Prepared remarks
Good afternoon, and good evening. Welcome to Logitech's video call to discuss our financial results for the first quarter of our fiscal year 2026. Joining us today are Hanneke Faber, our CEO; and Matteo Anversa, our CFO. During this call, we will make forward-looking statements, including with respect to future operating results under the safe harbor of the Private Securities Litigation Reform Act of 1995. We're making these statements based on our views only as of today. Our actual results could differ materially, and we undertake no obligation to update or revise any of these statements. We will also discuss non-GAAP financial results, and you can find a reconciliation between GAAP and non-GAAP results and information about our use of non-GAAP measures and factors that could impact our financial results and forward-looking statements in our press release and in our filings with the SEC. These materials, as well as the shareholder letter and a webcast of this call, are all available at the Investor Relations page of our website. We encourage you to review these materials carefully. Unless noted otherwise, references to net sales growth are in constant currency and comparisons between periods or year-over-year. This call is being recorded and will be available for a replay on our website. I will now turn the call over to Hanneke. Hanneke?
Thanks, Nate, and welcome, everyone. The first quarter of fiscal year 2026 was an encouraging start to the year for Logitech. Amidst plenty of uncertainty, our team delivered good top-line growth and improved profitability, demonstrating Logitech's resilience in a challenging environment. During the quarter, we continued to focus on our long-term strategies and overlaid three principles. First, we played offense. We continue to invest in research and development, which represented 6% of sales this quarter. That investment underscores our long-term commitment to superior products and innovation. We also continue to focus on driving growth. Net sales grew 5%, and we grew net sales in all key categories. Demand also grew mid-single digits, closely marrying net sales and ensuring a healthy channel inventory position. Second, we exercised disciplined cost controls. We reduced operating expenses by 2% year-over-year, including an 8% reduction in general and administrative expenses. As a result, the quarter's OpEx as a percent of sales was down 200 basis points versus last year. And despite tariffs, we delivered a solid gross margin of 42.1% in the quarter, driven by our ability to mitigate the tariff impact through product cost reductions, manufacturing diversification as well as pricing. As we move forward, rigorous cost discipline is going to remain a cornerstone of our plans. Third, agility. We are moving fast. As we previously shared, we expect to reduce the share of U.S. products originating from China from 40% in April to just 10% by the end of this calendar year, and we are well on track to do so. These three guiding principles, playing offense, cost discipline, and agility drove our success in Q1. But just as importantly, so did our long-term strategic priorities. Superior products and innovation are always at the heart of our strategy. This quarter, we launched nine new products. We introduced the G522 Wireless Gaming Headset, a sleek, comfortable gaming headset designed for full immersion in the game. We launched a Flip Folio for iPad, a really stylish magnetic keyboard case for on-the-go users. We introduced a Slim Wired Combo for business with customizable AI launch keys. And we announced the Logitech Muse for the Apple Vision Pro, a groundbreaking digital pencil designed to support collaboration in virtual reality. In recognition of all of our team's innovative design and engineering work, Logitech was named one of Fortune's most innovative European companies for 2025 in the quarter. Doubling down on B2B is another important strategic pillar. Logitech for business demand outpaced our consumer business demand this quarter, led by double-digit net sales growth in video conferencing. Logitech 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 the 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, inflation, and customer sentiment. But Logitech has proven time and time again that we are uniquely built to thrive in times like these. Our business is 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 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. Matteo, with that, I'll turn it over to you.
All right. Thank you, Hanneke, and thank you all for joining us on the call today. I want to, first of all, extend my gratitude to our teams around the globe for the strong execution during the quarter. Our teams demonstrated they can operate under challenging market conditions, operating with agility while making solid progress towards our overall goals. And as you have seen from the financials that we published earlier today, we began fiscal year '26 with strong execution and focus. Net sales were up 5% year-over-year in constant currency, supported by continued robust demand across both the consumer and B2B. Despite significant external headwinds, we increased our profitability and generated strong operating cash flow. And as expected, this fiscal year started with sell-in 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 delivered 13% year-over-year growth, driven by strong North American demand. Personal Workspace grew 6% year-over-year, fueled by double-digit growth in webcams 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 product 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 an approximately 100 basis points negative impact from the U.S. tariffs. And in 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, 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 million and $200 million. We are expecting the negative impact of tariffs in the second quarter to be between 200 and 300 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.
