The Mattel company specifically named “evolving” U.S. Tariffs as a reason it is raising prices on some of its products.
The California-based toymaker that creates Barbie dolls announced it will be taking steps to prepare for losses it sees coming amid “reducing reliance” on products sourced from China.
“The company is operating in an uncertain macro-economic environment with significant volatility, including changes in global trade policy and U.S. tariffs,” read Mattel’s first-quarter report.
“Given the volatile macro-economic environment and evolving U.S. tariff landscape, it is difficult to predict consumer spending and Mattel’s U.S. sales in the remainder of the year and holiday season,” the report read.
Mattel CEO Ynon Kreiz echoed the words in an interview with Yahoo! Finance. adding that the company is “confident about the mitigating actions we are taking which are designed to fully offset the incremental cost impact of tariffs.”
“Although tariffs did not affect Mattel’s first quarter financial results, the company is taking mitigating actions designed to fully offset the potential incremental cost impact of tariffs on future performance,” the company report continued.
One of the actions Mattel outlined to meet the tariff impacts would be, “Where necessary, taking pricing action in its U.S. business.” It will also be “accelerating diversification” of its supply chain.
About 20% of Mattel’s goods sold in the U.S. are from China, and Barbie dolls and Hot Wheels toys are imported from Indonesia, Malaysia and Thailand, according to Reuters. The company expects roughly $270 million in cumulative costs from the tariffs, according to Chief Financial Officer Anthony DiSilvestro.
“Look, there’s no question that tariffs are creating a real disruption in the industry, and as you said, 80% of toy production globally is from China, and many companies are very exposed,” Kreiz told Yahoo Finance Executive Editor Brian Sozzi.
“Some companies make 100% of their production in China. So, companies have stopped production and shipping to the U.S. as a result of tariffs on China. We do support the Toy Association advocacy for zero tariffs on toys to ensure that safe and affordable product remains accessible for everyone, given that toys are such an essential part of children’s lives,” he said but added that for Mattel, “it is a very different situation, given our scale, brand portfolio and diversified and flexible supply chain, and that we index at less than half of industry average of product coming from China.”
“In terms of U.S. imports, less than 20% of our global production comes from China, and we plan to reduce that below 15% in 2026 and below 10% by 2027 with additional contingency plans to accelerate that if required,” the CEO added. “So, we don’t, so we expect not only to manage through this volatile period, but to strengthen our competitive position and our standing as a trusted partner for retailers and consumers.”
