company about $5 million in Q4 gross margin, said CEO Colin Angle on a Wednesday earnings call. The company is discussing “a lot of different scenarios about how to tackle” the 25 percent tariffs that take effect Jan. 1, said Angle. Many of those scenarios “assume some level” of pass-along price increases, “but we haven’t exactly settled on the final answer yet there,” he said. With the market experiencing “continuing strong growth,” iRobot has “some ability to absorb an impact without putting us in a dangerous situation,” he said.