Questions and answers
Thank you, Matteo. Our first question comes from Didier with Bank of America. Didier?
I would like to know your thoughts on how consumers reacted to your pricing changes. Clearly, there was a positive impact, and you may have provided the numbers for the current quarter. Can you remind us of the pricing benefit this quarter compared to volumes? Additionally, what is your perspective on consumer reaction? Were you positively surprised by the volumes following the price increases you've implemented this quarter? Is this encouraging you to consider raising prices further to offset the tariff impact?
Yes, thanks, Didier. Good to see you. The positive effect of pricing in the first quarter was 50 basis points, as we announced a price increase only in mid-April. It typically takes about 4 to 8 weeks to fully implement these changes across the trade. It's too soon to evaluate the impact on the consumer, since the new prices didn't reach the shelves in the U.S. until the end of the quarter. What we do know is that the negotiations with our customers took 4 to 8 weeks for full implementation, which affected in-stock levels and shelf availability during that period, as expected. This temporarily influenced the net sales reflected in our Americas net sales figure. However, implementation is now nearly complete, in-stock levels have rebounded, and we are well positioned for back-to-school and holiday seasons.
Super. I have a quick follow-up regarding the Video Collaboration business, which is showing further strength. Can you elaborate on that? How confident are you that this trend will be sustainable in the later part of this year?
Yes. So obviously, very pleased with 13% growth in VC. 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 wouldn't repeat. And the EU was a little low on inventory at the end of Q4. So they had to bring in a little more inside the first quarter. But at the end, the weeks on hand are still at a very healthy normal operating range. So it might have been slightly inflated, but still, a double-digit growth number is a really good number for VC showing the underlying strength of that business.
Okay. Our next question comes from Tim Long with Barclays. Tim?
Yes, if I might. First, it seems like B2B performed quite well this quarter. Could you elaborate on that, especially regarding Video Collaboration and any other factors at play? Also, could you update us on the economic impact of increasing the B2B segment? Secondly, regarding gaming, it appears to be a strong quarter with some new products. Can you discuss the sustainability of the growth you're observing in the gaming sector?
Yes, I'll let Matteo discuss Logitech for business and its economic impact. We had another strong quarter for Logitech for business, with demand in that area exceeding consumer demand. This is evident across our entire Logitech for business portfolio, which includes PWS, video conferencing, and headsets. This success comes even after a 10% price increase that affected both B2B and B2C. It's encouraging to see our capabilities in B2B strengthen, as we now have a global partner program in 135 countries, addressing an area where we needed improvement. Moreover, we continue to grow in new verticals, with Education experiencing another quarter of double-digit growth. All of this is positive news. Matteo, would you like to provide your insights?
Yes, Tim. Generally, video conferencing is actually positive for us in terms of mix. The margin on video conference is accretive to the average of the company. So it's a good product.
Yes. And then on gaming, yes. Also very excited about the strength of both the gaming market and our gaming business, and we saw a 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. We also had strong growth. You saw our APAC numbers. We don't break out China, but APAC was at plus 15%. China was significantly ahead of that. So that'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 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 SIM are real priorities for us. We extended our partnership with McLaren, and we launched a really exciting new headset, the G522. So lots of great things in gaming, and that's just a long-term really big bet for us.
Our next question comes from Lucas with Berenberg. Lucas? Okay. Skipping ahead. Our next question will come from Martin with BNP. Martin, please go ahead.
Yes. Could you discuss the demand pattern in Q1? Was there anything different compared to a typical Q1 due to the tariffs? Did you observe a significant increase in demand following the tariff announcement, followed by a decline toward the end of Q1 in the U.S.? That's the first question. The second question is about market share and competition. You are looking to take an offensive approach in the current environment. Can you share how you view your position relative to your peers in terms of your current production setup and pricing? Is there an opportunity for you to gain market share and potentially increase prices based on your superior production capabilities?
