HP Stockpiles Products Amid Tariff Concerns
Davos, Switzerland - HP Inc. (HPQ) has joined a growing number of consumer companies stockpiling products ahead of potential tariffs from the Trump administration.
HPQ CEO Enrique Lores revealed that the company has increased inventory in recent months to mitigate the impact of tariffs. The move follows similar actions by Suntory Holdings, which has stockpiled whiskey in Europe.
Tariffs could significantly impact HPQ, which sells products in China and relies on the country for key components. Higher tariffs could lead to increased material costs and pressure on HPQ to raise consumer prices.
Industry estimates suggest that proposed tariffs could increase laptop and tablet prices by up to 46%, while smartphones could face a 26% price hike.
Amidst tariff uncertainty, HPQ has reported mixed results. Consumer PC sales declined while commercial sales improved. Operating margins in the PC division have declined.
Analysts note that HPQ faces challenges in passing through higher costs due to competitive pricing dynamics. However, commercial clients are upgrading computers ahead of Microsoft ending support for Windows 10 in 2025.
As tariffs remain a concern, HPQ's performance will be closely watched. Investors are also monitoring the company's artificial intelligence (AI) strategy and its ability to adapt to changing market conditions.