What Allegion plc told the SEC could break it.

Allegion's products consume steel, zinc, brass and other non-ferrous metals; it is exposed to commodity-price volatility (managed partly via fixed-price contracts, with no committed commodity derivatives at year-end 2025), and price increases could lower gross profit.

“We purchase a wide range of raw material, including steel, zinc, brass and other non-ferrous metals, and are exposed to volatility in the prices of these and other commodities used in our products. We use fixed price contracts to manage this exposure where appropriate. We do not have committed commodity derivative instruments in place at December 31, 2025. However, an increase in commodity prices could result in lower gross profit.”

Allegion sources ~20-25% of COGS from Mexico and <5% from China; 2025 US tariffs on several countries raised costs (offset by pricing actions), and the ultimate impact depends on tariff timing/magnitude and retaliatory actions outside its control.

“Throughout 2025, the U.S. government announced tariffs on imports from several countries from which we manufacture and/or import products and components. In 2025, we have offset inflation due to tariffs with pricing actions. We estimate we source approximately 20-25% of Cost of goods sold from Mexico and less than 5% of Cost of goods sold from China.”

Allegion relies on certain sole-supplier or sole-manufacturing arrangements, and some key parts/components are available only from a single supplier or limited group; lack of guaranteed supply exposes it to supply interruption and pricing risk that could hurt margins, operations and cash flows.

“Additionally, because not all of our supply arrangements provide for guaranteed supply and some key parts and components may be available only from a single supplier or a limited group of suppliers, we are also subject to supply and pricing risks, which could negatively impact our margin performance, results of operations, inventory levels and cash flows.”