I will take the first question. We are very pleased with the demand in the first quarter, which was high single-digit for the company. Overall, it was broad-based, with both B2B and consumer segments showing significant growth. B2B actually outperformed consumer slightly, but it was very strong across the board. Additionally, there were notable improvements year-over-year in tablet accessories, which grew in double digits, while all other product lines were in the high single digits. Demand was impressive and widespread. Geographically, it was robust in Asia-Pacific and Europe, while North America remained relatively flat. Regarding Poland, as mentioned earlier, we have not observed issues on the consumer side. There was a slight pull-in at the beginning of the quarter in the B2B sector as customers adjusted their orders in anticipation of tariffs, similar to what we did with our suppliers. However, overall, the impact of this pull-in during the quarter was minimal. Demand remained good and broad-based.
Yes. Yes. 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., past three months, we saw share growth. So PWS, 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 were 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.
Okay. Our next question comes from Michael with Vontobel. Michael?
Can you hear me?
Yes, we can hear you.
Well done on the results. I have two questions. The first one is about your inventory strategy and how you plan to move forward this quarter regarding inventory acquisition, as well as its impact on net working capital and cash flow. The second question relates to the tablet accessory business, particularly as we enter the back-to-school quarter. How are you positioned, and what are your expectations for tablet accessories in your guidance this quarter?
Thank you. Let's discuss tablets briefly before we return to the inventory issue. Tablets are a crucial part of our business and strategically important. We are pleased with the 15% growth we experienced in the first quarter for a couple of reasons. Firstly, tablets cater to a rapidly expanding group of consumers—those who work on the go, which includes everyone here. Secondly, as you noted, they play a vital role in the Education sector. By providing our products to K-12 children, we establish a long-term relationship with those consumers. This makes tablets a key introductory product for Logitech. Additionally, we are happy with the impact of the Combo Touch launch just over a year ago; it represented a significant design-led innovation that also greatly enhanced our tablet margins. Therefore, our tablet business is much stronger now than it was 15 months ago. We anticipate another solid quarter since the back-to-school season is approaching, meaning we expect robust tablet sales in Q2 as students globally head back to school in Asia, the U.S., and Europe.
Michael Foeth addressed the question on inventory by referring back to the last earnings call, where the strategy to minimize the impact of tariffs was discussed. He highlighted the company's strong balance sheet and the decision to leverage it by bringing in inventory before the tariffs took effect. Sree and the operations team executed this plan successfully in the first quarter. As a result, the gross margin reported earlier was on the higher end of the expected range, attributed to the team's excellent performance. The company intends to continue operating under the same framework, as evidenced by the first quarter results, which showed a slightly higher inventory balance compared to last year. Despite this, they achieved $125 million in operating cash flow, maintained a cash balance of $1.5 billion, and closed the cash conversion days around 40, thanks to robust collections. The strategy remains unchanged, and they will continue to pull in inventory as much as possible to safeguard the company and its customers while utilizing their solid balance sheet.
Any chance you will accelerate your buyback given the balance sheet position was not very intensive in the first quarter, I think?
Yes, we've been quite steady with our share buybacks. Over the past few quarters, we've consistently repurchased between $120 million and $130 million in shares. There was a brief opportunity to buy more during the third quarter of the last fiscal year when the stock price experienced a dislocation. However, overall, we have reiterated our capital allocation priorities as we communicated on Investor Day, which includes a goal of a $2 billion buyback over the next three years, and we will adhere to the strategy we outlined in March.
Our next question comes from Asiya Merchant with Citi. Asiya?
Hopefully, you guys can hear me. Can I ask a little bit on the guidance for gross margins? If you can just peel 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 tariff impact, which obviously doesn't seem to be working through right now. So how should we think about the guidance relative to that?
Sure, Asiya. To answer your question, let's start with the first quarter we just closed and look at some key data points. Overall, we are very satisfied with the gross margin performance, which was on the higher end and aligns well with our outlook from three months ago. This is thanks to our cost reduction efforts and comments I previously made regarding inventory. If we break down the 120 basis points year-over-year decline, about 100 basis points were negatively impacted by tariffs, but this was offset by a 50 basis point positive price impact mentioned earlier. Therefore, the net impact of tariffs this quarter was negative 50 basis points, which was slightly better than we anticipated at the start of the quarter and overall was roughly in line with our expectations. Previously, we had anticipated a 100 basis points negative impact, so we’re in that range. Additionally, we faced about 50 basis points of pressure year-over-year due to inventory reserves released in the prior year that did not occur this time. This explains the 120 basis points of deterioration in gross margin for the first quarter when compared year-over-year. Moving to the second quarter of last year, we had a gross margin rate of 44%. It's important to note that last year in the second quarter, we had a significant release of inventory reserves that positively impacted gross margins by around 100 basis points, which we indicated would not happen again. Thus, the relevant comparison is closer to 43%. Looking ahead, we expect tariffs to negatively impact around 200 to 300 basis points, offset by a 200 basis point positive impact from pricing actions mentioned earlier. We also face roughly 100 basis points of year-over-year pressure on gross margin due to slightly increased promotions net of foreign exchange. This leads us to expect gross margins will fall within the 41% to 42% range. Overall, gross margin performance should be similar to what we experienced in the first quarter, with the net impact of tariffs, accounting for diversification and pricing, being between 0 to 100 basis points negative.
