President Donald Trump\u2019s tariffs are hitting toy giants Mattel and Hasbro as the critical holiday season nears. Still, both companies see a successful year end ahead.<\/p>\n
\u201cThis quarter, our U.S. business was again challenged by industry-wide shifts in retailer ordering patterns,\u201d CEO Ynon Kreiz said on Mattel\u2019s recent earnings call. \u201cThat said, consumer demand for our products grew in every region, including in the U.S.\u201d <\/p>\n
During the most recent quarter, which ended Sept. 30, Mattel said sales slipped 6% globally, led by a 12% decline in North America. International sales rose 3%. <\/p>\n
Some of the company\u2019s top performing categories included Hot Wheels and action figures, primarily from the \u201cJurassic World,\u201d Minecraft and WWE franchises. <\/p>\n
Other Mattel brands saw a drop in sales, however, including Barbie and Fisher-Price.<\/p>\n
With retail stores waiting until the last minute to assess the level of tariffs that would apply to their holiday orders, Kreiz said \u201csince the beginning of the fourth quarter, orders from retailers in the U.S. have accelerated significantly.\u201d<\/p>\n
Retailers \u201cexpect strong demand for the holiday and they are restocking,\u201d he added. <\/p>\n
Meanwhile, rival toy giant Hasbro\u2019s revenue jumped 8% in the quarter and it raised its financial guidance for the rest of the year. <\/p>\n
Key drivers of that included \u201cPeppa Pig\u201d and Marvel franchise toys, as well as the Wizards of the Coast games. <\/p>\n
Hasbro \u201cmanaged tariff volatility with agility\u201d and used price hikes to protect its margins, said Gina Goetter, the company\u2019s chief financial officer and chief operating officer.<\/p>\n
The company remains \u201cfirmly on track\u201d to achieve its financial targets.<\/p>\n
\u201cAs we calculate the various scenarios of where that absolute rates will play out, we\u2019re really putting all of our levers to work,\u201d she said on the company\u2019s recent earnings call. <\/p>\n
\u201cFrom how we think about pricing, how we\u2019re thinking about our product mix, how we\u2019re thinking about our supply chain, and how we\u2019re managing all of our operating expenses to mitigate and offset the impact\u201d of tariffs, she said.<\/p>\n
For its part, Hasbro also saw \u201csoftness\u201d in the U.S. during the quarter due to retail chains waiting longer to place holiday orders, but said momentum is accelerating as the season gets underway.<\/p>\n
In July, Mattel\u2019s chief financial officer, Paul Ruh, said that the company was raising prices because of tariffs. <\/p>\n
\u201cWe have implemented a variety of actions that will help us withstand some of those headwinds and those include \u2026 supply chain efficiencies and some pricing adjustments, particularly in the U.S.,\u201d Ruh said on the company\u2019s earnings conference call.<\/p>\n
\u201cSo with that array of actions, we\u2019re able to withstand some of the uncertainty that is mostly coming in the top line,\u201d Ruh said. \u201cOur goal is to keep prices as low as possible for our consumers.\u201d<\/p>\n
Still, Kreiz said that \u201cconsumers are buying our products and the toy industry is growing.\u201d<\/p>\n
He also said that consumers are taking price hikes in stride and those increases haven\u2019t hurt demand: \u201cWe are not seeing any slowdown in consumer demand so far.\u201d<\/p>\n
Hasbro CEO Chris Cocks said the company has also raised some prices, but it was \u201cpretty surgical\u201d in what it chose to adjust.<\/p>\n
\u201cIn terms of ongoing pricing, I think we just kind of have to see how the holiday goes and the consumer holds up,\u201d he told analysts on the company\u2019s earnings call. <\/p>\n
Cocks also cautioned that there may be a two-tier economy forming, something other executives and economists have observed in recent months.<\/p>\n
\u201cRight now, I think it\u2019s really kind of a tale of two consumers. The top 20%, particularly in the U.S., continue to spend pretty robustly,\u201d he said. \u201cThe balance of households are watching their wallets a bit more.\u201d<\/p>\n
On Friday, the Labor Department released the latest consumer price index data, which showed that inflation is rising at a 3% annual pace, up from August\u2019s 2.9%.<\/p>\n
In May, Kreiz told CNBC that approximately half of the company\u2019s toys were sourced from China. <\/p>\n
Beijing has faced some of the steepest tariffs from Washington of any U.S. trade partner, as Trump has rolled out his disruptive trade agenda this year.<\/p>\n
Mattel\u2019s Ruh said the company continued to adjust its supply chains in response to shifting global tariff policies.<\/p>\n
\u201cWe will be continuing to work with our retailers to make sure that the product is on the shelf,\u201d he said.<\/p>\n
At the same time, Hasbro\u2019s Goetter said the company is diversifying its supply chains away from high-tariff countries.<\/p>\n
\u201cBy 2026, we expect approximately 30% of our total Hasbro toy and game revenue will be sourced from China and 30% of our revenue will be based in the U.S., as we opportunistically lean into our U.S. manufacturing capacity,\u201d she said. <\/p>\n<\/p>\n
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President Donald Trump\u2019s tariffs are hitting toy giants Mattel and Hasbro as the critical holiday season nears. Still, both companies see a successful year end ahead. \u201cThis quarter, our U.S. business was again challenged by industry-wide shifts in retailer ordering patterns,\u201d CEO Ynon Kreiz said on Mattel\u2019s recent earnings call. \u201cThat said, consumer demand for…<\/p>\n","protected":false},"author":1,"featured_media":4389,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[2],"tags":[],"class_list":["post-4388","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-business"],"_links":{"self":[{"href":"https:\/\/thetradingdictionary.com\/index.php\/wp-json\/wp\/v2\/posts\/4388","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/thetradingdictionary.com\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/thetradingdictionary.com\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/thetradingdictionary.com\/index.php\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/thetradingdictionary.com\/index.php\/wp-json\/wp\/v2\/comments?post=4388"}],"version-history":[{"count":0,"href":"https:\/\/thetradingdictionary.com\/index.php\/wp-json\/wp\/v2\/posts\/4388\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/thetradingdictionary.com\/index.php\/wp-json\/wp\/v2\/media\/4389"}],"wp:attachment":[{"href":"https:\/\/thetradingdictionary.com\/index.php\/wp-json\/wp\/v2\/media?parent=4388"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/thetradingdictionary.com\/index.php\/wp-json\/wp\/v2\/categories?post=4388"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/thetradingdictionary.com\/index.php\/wp-json\/wp\/v2\/tags?post=4388"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}