MATTEL could soon increase the cost of its most popular toys as it considers a new plan in the coming years.
Consumers would pay more for favorites like Barbie, Hot Wheels, and Fisher-Price items.
The potential move from the toymaker comes as it considers how to manage President Donald Trump’s tariffs on imported items from Canada, China, and Mexico, per Fox Business.
President Trump recently signed executive orders to impose a 10% levy on all imports from China and a 25% tariff on imports from Canada and Mexico.
While the president paused the orders for Canada and Mexico for one month after the two countries decided to counter with additional enforcement on the US, China’s tariff went into effect on February 4, per CBS News.
Mattel is focusing on its supply chain operations and even considering upping prices for popular toys to compensate.
CFO Anthony DiSilvestro said executives were working to figure out the best path forward during a recent earnings call.
“Our teams have been fully engaged in analyzing and planning for a range of scenarios,” DiSilvestro said.
“And in terms of the financial impact on Mattel, our 2025 guidance includes the anticipated impact of the new tariff based on what we know today and mitigating actions we plan to take, including those leveraging the strength of our supply chain and potential pricing.”
Mattel currently manufactures toys in at least seven countries, and around half of its global toy sales are in the United States.
MANUFACTURING ADJUSTMENT
Amid the tariffs, DiSilvestro said under 40% of its global toy production will occur in China in 2025.
The CFO said that’s considerably less than the toy industry average, typically around 80%.
Mattel also does not source from Canada, and about 10% are from Mexico.
Additionally, starting in 2027, Mattel will initiate plans where “no single country” will have more than 25% of production.
DiSilvestro also noted that the price increases weren’t confirmed and that Mattel will continue to “work closely” with retailers before a final decision.
The company wants to “achieve the right balance and always keep consumers in mind when we consider pricing actions,” per the CFO.
Why has Trump hit China with tariffs?
DONALD Trump signed an executive order promising to hit Chinese imports to the US with a tariff of 10%. But, why did he propose the levies?
Trump believes China has not done enough to stop the production of chemicals used to make the drug fentanyl.
China has slammed Trump for the claim and described fentanyl as America’s problem.
The country also said the tariffs are a “serious violation” of the World Trade Organization rules.
China is therefore filing a lawsuit with the WTO against the US for “wrongful practice”.
China serves as a major supplier of auto parts to the US.
Phones and computers along with other key electronic devices were also in the top imports from China last year, according to Commerce Department Data.
In 2023, the US imported around $427 billion worth of products from China in total, according to the US Census Bureau.
Data reveals that 78% of all smartphones imported from the US came from China.
Trump’s tariff threat has sparked fears of price rises for fashion items and toys.
Beijing has responded by outlining its own tariffs on American goods, sparking fears of an all-out trade war between the two powerhouses.
SALES UP
CEO Ynon Kreiz noted on the earnings call that 500,000 retailers sell a variety of Mattel products in 2025.
It of course, also uses e-commerce routes to generate sales.
Mattel expects to gain at least 2% to 3% net sales growth in 2025 and cited $5.38 billion in overall net sales throughout 2024.
Annual net income was about $541.8 million.
The company also isn’t alone in considering increased prices amid President Trump’s tariff decisions.
Walmart and Target shoppers could see a similar bump soon.
Beer, wine, and cellphone prices are also expected to spike.
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