VTech Holdings Limited reported a 5.6% rise in first-half revenue but a 12.9% drop in shareholder profit, as higher cost of sales and a higher effective tax rate contributed to the decline.
Unaudited results for the six months ended Sept. 30, 2026, showed revenue of $1,046.9 million, compared with $991.1 million a year earlier. Profit attributable to shareholders was $65.1 million, down from $74.7 million, and basic earnings per share decreased to 25.7 U.S. cents from 29.5 cents. VTech said higher costs and an increased effective tax rate both contributed to the profit decline.
Europe revenue advanced 15.4% to $495.1 million, while Asia Pacific sales rose 9.9% to $165.3 million. North America revenue fell 6.1% to $374.1 million, and Other Regions declined 7.5% to $12.4 million. Growth in Europe and Asia Pacific more than offset the two regional declines.
Orders from clients rebuilding inventories supported VTech’s contract-manufacturing business. The company said electronic learning products improved as U.S. tariff policy steadied and new products recorded what it described as “good sell-through.” Lower telecommunications sales partly offset those gains.
Gross profit edged down $0.6 million to $315.2 million. Gross margin contracted to 30.1% from 31.9%, and operating profit fell 11.2% to $82.5 million. VTech cited higher materials, labor, manufacturing overhead and freight expenses. It also pointed to the continuing Middle East conflict as a factor in higher oil and commodity prices, which raised costs for plastics, other components and shipping. Strong AI-industry demand and component shortages pushed up component prices, while Renminbi appreciation increased labor and overhead costs. Lower U.S. tariffs offered some relief.
The prior-year comparison included a disruption to U.S. shipments. VTech’s filing says tariff increases on Chinese imports led it to stop deliveries to the United States for several weeks, while some retailers postponed autumn store setups.
For fiscal 2027, VTech expects revenue to grow, but said its gross margin is likely to be lower than a year earlier if materials and freight costs remain high. The company maintained its interim dividend at 17.0 U.S. cents per ordinary share, payable Dec. 18, 2026, to shareholders on the register at the close of business Dec. 9. Its financial calendar lists the fiscal 2027 annual-results announcement for May 2027.
