Mattel CEO on Trump tariffs: We'll raise prices and shift where we produce
SANTA MONICA, Calif. — Making toys isn't so fun right now.
Barbie and Hot Wheels maker Mattel pulled its full-year profit outlook late Monday, citing uncertainty surrounding the Trump administration's trade war.
"The mitigating actions that we're taking are designed to fully offset the cost impact. And this includes accelerating diversification of our supply chain and further reducing reliance on China-sourced product, optimizing product sourcing and product mix, and, where necessary, taking pricing actions," Mattel chairman and CEO Ynon Kreiz told Yahoo Finance on Tuesday (video above).
Kreiz said the tariff impact will hit its costs by $270 million this year, without any offsets such as price hikes.
Mattel and the wider toy industry are caught in the crosshairs of Trump's trade war and 145% tariffs on China.
Read more: The latest news and updates on Trump's tariffs
About 80% of all toys sold in the US are made in China. Mattel's primary vendors that make its toys are located in China, Indonesia, Malaysia, Mexico, and Thailand.
In an effort to cushion a financial deathblow, toymakers are getting crafty, though a sting is still expected to be felt.
A new survey from the Toy Association found that 81% of small toy companies are delaying orders, and roughly 64% are outright canceling orders.
For its part, Mattel said it will aim to raise prices in the US and move production out of China to other international regions with lower tariffs.
The company currently relies on China to produce less than 40% of its toys.
Analysts stayed cautious on the stock despite a solid top line in the first quarter and what Kreiz said has been a "strong" start to the second quarter.
"We continue to like Mattel's product and license release line-up for the year but note that its direct and indirect exposure to tariffs is material. Given this dynamic, we view Mattel's current setup as high-risk but with the potential for high returns if the US consumer remains stable," Jefferies analyst Kylie Cohu said in a note.
Mattel stock rose slightly in early trading on Tuesday.
Earnings analysis
Net sales: +2% year over year to $827 million vs. estimates for $791.5 million
Adjusted EPS: Loss of $0.03 (vs. a loss of $0.05 last year) vs. estimates for a loss of $0.10
What else caught our attention: Guidance pulled
Full-year adjusted EPS: Guidance "paused" due to tariff uncertainty (previous guidance: $1.66-$1.72)
Read more about what business leaders and top political figures are saying at the 2025 Milken Institute Global Conference:
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