Okay. Great. As we look ahead, should we expect this trend to continue? Typically, you have some promotional expenses, so the latter half of your fiscal year often shows slightly lower margins compared to the first half. How should we view the gross margin outlook for the remainder of the year?
I believe the situation remains quite uncertain regarding the macroeconomic influence. We need to see what happens with consumers and price sensitivity, especially in the second quarter. Therefore, I think it's a bit early to comment on anything beyond the second quarter. I'll leave it at that.
Our next question comes from Samik with JPMorgan.
In the first quarter, you experienced mid-single-digit revenue growth, with sell-through also around mid-single-digit levels. For the second quarter, you're forecasting a growth range of 1% to 5%. How much of this projection incorporates the share changes due to pricing? I would anticipate that in the second quarter, you should see some benefits from pricing as you transition from the first quarter. I’m trying to get clarity on the factors influencing revenue, especially considering the pricing advantage. Additionally, regarding the pause you've noted in the Americas during the first quarter, how do you expect that to evolve in the second quarter? Will there be an inventory replenishment in that region during the second quarter?
Yes. It's a great question, Samik. So you've seen that we've guided for the quarter with a fairly broad top line 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, 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 bookings of that range.
And anything in terms of how you're thinking the Americas pause sort of plays out in terms of Q2? And then just for my follow-up, if you can just sort of clarify for tariffs as we go into Q3, are we largely assuming with the price offsets, you're neutral on the gross margin for tariffs?
For the first part of your question, when we look at the regions, we expect the Asia-Pacific performance, which was strong in the first quarter, to continue into the second quarter. Europe performed well in the first quarter with high single-digit growth, but we anticipate a slight slowdown due to the inventory situation mentioned earlier. Overall, we expect Europe to maintain strong performance. The real uncertainty lies in North America, as Hanneke explained. Regarding tariff expectations, that's a challenging question. For the second quarter, given the current tariff situation, we anticipate the impact to be between 0 to negative 100 basis points, including tariff costs, the effects of manufacturing diversification, and price increases. If the tariff environment remains unchanged, this expectation can serve as a reasonable estimate for the rest of the year, but we will have to monitor potential legislative changes. That's all we can share for now.
Absolutely. I mean, some people think everything has 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 5 is not entirely clear, so the tariff policy isn't entirely clear. The product classification, which leads 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 and our own strategic inventory decisions. So there are a lot of variables, which is why we don't break all of those out because we drive you nuts, and we just give you what it all adds up to.
Our next question comes from Ananda with Loop Capital.
I have two questions, Hanneke. This feels more like a housekeeping inquiry, but I appreciate the chance to ask. Last year, you mentioned the opportunity to streamline portfolios across different regions. Can you update us on your progress with that? Is there anything remaining to address? What impact has this had so far, and could there be future effects? I also have a quick follow-up.
Yes, I believe we are in a strong position regarding our harmonized portfolios globally. This approach contributes to cost reductions each quarter. Simplicity is preferable, and we are doing well in this aspect. Our China for China program is functioning effectively, although it introduces some additional SKUs as we incorporate innovations specifically for the Chinese market. However, I anticipate that some of these innovations will transition back into global offerings in the future, creating a positive dynamic.
You mentioned that during price negotiations, inventory can become quite limited on the shelves, which may affect sales. You also noted that it's not unusual to lose some market share after a price increase. Are these two factors related to market share pressure distinct from each other?
Yes, you got that exactly right. So we're through the first phase where the inventory got a little skinny. We're through that because customers have accepted the price increase, they're ordering, we're back to good inventories. And 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 on sales and share.
