Mattel to Hike Toy Prices as Tariff Costs Take a Toll

Mattel Inc., known for its iconic Barbie dolls and Hot Wheels cars, announced on Monday that it will raise prices on certain U.S. products. This move aims to mitigate the impact of increased costs linked to tariffs imposed during the Trump administration.

Despite accelerating efforts to shift manufacturing away from China, the El Segundo, California-based company emphasized that price increases are unavoidable. Currently, China contributes to 40% of Mattel’s global production, which is set to decrease as the company plans to transition approximately 500 products to alternative manufacturing sites this year, compared to 280 last year.

In response to potential shortages, Mattel intends to diversify its production across multiple countries, ensuring a smooth supply chain. The company reassured consumers that, even amid rising prices, around 40% to 50% of its toys will remain priced at $20 or less.

“The diversified and flexible supply chain in global commercial organizations are clear advantages to Mattel in this period of uncertainty,” stated CEO Ynon Kreiz during a conference call with analysts.

However, the ongoing unpredictability surrounding U.S. trade policies led Mattel to withdraw its annual earnings forecast. It acknowledged the difficulty in projecting consumer spending and U.S. sales for the remainder of the year without further clarity.

Mattel’s first-quarter results reflected mixed outcomes; sales rose 2% to $827 million, but the loss widened to $40.3 million, or 12 cents per share, compared to a loss of $28.3 million, or 8 cents per share, from the previous year. Analysts had anticipated a smaller loss with lower sales figures.

In after-hours trading, Mattel’s shares experienced a slight decline of less than 1%.