Mattel, the toy giant behind iconic brands like Barbie and Hot Wheels, announced on Monday that it will be raising prices on some of its U.S. products to counter the impact of President Trump's tariffs on Chinese goods.
The company cited rising costs associated with Trump’s tariffs as the primary driver behind the price hikes.
This move comes despite Mattel accelerating its efforts to shift production away from China.
Currently, 40% of Mattel's global production takes place in China, a figure the company is actively working to reduce. Executives revealed in a conference call with analysts that Mattel plans to relocate the manufacturing of approximately 500 products from China to other countries this year, a significant increase from the 280 products moved last year.
The Trump administration has imposed a 145% tariff on a wide range of Chinese-made goods, impacting businesses like Mattel that rely on Chinese manufacturing.
For some highly sought after toys, Mattel said it would enlist factories in more than one country. To prevent possible shortages, the company said it was focusing on getting products to stores without interruptions.
The company said that even with price increases it expects 40% to 50% of its toys will cost customers $20 or less.
“The diversified and flexible supply chain in global commercial organizations are clear advantages to Mattel in this period of uncertainty,” CEO and Chairman Ynon Kreiz told analysts.
Citing the ongoing uncertainty surrounding the president’s trade policies, however, Mattel withdrew its annual earnings forecast on Monday. The company said it would be “difficult to predict” consumer spending and the company’s U.S. sales for the remainder of the year without more information.
Mattel reported larger-than expected first-quarter sales but also a wider loss. Mattel said sales rose 2% to $827 million for the quarter that ended March 31.
The company's loss expanded to $40.3 million, or 12 cents per share, in the quarter. That compares with a loss of $28.3 million, or 8 cents per share, in the year-ago period.
Analysts expected a loss of 10 cents on sales of $786.1 million for the first quarter, according to FactSet.
Mattel’s shares were down less than 1% in after markets trading.
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