Okay. Our next question comes from Jörn with UBS. Jörn?
Two to three, please. If I may start with the first one. Just to double-check your ASP negotiations in North America, was this resulting in empty shelves and this was impacting the flattish sell-through? Or not really?
Yes. I wouldn't say empty shelves, but there were certainly SKUs 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.
Do you think this has a meaningful impact on your business in North America, and that is true?
It had some impact, probably in the last month of the quarter. We don't have those shares yet, so I can't really tell. Through May, there wasn't an impact. The shares in North America were very strong. I think that by early July, we will be recovering from that impact. The effect of the higher prices is still uncertain. All of this is typical when you increase prices; the outcomes aren't immediately clear, and there will be some fluctuations during negotiations.
And the second question is on gaming. If I remember correctly, last quarter, it was also growing low single digit or so sell-through. It seems that now it's again in brackets only growing low single digit. It should be your key structural growth driver. Is there anything going on in simulation devices or headset which is cyclical, we should be aware of? And how do you think the growth rate in the remainder of the year in gaming?
Yes. So again, I think gaming was probably most affected by the noise in the price negotiations. As you know, it's our most competitive category in the U.S. So it did suffer a little more than PWS from the out of stocks. So I think we'll see a good recovery in gaming in the quarters ahead.
And demand was up 6% in the quarter for gaming. So it was pretty good.
Yes.
Okay. Okay. And the last question, if you allow me. On the tariffs, when you say 200 to 300 basis points gross tariff impact. If my calculations are totally wrong, it's an average tariff of around 15%, plus/minus, you are paying currently. Is this roughly correct? So when, for example, there's anything happening with China going to 55%. When this passes over Taiwan, Malaysia has to pay 30% that this 270 basis points is increasing likely in the back half of the year?
I believe the figure for the first quarter was slightly lower than expected. However, as you know, we benefited from the inventory we managed to pull in, which helped reduce the impact. Your calculations seem fairly accurate. Regarding the outlook for the second quarter, we are only discussing it today based on the inventory we have and the demand we anticipate during this quarter as the inventory moves through the system. Any developments over the next month to month and a half should have a limited effect on the second quarter, which is reflected in the range of 200 to 300 basis points that we provided. We'll have to see how things unfold in the future. That's why, as mentioned earlier, we will focus on the second quarter and update you as we progress. The approximately 15% you calculated for the future, excluding the first quarter, is indeed close to my own calculations; you're on the right track.
Okay. Our final question comes from Maya Neuman with Morgan Stanley. Maya?
Awesome. Hanneke, maybe if you can help us better understand the timing to reach your 7% to 10% top line growth target disclosed in March? I know there were some TAM expansionary initiatives in there that I assume takes some time. But at the same time, you're already seeing success in Education. So how long do you think until we get to that high single-digit top line growth target?
Yes, that's a great question. Last fiscal year, we achieved a growth rate of around 7%. Currently, we are close to that level. There has been considerable uncertainty and challenges in the markets following Liberation Day, but we are encouraged by the current demand and the revenue we're generating. Regarding the expanded total addressable market, that will require time to fully realize. Education was our first focus, and we've seen good growth there over the past few years, which is promising. We're just beginning to explore healthcare and government sectors, so it will take longer for those areas to have a significant impact. However, our core categories have demonstrated that we can reach high single-digit growth or get very close to it. While I can't predict the exact timing, I believe it will occur.
Understood. And then maybe kind of going back to an earlier question. If we think about the midpoint of guidance, is there a way you can help us understand how much the pricing increases in the U.S. are estimated to contribute to September quarter top line growth?
Maya, we said that we are expecting the impact of price to be 200 basis points at the gross margin level. And that's what we are counting on, on our financials, then we'll see what happens at the end of the quarter based on some of the uncertainties that Hanneke just talked about.
Yes. I could add, in the first quarter, most of that 5% net sales growth, the vast majority was from volume actually. So 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.
At this time, there are no further questions.
Absolutely. Thank you so much for joining us today and for sticking with us at this late hour in Switzerland. Just to summarize, our teams had a great start to fiscal. Looking ahead, I'm excited actually about the opportunity that's before us. So we're going to continue to play offense. We'll continue to manage costs, and we're going to continue to be super agile. And I look forward to speaking with you next quarter. So take care, everyone. Good night.