Mattel Inc., the maker of Barbie dolls, Sizzling Wheels automobiles and different widespread toys, mentioned on Monday that it must increase costs for some merchandise offered within the US “the place essential” to offset greater prices associated to President Donald Trump’s tariffs.
The El Segundo, California-based firm mentioned the will increase are essential regardless that it’s dashing up its plans to diversify its manufacturing base away from China. Trump imposed a 145% tariff on most Chinese language-made merchandise.
Firm executives instructed analysts on a convention name that China at present accounts for 40% of Mattel’s world manufacturing. The corporate plans to maneuver roughly 500 merchandise this 12 months from producers in China to sources in different international locations, in comparison with 280 merchandise final 12 months.
For some extremely wanted toys, Mattel mentioned it will enlist factories in multiple nation. To forestall potential shortages, the corporate mentioned it was specializing in getting merchandise to shops with out interruptions.
The corporate mentioned that even with value will increase it expects 40% to 50% of its toys will value clients round $20 (€17.60) extra – or maybe below this quantity.
“The diversified and versatile provide chain in world business organizations are clear benefits to Mattel on this interval of uncertainty,” CEO and Chairman, Ynon Kreiz, instructed analysts.
Mattel takes again its steering outlook
Citing the continued uncertainty surrounding the president’s commerce insurance policies, nonetheless, Mattel withdrew its annual earnings forecast on Monday. The corporate mentioned it will be “tough to foretell” client spending and the corporate’s US gross sales for the rest of the 12 months with out extra info.
Mattel reported larger-than anticipated first-quarter gross sales but additionally a wider loss. Mattel mentioned gross sales rose 2% to $827 million (€728.9m) for the quarter that ended March 31.
The corporate’s loss expanded to $40.3m (€35.5m) within the quarter. That compares with a lack of $28.3m (€24.9m) within the corresponding quarter final 12 months.
Mattel’s share value was down lower than 1% in after markets buying and selling within the US.